McDonalds Foreign Direct Investment and Distribution strategy Free Essay Example, 1000 words

In addition, McDonald’s also uses affiliates in one country to produce output for other territories. McDonald’s is also able to deter barriers to trade, for instance, quotas and tariffs imposed on companies that trade outside their trading blocs. In essence, McDonald’s success in overseas markets has been based on the firm’s capacity to transfer its capacity rapidly to conduct its entire business system to foreign entrepreneurs (Johnson & Turner, 2003). The organization’s superior knowledge, as well as managing fast food restaurants is transferable to its operations in countries outside the US. McDonald’s Distribution Strategy McDonald’s is arguably the biggest fast food chain, serving nearly 58 million people per day. McDonald’s restaurants, which operate either through franchises or affiliates, acquire revenue from royalties and fees from franchises, rent and sales in the company’s restaurants. McDonald’s focuses primarily on the sale of chicken products, breakfast items, hamburgers, soft drinks, desserts and hamburgers among others. The firm’s distribution strategy takes into consideration the theory of the marketing mix. The company has more than 30,000 restaurants that serve at least 58 million people every day in approximately 121 countries (Schaffer, Agusti & Earle, 2008). We will write a custom essay sample on McDonalds Foreign Direct Investment and Distribution strategy or any topic specifically for you Only $17.96 $11.86/pageorder now McDonald’s restaurants seek to be the originators in the market and establish the brand effectively by heavily promoting its brand, particularly through advertising. This effective distribution strategy helps McDonald’s to develop a strong market share within the fast food global market. McDonald’s has pre-defined the locations for most of its stores to help reach a diverse population (Johnson & Turner, 2003). McDonald’s has an intensive distribution process credited to the firm’s marketing department. McDonald teams up with other renowned brands such as Disney, Coca Cola and Pepsi to fortify its place in the market. McDonald’s sells its products in Disney theme parks and their movies. However, McDonald’s also ensures the price of its products is right, and the quality of its food is superior. McDonald’s delivery channel is ingenious since the firm recognizes the need to work cooperatively with the Disney Corporation and other globally acclaimed brands. McDonald’s in Saudi Arabia Undoubtedly, McDonald’s is the epitome of corporate success as a result of the company’s ability to appreciate and adapt to the market. For instance, when other fast food chains establish franchises in countries such as Russia and fail, McDonald’s delegates its people and succeeds, allowing the organization to own 80% of the Russian market (Hill, 2007).