Global Market Entry Strategies: Licensing, Investment, and Strategic Alliances based on mcdonlad company

GLOBAL MARKET ENTRY STRATEGIES : LICENSING , INVESTMENT , AND STRATEGIC ALLIANCES ON MCDONLAD

2007

Index

Contents Page

Executive Summary 3

Rational for Diversification 5

Merger And Acquisition Strategy 8

References 10 EXECUTIVE SUMMARY

McDonald 's organization 's mission becomes the cornerstone for its strategy and is necessary for the organization to assess the process identifying the objectives of each functional area . McDonalds emphasises on the accomplishment of the organisational objectives , which leads forward to it strategy

Fig 1 . Functional Area Objectives for Strategies Strategic Alternatives p

Strategic alternatives results into large number of alternatives through which an organization relates itself to the environment . Fig 2 summarises the success model of performance adopted On the study of environmental analysis , McDonalds chose four grand basic strategic alternatives to garner the market share

Expansion : This is adopted when environment demands increase in pace of activity . Company broadens its customer groups , customer functions and the technology . This kind of a strategy had a substantial impact on internal functioning of the organization

Modernization : Modern kitchen technology was used as the strategic tool to increase production and reduce costs in long run . Through modernization , the company aimed to gain competitive and strategic strength (Porter , M .E , Competitive Strategy : Techniques for analyzing industries and competitors

Integration : The company started producing new products and services of its own

by investing in restaurants across the U .S . Through forward integration it gained ownership

over distribution and retailers , thus moving towards customers

Fig : 3 Molecular Modelling Of Long Term Approach of McDonald 's Licensing : Licensing permits a company in the target country to use the property of the licensor . Such property usually is intangible , such as trademarks , patents , and production techniques . McDonalds (licensee pays a fee in exchange for the rights to use the intangible property and possible for technical assistance . Licensing has the potential to provide a very large ROI since this mode of foreign entry also does require additional investments . However , since the licensee produces and markets the product , potential returns from manufacturing and marketing activities may be lost . Licensing policies , quota restrictions , import duties , Forex regulations , restrictions on FDI flows , controls on distribution and pricing of commodities together made business difficult during earlier years . The McDonalds norms compare the performance of an organization in the same industry or sector against a set of agreed performance indicators . Data on industry norms are widely available and can be found from several published sources . Using such data and comparing an organization against others in its industry helps the organization understand its true position

Benchmarking compares an McDonalds performance against other 's performance wherever that is found . When the search for best practices is limited to competitors , the process is called competitive benchmarking

The five forces framework developed by Michael Porter is the most widely known tool for analyzing the licensing environment , which helps in explaining how forces in the competitive environment shape strategies and affect performance . The framework suggests that there are competitive forces other than direct rivals which shape up the competitive...