Glocalization of McDonald’s – Angel or Devil?

McDonald’s continues to dominate.

 

From the Devad Vice Blog, McDonald’s Corporation scored a very high revenue for the first quater of 2012, and the company continues to operate at a higher earnings level than all other fast food restaurant chain in the world.

 

Mcdonald’s is the expert of localization, as long as glocalization. It can creat a regional menu for their international markets. It’s menu is very regional, you can find Kiwi burger in New Zealand, or you can grab a Chicken Maharaja-Macs from a McDonald in India.  The strategy of Mcdonald is to customise the menu and make it fits to every individual market, but in the mean time, the brand promise will be kept.

 

Someone argue that the glocalization of Mcdonald is a devil, it will slowly engulfing the local food diversity, that may lead to a invdation of American fast food culture. According to the Mcdonalds official website, there are more than 33,000 restaurants serving nearly 68 million people in more than 119 countries every day. This huge empire has penetrated the world, no matter where are you, you can alwasy find a Mcdonald in your city. The American fast food is getting more popular with the localized menu. People are worrying about the penetration of the American fast food will make the local food industry suffer, and the diversity of the local food will inevitable decrease.

 

Actually, glocalization will not decrease the diversity of the food culture of a place. Having a localized menu can actually creat a “mix-and-match” event. Adding the local food to the menu can help the people try their traditional food in a new way, they can have something that are very familiar but with American style. Glocalization can retain the local food culture, and make the menu more creative and diverse. 

 

McDonald’s Localization : Brand Unification or Menu Diversification ?

By studying the case of Mac Donald’s Strategy, one of the main problem the firm has to deal with, is its global identity.

In fact, McDonald’s aggressive localization strategy is opposed by some who feel that too much operation as local brand might create many challenges for the brand to maintain its global identity. Simon Anholt, a British author and founder of the Nations Brand Index, opined, “By putting local food on the menu all you are doing is removing the logic of the brand, because this is an American brand. If McDonald’s serves what you think is a poor imitation of your local cuisine, it’s going to be an insult.” He believes that McDonald’s should go the Coca-Cola way. Robert Goldin, executive vice-president at Technomic, a Chicago based food service, said, “McDonald’s may find it hard to match local’s expectations for domestic offerings. That’s not to say they shouldn’t try, but I think it’s a very difficult proposition.

In this blog, the author describes how Daniela Buglione discusses the evolution of a multinational towards a more “glocal” strategy: Even if McDonald’s takes risks and changes its brand image, it doesn’t mean that it damages it. While in the short term this strategy may prove effective in penetrating a foreign market, in reality it may be damaging on a longer time scale, almost cutting its roots as a fast-food company. We certainly cannot say at this moment in which the evolutionary process has just begun whether McDonald’s has truly “changed skin.” We can however say that even a multinational success like McDonald’s (which is seen as more than a product, rather a promoter of globalization) is becoming an example of the evolution of traditional multinationals into a ever-more “glocal” reality, finding in globalization and localization the factors that give it a strategic approach more suitable for a global market.

So even if some disagrees with McDonald’s strategy, this strategy seems to have been anythuing but profitable.

McDonald’s in China : Glocalisation in Management

McDonald’s, the multinational fast food restaurant shows us how far glocalisation can go with th eexample of Asian market.

In Thinkingbookworm blog, the author argues that Mc Donalds has to face a challenge of globalisation. Indeed, according to his figures, McDonald’s is the leading global foodservice in the world with 30,000 local restaurants in the world that serve more than 52 million people in more than 100 countries every day. Thus, McDonald’s is considered as one of the most important icon or symbol of globalization in the world.

Nevertheless, McDonald’s can be affected by globalization in different ways. The author introduces the book edited by James Watson, Golden Arches East: McDonald’s in East Asia, that inspect the cultural role of McDonald’s restaurants in five East Asian countries including China, Hong Kong, Japan, Taiwan and South Korea. The book discuss the ways in which the global corporate culture of McDonald’s changed the local methods of restaurant management, placing a decidedly American stress on the concepts of orderly queuing to order food and cleanliness of the bathroom.

Marc Valax, in his blog, has analysed the Corporate Social Responsibility (CSR) perspective within the fast-food industry in China, with particular attention to McDonald’s Corporation as a global icon. He relates also that this multinational firm has a local management. Indeed. Marc Valax underlines the fact that, in China, McDonald’s has  faced the challenge of improving the perception of the career opportunities it offers and made efforts to undo the negative reputation of low-paying jobs.

On the other hand, the author of hinkingbookworm blog also shows how the restaurant of McDonald’s have become localized in different manners. The types of food being offered on the menu changes in order to cater to the tastes of the local customers, employees consider their role in the workplace with more pride than the average American employees of the company, and the pricing of the menu items means that the cuisine of McDonald’s are for special occasions.

Moreover, Peter Pham, in in other blog, evokes the fact that while internally McDonald’s motto may have been effectively, ‘one world, one taste’ they have had to be more flexible to compete with fast food restaurants in China (YUM, KFC, Pizza hut) who have successfully tailored their menus to suit the tastes and sensitivities of local cultures.

Thus, throught differents blog and using the example of McDonald’s in China, we can understand glocalisation in a global vision that includes offers but also management abilities.

Requirements and benefits of glocalization : MacDonald’s example

Not every firm can achieve a glocalization strategy. There are some indispensable requirements that the firm must respect.

The first requirement deals with the brand image. This brand image must be the same at a global scale, in order to make consumers come despite the lack of authenticity at a local scale. Thus McDonald’s match perfectly this first requirement : when someone goes eating in a McDonald’s restaurant, he expects to eat typical American food made by a typical American restaurant, at least according to him (whereas McDonald’s food is actually adapted to his own national culture and thus is no genuine American food). Therefore, the two Chinese brands that tried to compete with McDonald’s by offering the same range of products, Ronghua Chicken and Xiangfei Roast Chicken, failed, because they didn’t have this image of being typical American food.

The second requirement deals with the attractiveness of the firm and the product. To set up a glocalization strategy, your firm and product must be global and attractive on the one hand worldwide, and on the other hand also in the targeted country. Even if you adapt your product to the countries, the local culture must not be hostile to this kind of product. That’s the reason why McDonald’s was successful, especially in Asian markets : worldwide, going to McDonald’s give the feeling to be modern and part of the globalized world. That is one of the reasons of the success of McDonald’s, especially in Asian markets.

By the way, let’s pay attention to the benefits of glocalization for McDonald’s.

The first one is quite funny. A McDonald’s consumer in his own country will be a McDonald’s consumer in a foreign country using the meal differences between the countries as an excuse, in order to taste it.

But actually, the most important benefit comes from the anchoring of the firm in the host country. By adapting the local culture, McDonald’s takes a important place in the cultural and food scene of the country. Therefore there can’t be any risk for McDonald’s to fail if it settled good in the targeted country. By having the feeling to eat genuine foreign food (what they were looking for), consumers actually eat what they are used to eating.

As a result, McDonald’s is present in every country in the world, what its competitors never succeeded in achieving.

Glocalization, a new concept

What does exactly mean Glocalization (Glocalisation) ?

Let’s see the different definition that we found on the Internet:

According to Wikipedia, Glocalisation is a portmanteau word of globalization and localization. By definition, the term “glocal” refers to the individual, group, division, unit, organization, and community which is willing and able to “think globally and act locally”.

If we look another definition found on Google Blog by typing “Glocalization definition”, we found out that Glocalization is the process of changing products or services that are sold all over the world to suit people in differentlocal markets.

Glocalization serves as a means of combining the idea of globalization with that of local considerations. Thus, initially developing an understanding of globalization offers a great deal of assistance in beginning to understand the function and meaning of glocalization. As explained by Philip Hong and In Han Song, globalization corresponds to the integration of local markets into world capitalism. Manifested by global changes in structures of the economy, globalization entails a restructuring of the world economy and a spatial reorganization of production and consumption processes across political states. Once an understanding of globalization has been established, it becomes possible to advance to a fuller understanding of glocalization.

Finally, in line with the economic roots of globalization to which the process is closely related, glocalization is an important expression used within the business world. Proceeding from its Japanese roots, the concept is now also a popular approach for Western businesses today.

This was a theoritical approach,  let’s see now concret examples of this new phenomenon …

McDonald’s Glocalisation – Burgers without Beef?

McDonald’s entered the Indian market in 1996, and nbow you can find McDonald’s in everywhere of India.

It’s seems nothing special right? But remember, Indian think the cow is holy, they are very big on the cow worship – and McDonald’s is a expert in Beef Burgers. And Muslims don’t eat pork as well sa they think pork is a dirty animal. So,  McDonald’s in India do not provdie beef and pork. The beef in McDonald’s burger is just like the weapon of a solider, they proud of their high quality of beef. How can Mcdonald’s provide a hamburger without beef and still can expand in India? What menu did they provide? 

Yes, they don’t provide beef and pork in the Indian menu, they have McAloo Tikki™(with  a patty made out of potatoes which is very popular filling food in India, peas, and spices.), McVeggie™(with peas, carrots, green beans, red bell pepper, potatoes, onions, rice, and seasoning.) and Chicken Maharaja Mac™(with 2 grilled chicken patties and is topped with onions, tomatoes, cheese and something similar to chipotle mayonnaise.) and many different burgers and rolls with chicken or vegetable.

McDonald’s strategy is to listen more to local consumers and then act on it. This business model is Glocalisation, McDonald’s takes its benefits of globalization and adapts to the local market tastes. 

GLOCALIZATION or how to “think globally and act locally.”

Last month, Starbucks had announced a multi-million pound investment to launch its newly-engineered ‘British Latte’, as UK coffee drinkers become more discerning.

Indeed, the Seattle-based chain spent a year engineering its milk-steaming process specifically for the UK launch, and will also put an extra shot of Fairtrade espresso in each drink for free.

Thus, Starbucks continues its international expansion while adapting its products to local tastes and finally, it still refines its strategy of “glocalization”.

In the service sector, glocalization is widespread. But, what about glocalization in industry sector ?

It could be very interesting to focus on this glocalization and on the way that firms promote product in differents countries while expanding in the worldwide.

Puma Development and events

Development

local Puma

Bicycle frames throughout the store. Red painted walls which have to resemble typical Amsterdam doors. All to make the Dutch consumer feel at home in the newest Puma store located in Amsterdam. Puma has adopted a way to make every consumer feel at home in their store. They have applied the same concept in cities such as Munich, London and Barcelona.

Interactive

Fun-elements to keep the customer entertained are for example a phone which rings randomly. A curious customer who picks it up will get information about: the brand ‘Puma’ and upcoming events. In the back of the store you will find ‘Dylan’, a big white stuffed puma (the logo of Puma). People like to take a picture of the puma says Nora Schreier (puma marketing).

Events

One of the events Puma sponsors is the Volvo Ocean Race. The Volvo Ocean Race is a sailing competition around that word that is held every three years. The duration of the race is approximately eight months. Currently ‘Team Puma’ is in fourth place. The race started at November 5th 2011

What about mission statement ?

Mission statement is paramount in a context of strong competion.

As a creative leader in the sport sector, PUMA endeavours to be the most desirable sport lifestyle brand. Its purpose is to mix sport, lifestyle and fashion.

Nevertheless, PUMA extends its mission and then, contributes each day to a better world for the future generation. For its vision, a better world would be safer, more peaceful and more creative than today.

Thus, every day, PUMA set out to stay true to its values, to innovate, to inspire passion, to be sustainable and most of all, to be FAIR, HONEST, POSITIVE and CREATIVE in everything they do.

More blogs about PUMA’s mission statement : http://puma-sportss.blogspot.de/ and http://www.lovepuma-shoes.com/

Strong competitors for a strong competition

Now, a post that deals with the intense rivalry among sport wear textile industry.

There are many mighty competitors in this branch. The main competitor is Nike. With a revenue reaching $19 billion in 2011, Nike is the leader of the market. This American Company created in 1972 suffers nevertheless from severe criticisms about child labor and tough working conditions for its employees in Asia.

The second largest rival is its German brother Adidas, founded by Puma’s creator’s brother in 1948. Unfortunately for Puma, Adidas strongly outperformed its fellow brother. Coming from the same area, Puma has difficulties to compete with the $12 billion firm.

To finish, the last main competitor is Reebok. The $5.4 billion weighted English company has however become since 2005 an Adidas subsidiary. Created in 1895, this is the elder Puma’s competitor.

For more information about these competitors : Nike, Adidas & Reebok.