Driving Factors of McDonald's to Compete in Various Countries

McDonald’s Case Study
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Introduction
McDonald’s is a multinational corporation that was incorporated in 1964 and operates fast-food restaurants. Today the company operates in 119 nations and attends to about 70 million consumers each day. A significant part of McDonald’s is its 163 outlets in Saudi Arabia, with the first opening in 1993. As a Muslim country, Saudi Arabia presents unconventional risks and uncertainty for western companies. However, through its localized strategy, negotiations with shareholders, and engagement in philanthropy work, the company has attained an edge in the country’s market. Despite this achievement, Saudi Arabia’s volatile economy and political problems deter the company from expanding further.
Specific strategies that help McDonald’s to get an edge in Saudi Arabia
Localization strategy
McDonald’s operations around the world are based on a localization strategy that enables the company to adapt to the needs of consumers and their culture. As an Islamic country, Saudi Arabia posses a significant and challenging risk to western companies. All employees must stop to work five times a day for prayers. This religious practice implies that customer usually stop coming in five times a day. Pork is also not allowed while women must be covered all the time when they are in public. However, through its localization strategy, McDonald’s restaurants in Saudi Arabia are closed five times a day yet the company still generates sufficient profits. Each restaurant in the country has two facilities; one for men and one for women. As a result, women can unveil and eat without being seen by men (Crawford, 2015).
Negotiating with shareholders
In Saudi Arabia, trade laws require foreign investors to partner with a local investor who can operate a business successfully. However, in the city of Mecca, the laws are even stickier because it is the birthplace of Muhammad and millions of people travel there yearly. As a result, a lot of businesses are restricted from operating in the area because of the fear of tarnishing the city. However, McDonald’s successfully negotiated with the Municipality of Mecca, which bought some shares in the company and allowed it to set up two restaurants in the city. The two restaurants in Mecca are very unique because they exclusively serve Muslim customers and they are also staffed with Muslims only (Bouznif et al. 2018).
Engagement in philanthropy work
Participation in philanthropy work allows an organization to contribute to various charity works while presenting itself as a socially responsible company. In Saudi Arabia, McDonald’s engages in various charity events by collaborating with other institutions. The company runs numerous training programs whose aim is to help children with Down syndrome to improve language proficiency and re-integrate in society. McDonald&rsqu...