Which of the following entry strategy is adopted by Mcdonald’s in International market ?

The correct answer is - Franchising

Key Points

• Franchising
  • McDonald’s utilizes franchising as its primary international market entry strategy. This approach allows the company to expand rapidly across different countries while minimizing risks and costs.
  • In franchising, McDonald’s grants rights to local businesses to operate under its brand name, following its operational procedures, and using its menu and recipes.
  • This strategy ensures consistent quality and brand identity worldwide while leveraging local expertise in market dynamics and customer preferences.
  • Franchising is highly effective for industries like fast food, where maintaining standardization and scalability is crucial.

Additional Information

• Other Market Entry Strategies
  • Licensing: In licensing, a company permits another firm to use its intellectual property, such as trademarks or patents, in exchange for royalties. McDonald’s does not primarily rely on licensing for its international expansion.
  • Strategic Alliance: A partnership between companies to achieve mutual benefits, such as sharing resources or knowledge. While McDonald’s may collaborate with suppliers and service providers, its main entry strategy is franchising.
  • Acquisition: Acquiring another company or its assets to enter a market. McDonald’s typically avoids acquisitions for market entry, focusing instead on its franchising model to grow organically.
• Advantages of Franchising
  • Enables rapid global expansion with reduced financial risk.
  • Leverages the local expertise of franchisees to adapt to cultural and consumer preferences.
  • Maintains brand consistency and operational standards worldwide.
  • Generates steady revenue through franchise fees and royalties.