The well-known formula of “think globally and act locally” is briefly described in this McDonald’s case study as a company’s ability to reduce its costs by pursuing global strategies and increase its market share by pursuing local strategies.
McDonald’s was founded in 1940 California, US. McDonald’s is one of the world’s largest global foodservice company with over 39,000 locations in more than 110 countries. Approximately more than ninety percent of McDonald’s restaurants worldwide are owned and operated by independent local owners and franchisees.
McDonald’s’s Turkey opened its first restaurant in Taksim/İstanbul in 1986. To enter the market, McDonald’s partnered with Dönerci Group, a local Turkish fast-food franchise. McDonald’s Turkey has been operating under the umbrella of Anadolu Group since 2005. McDonald’s Corporation opened its first office in 1991 in Turkey.
Anadolu Group has the country distribution licensee (DL) for McDonald’s Turkey. It focuses on the Turkish market with its main marketing strategy; value for money means “The customer finds the products and services they buy, worth the price they pay ” (Vardar, 2011). As its business model, country DL makes investment and operates restaurants where as it gives sub-franchisees as well. The granted license gives the operator the right to engage in commercial activities under the McDonald’s brand. The conditions for granting the license are as follows:
- McDonald’s management license is given only to the individual person, not to partnerships or companies.
- Since McDonald’s operator must devote all his time and power to the restaurant business, he/she cannot focus on other main businesses.
- Operators should always focus on restaurants, they cannot manage their business remotely.
- McDonald’s license is only for one restaurant, it is not a regional license.
According to its market expansion strategy, McDonald’s lists where to open a restaurant in Turkey and when it finds a suitable place, it either rents or buys it. This also makes McDonald’s a property management company. After McDonald’s prepares the restaurant, the system continues by renting it to the sub-licensee.
When entering the Turkish market, McDonald’s did adjust its business model to suit local preferences and tastes. To do so, it added unique menu items such as shish kebabs, beef burgers with hummus, and Turkish desserts like baklava to their already extensive menu selection. To reach out to a larger audience, McDonald’s also launched a delivery service which saw hundreds of orders placed in the first few weeks of its launch alone.
Despite adapting their offering to local preferences and tastes, McDonald’s faced several challenges while developing the market in Turkey. For one thing, they encountered stiff competition from existing fast-food chains that had already gained a foothold in the market such as Burger King and KFC. Moreover, they also experienced difficulty convincing locals that their food was safe due to an E. coli outbreak in Europe linked to McDonald’s at that time which caused some worry among potential customers. In order to tackle these issues head-on, McDonald’s took steps to assure customers of their products’ safety by increasing standards for food handling procedures throughout all its franchise locations nationwide – this included employee training programs on food safety measures as well as regular inspections from external authorities. Furthermore, they launched several marketing campaigns aimed at counteracting negative publicity about their brand following the E. coli incident by highlighting their commitment towards quality assurance as well as featuring customer testimonials touting the freshness and taste of their products.
But the biggest challenge Mcdonald’s faced in Turkey was that it had to navigate the country’s strict regulations and laws regarding foreign companies. To comply with these laws, Mcdonald’s had to transfer ownership of its stores to another local partner – Anadolu Restoran Isletmeleri Ltd (ARI or Anadolu Group). This transfer was completed in 2015. With that agreement, McDonald’s lost its majority control over the Turkish market and ARI got the majority of the shares in McDonald’s Turkey operations. Since then in Turkey, the company focuses on local strategies more than global strategies due to the effect of its local distribution licensee Anadolu Group.
Since that transfer, McDonald’s has been slowly expanding its presence throughout Turkey. In 2018, the company opened two new locations in Istanbul and Ankara, respectively. In addition to these two new locations, there are currently 24 McDonald’s restaurants located throughout various cities in Turkey.
McDonald’s also created a partnership with an Istanbul based delivery app called Yemeksepeti as part of their expansion strategy in Turkey. The partnership allows customers to order their favorite McDonald’s meals directly through Yemeksepeti without having to leave home or visit a store location.
In conclusion, we should note that McDonald’s Turkey is an example of a company which balances global and local strategies, as such the company implements both global and local strategies for decreasing its costs, increasing its efficiency and aligning its strategies with its headquarters. As we can see in Turkey, it has a more decentralized approach and has a tendency to implement more local strategies. The company can decrease its costs when it implements global strategies whereas it can increase its market share when it implements local strategies.
Today, after nearly two decades of operations within Turkey (and more than 80 years worldwide), McDonald’s keeps supporting its local partners and continues to make strides within the market there by focusing on elements such as expansion into more small cities across the country, convenience for customers through innovative technologies like self-service kiosks or mobile applications for on-the-go ordering; modernization efforts aimed at refreshing its look & feel for modern customers; delivery services available through 3rd party companies like UberEats/Gettaxi; nutritional information at every outlet provided by an independent nutritionist; expansion plans into more cities across Turkey; increased job opportunities through franchise locations; support initiatives towards sustainable agriculture practices (such as free range poultry sourcing) etc. These initiatives have resonated positively with customers who have responded favorably thus far – indicating future success for McDonald’s presence within Turkey going forward.
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