Mcdonald's Is China Loving It? Possible Solution
III. Identification of Alternatives
With China’s rapidly developing economy, the rising wealth of its middle-class and more Western fast-food chains infiltrating the nation, McDonald’s finds itself at a crossroads. The company must evaluate its current standing in the Chinese fast-food market and elect to either continue its present operations, hoping to maintain its second place rank to KFC, or implement new strategies to gain market share, meet the Chinese people’s expectations, and abide by governmental standards. The following alternatives will be evaluated to make a decision:
1. Base – Status Quo
In this scenario, McDonald’s will continue operating under its current strategies. New threats from competitors in China, including long-time rival KFC, Asian fast-food companies like Hong Kong’s Café de Coral, Taiwan’s Dicos Fried Chicken and Japan’s Ajisen Ramen, and emerging Western chains like Subway and Rainforest Café, would be ignored. Since its competitors’ menus focus on Chinese preferences for chicken and noodle dishes, McDonald’s will attempt to continue to offset that advantage by emphasizing quality and service. However, in the long run, McDonald’s operations would fall victim to China’s developing economy. In particular, China’s unionized workers would call for additional pay increases and inflationary pressures would cause material costs to rise. As a result, McDonald’s would be forced to increase its prices, as it had done in the past. In all likelihood, the price point for the quality of food offered would fail to live up to public and governmental standards. With competitors progressing in tandem with China’s economy, offering more luxurious casual dining environments and healthier menu options, McDonald’s would fall behind in the market.
2. Option 1: Efficiency, Convenience, and Environmental Responsibility.
In this case, McDonald’s would augment its strategies to remain competitive with Western fast-food counterparts like
With China’s rapidly developing economy, the rising wealth of its middle-class and more Western fast-food chains infiltrating the nation, McDonald’s finds itself at a crossroads. The company must evaluate its current standing in the Chinese fast-food market and elect to either continue its present operations, hoping to maintain its second place rank to KFC, or implement new strategies to gain market share, meet the Chinese people’s expectations, and abide by governmental standards. The following alternatives will be evaluated to make a decision:
1. Base – Status Quo
In this scenario, McDonald’s will continue operating under its current strategies. New threats from competitors in China, including long-time rival KFC, Asian fast-food companies like Hong Kong’s Café de Coral, Taiwan’s Dicos Fried Chicken and Japan’s Ajisen Ramen, and emerging Western chains like Subway and Rainforest Café, would be ignored. Since its competitors’ menus focus on Chinese preferences for chicken and noodle dishes, McDonald’s will attempt to continue to offset that advantage by emphasizing quality and service. However, in the long run, McDonald’s operations would fall victim to China’s developing economy. In particular, China’s unionized workers would call for additional pay increases and inflationary pressures would cause material costs to rise. As a result, McDonald’s would be forced to increase its prices, as it had done in the past. In all likelihood, the price point for the quality of food offered would fail to live up to public and governmental standards. With competitors progressing in tandem with China’s economy, offering more luxurious casual dining environments and healthier menu options, McDonald’s would fall behind in the market.
2. Option 1: Efficiency, Convenience, and Environmental Responsibility.
In this case, McDonald’s would augment its strategies to remain competitive with Western fast-food counterparts like