Improving McDonald’s in

ChinaErika Friedmeyer

Introduction Aim: To improve McDonald’s market share

among fast-food giants in China

How can McDonald’s appeal to adults (as more than the parents of children)?

How can McDonald’s balance the novelty of western cuisine with local tastes?

Industry BackgroundIndustry

KFC entered in 1987

Over $30b as of 2008

Dominated by KFC & McDonald’s

Rapidly growing industry

McDonald’s Entered Beijing in 1992

Over 1,100 restaurants

Unchallenged by indigenous firms

“Multilocal,” not multinational

Theoretical Framework Institutional Factors

o Informal, cultural influences are very strongo Informal > Formal

Industrial Factorso Rivalry, Substitution forces are strongo McDonald’s uses Cost Leadership

Resource Factorso System of fast, consistent productiono McDonald’s has a well-developed, tested value chain

McDonald’s and the Strategy Tripod

Institution-Based View

• Informal institutions

Customers have to like it!

A Few Issues… Beef isn’t very

popular

China offers a huge market. What about rivals?

Restaurants are used as public space

Informal institutions

Industry factors

???

McDonald’s as Public Space

Why are McDonald’s restaurants appropriated into public property, turning it into a sort of public park? What can McDonald’s do to combat this?

Research Strategies, Method and Time Horizon

Mixed-method Researcho Both quantitative and qualitative data

Cross-Sectional Time Horizono The issue will evolve over time

Questionnaire

4 Case Studies Interviews

Sampling 4 Chinese cities: Beijing, Shanghai, two small

cities/towns 2,000 respondents

Interviewees will be randomly selected from questionnaire respondents (three per age group)

Stratified

Random

Sampling

School-age(14-25)

Professionals(40-60)

Retirees(≤60)

YoungProfessionals

(25-40)

Questionnaire Data Collection: Sample

Questions How long is your average visit?

o 5-10 min, 10-30 min, 30-60 min

Rank the purposes for your visit.o Quick meal, visit with friends, read the paper

Rate the friendliness of the staff.o Extremely Unfriendly Extremely Friendly 1 2 3 4 5 6 7

Interviewing Data Collection

Semi-Structured Respondent-based Focus groups

Sample questionso When you visit McDonald’s, with whom do you go?o How long is appropriate to linger after the meal

is finished?

Piloting

Participants asked to comment on clarity, difficulty of questions

150 pilot questionnaires

Focus groups in Beijingo Various age, social

groups

Analytical TechniquesQualitative

Transcribed/translated

Analytic Inductiono Conditions may not

mandate phenomenon

Quantitative All data cleaned

Imputed Response Substitution

Multivariate Techniqueo Multivariate Analysis of

Varianceo Risk of over-simplification

Reliability and Validity Large sample size

Drawing from four cites: two large, two small

Variety of age groups

Not limited to McDonald’s frequenters

Highly-trained interviewers

Timeframe

12 monthso 8 months for data

collectiono 4 months for data

analysis

Resources Four interviewers

Two translators

Researchers and Analysts

Statistical, Qualitative Data Analysis Software

References

References can be found in an additional document upon request. Contact Mrs. Dena Warneke (dwarneke@trinity.edu) for more information.