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 “Think locally, grow globally”

To avoid negatively affecting sales, McDonald’s® senior managers in the United States (US) headquarters realized that they should not apply identical American standards worldwide.

McDonald’s® must now think locally to grow globally.

British-born Steve Easterbrook, head of McDonald’s® in the United Kingdom (UK), understood the need for strategic change and prepared tactics with two objectives:

• to attract new and different customers 

• to enhance the good value of products to appeal to customers during economic recession.

One of the first tactics in the UK was the introduction of “Little Tasters®”, which offered new products, in small portions, at low prices. Steve understood that young mothers, when taking their children to McDonald’s®, would not buy meals for themselves because they felt the portions were too large. Other tactical changes, in response to customer demand, included the introduction of more chicken-based products for health-conscious customers. Moreover, an improved breakfast menu and better quality coffee attracted more price-conscious people on their way to work.

These adaptations to local conditions proved successful in the UK and beyond. McDonald’s® UK had 13 million more customers in 2010 compared to 2009, resulting in an increase in market share (during the economic recession). In other host countries McDonald’s® also successfully implemented its “think locally, grow globally” strategy. For example, it successfully launched products made from local produce and suited to local tastes such as the “Maharaja MacTM” in India, the “McLobster®” in Canada and the “Ebi Filet-O” (a shrimp burger) in Japan.

At the same time McDonald’s® launched a “global uniform initiative” to redecorate its restaurants with uniform appearance. McDonald’s® still tries to maintain the global recognition and the quality of its global brand. Local construction material and local labour are used, as well as different colours, comfortable armchairs and free Internet access. Other multinational food and drink companies, such as KFC® and Starbucks®, are also using a similar strategy to the “think locally, grow globally” strategy used by McDonald’s®

Draw the Ansoff matrix and use it to explain the growth strategies used by McDonald’s®.