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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 ([email protected]) for more information.