The Integration Responsiveness Framework: McDonald's International Strategy

The Integration Responsiveness Framework: MacDonald's International Strategy
Student's Name
Institutional Affiliation
Instructor
Course
Instructor
. 
The Integration Responsiveness Framework: MacDonald's International Strategy
Introduction
The integration responsiveness framework describes the fundamental aspects of business and derives valuable approaches from these insights. The characteristics of a business comprise a combination of relevant organizational, political, and economic imperatives that inform the strategy formulation process. Besides, conflicting pressures for local responsiveness and cross-border integration may arise as multinational corporations expand into an international market. Organizational leaders face the huge task of effectively managing national needs and business diversity, contributing to significant challenges in making meaningful strategic decisions. Markedly, the degree to which a firm customizes its methods and products to satisfy conditions in global markets, the process in which it can leverage the same approaches and developments in other markets, and the combination of massive pressures of global integration form the integration responsiveness framework. Precisely, pressure for global coordination and integration includes demand for uniform service by multinational clients, opportunities to reduce costs via arbitrage benefits and economies of scale, the need to monitor compliance, the need to monitor competitors, technology intensity, investment intensity, access to energy and raw materials as well as opportunities for global sourcing. Pressure for local responsiveness primarily involves differences in distribution channels, differences in clientele demands, the need to accommodate powerful stakeholders such as financial institutions, consumer groups, and unions, pressure to meet local government legal requirements and regulations, the need to respond to local competition, and cultural differences, to mention a few. MacDonald's has successfully used the international strategy to create value in the global arena while responding to cost reduction and local responsiveness pressures while leveraging its core competencies and skills.
MacDonald's Corporation is perhaps the most notable MNE that pursues an international strategy. MacDonald's is the leading global food service firm with a presence in more than 110 countries and almost 390,000 locations worldwide (Singireddy, 2020). The company serves more than 47 million clients daily. It sells milkshakes, desserts, soft drinks, breakfast items, salads, French fries, chicken products, cheeseburgers, and hamburgers. MacDonald's faces strong competition from other companies such as KFC, Pizza Hut, Taco Bell, Wendy's, Starbucks, Burger King, Sonic Drive-In, and Subway (Singireddy, 2020). It targets consumers of different ages, including adults, youth, and teenagers. It also sells its products to various service holders, including homemakers, event managers, jobholders, business people, and students, to mention a few. Moreover, MacDonald's has numerous service provider tools such as online order delivery, home services, motor vehicles for takeaway, fast food chains, and well-decorated restaurants, depending on the clientele demand. The company earns the highest revenue in India, although it is one of the most challenging markets to penetrate, thanks to government hardships (Guerguis, 2019). Notwithstanding, MacDonald's is a relevant example of an organization that has reaped substantial benefits from an international strategy.
The organization pursues the international strategy to create value by transferring its local competencies to foreign markets. It thrives in the franchisee system and maintains a robust organizational culture through a centralized decision-making process. The environment, self-service system, most brands, and physical structure are similar in MacDonald's franchisees across the globe (Crawford et al. 2015). Operating decisions within the organization are decentralized to the franchisee and regional offices. Also, the company's food menu, image, and name are core competencies that enable the company to operate in international markets. It emphasizes effective local management to afford enhanced responsiveness to the market environment (Mehbin & Hoque Molla, 2013). Moreover, recruiting employees from the local environment gives MacDonald's significant acceptance in the local market. This strategy also gives the firm access to local government bureaucracies. This study aims to demonstrate MacDonald's application of the international strategy to conduct business abroad. The role of this strategy in cost reduction and local responsiveness will also be explained.
The Reason MacDonald's Leverages the International Strategy
MacDonald's adopts the international strategy to leverage skills in foreign markets and maintain homogeneity in its products. The company has a robust organizational culture, as demonstrated above. With this in mind, MacDonald's imports products such as potatoes, beef, and chicken from the same region around the globe to maintain product homogeneity Doole, I., & (Lowe, 2012). Consequently, the taste of the company's products remains the same worldwide. Also, the organization has benefited from leveraging skills and the learning effect that arises when a product from one region is recommended and promoted in other regions (Mujtaba & Patel, 2017). For instance, Arabian dishes provided by the company have become popular with other franchisees and outlets in the international market. The burger is MacDonald's most recognized competency. The firm owns Boston Market and Chipotle Mexican Grill and holds shares in Pret A Manger to get involved in other profitable food businesses (Jarillo, 2013). MacDonald's has gained robust marketing and management skills by utilizing its subsidiaries and reducing costs.
Pressure for Local Responsiveness
Preferences and tastes vary in different global markets, mainly due to historical, weather, and cultural differences. With this in mind, MacDonald's establishes and maintains distinct procedures and policies regarding business and operational practices. Key decisions involving the company's advertisements are based on country-specific languages, traditions, and cultures (Lowe, 2012). Further, the firm has different brands tailored according to the traditional foods of every market at the operational level. Remarkable differences also exist in the demands of host governments, including cultural restrictions, import duties, excise duties, and taxes. The differences are addressed and settled in the host country's regional offices, especially because of the differences in products exemplified by small burgers in Japan, vegetarian restaurants in India, and Halal meat (Yeu et al. 2012). Simply put, the company has embraced the international strategy to conduct international business.
The international strategy appears to fit effectively in the firm's international structure, given that the company does not have substantial local responsive and cost-reduction pressure and aims to respond to local tastes and preferences through innovation. MacDonald's needs to maintain a robust global culture to ensure adequate homogeneity in its brands and franchisees because it makes and keeps all decisions regarding its core competencies to the main office (Crawford et al. 2015). Moreover, it allows franchisees to operate according to local traditions, cultures, regulations, and laws to keep their products according to the market demands and tastes, do business, and attract customers. The product innovations in different markets demonstrate MacDonald's unique ability to provide products that align with varying tastes and preferences. For instance, Japanese cuisine is extremely different from others in other parts of the world. MacDonald's retained this menu for the U.S market in the initial stage. However, the company replaced and added various menu items to satisfy and meet Japanese preferences (Singireddy, 2020). It introduced Teriyaki Burgers, Seaweed Shaker, Rice Burger, and Tea ice cream. MacDonald's Japanese franchise also added breakfast with relish, ketchup, mustard, hotdogs, milkshakes flavored with green tea...