Subject category:
Strategy and General Management
Published by:
Asia Case Research Centre, The University of Hong Kong
Length: 14 pages
Data source: Published sources
Abstract
McDonald''s, the world-famous American fast food franchisor, entered mainland China in 1990, when Chinese franchise law did not even exist. In this once closed country whose market only opened up to foreign investors in 1978, McDonald''s had to adapt to an unfamiliar and rapidly changing environment. Not only was food culture in China vastly different from that in the West, but food culture, lifestyles and legal structure were altering as a result of surging economic growth and massive urbanisation. Competition was also intensifying as local and foreign restaurants sought to capitalise on China''s increasing affluence. As the growing middle class demanded higher standards from these companies, McDonald''s local business practices in terms of food healthiness, employee welfare and other socio-environmental issues were put under close scrutiny in China. While the nation''s booming economy provided environmental conditions suitable for fast food culture, the environment also posed challenges to the survival of fast food operators in the country. Would McDonald''s be able to sustain its momentum as China transformed into a developed nation?
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Abstract
McDonald''s, the world-famous American fast food franchisor, entered mainland China in 1990, when Chinese franchise law did not even exist. In this once closed country whose market only opened up to foreign investors in 1978, McDonald''s had to adapt to an unfamiliar and rapidly changing environment. Not only was food culture in China vastly different from that in the West, but food culture, lifestyles and legal structure were altering as a result of surging economic growth and massive urbanisation. Competition was also intensifying as local and foreign restaurants sought to capitalise on China''s increasing affluence. As the growing middle class demanded higher standards from these companies, McDonald''s local business practices in terms of food healthiness, employee welfare and other socio-environmental issues were put under close scrutiny in China. While the nation''s booming economy provided environmental conditions suitable for fast food culture, the environment also posed challenges to the survival of fast food operators in the country. Would McDonald''s be able to sustain its momentum as China transformed into a developed nation?
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