McDonald's in China

Political

MD entered China before the franchise law was introduced (in 1990) – restaurants are mainly operated either through joint ventures or wholly foreigned-owned enterprises due to legal and ethical aspects (partners were stealing the secrets). From 1997 franchise regulations were in force for domestic retailers and from 2004 for international.

Developing nations consider MD as a representative of the USA – negative

Chinese people are very patriotic – the restaurants should take this into consideration – adjust menu, slogans, etc.

Politics, especially around Olympics, discussions that Chinese slogan was not patriotic in relation to the USA

Economic

Booming economy. economic growth and massive urbanization. These factors are changing the food and lifestyles (busy days - fast food; higher income/growing wealth – higher quality of food; city life – preserved food)

Increasing affluence - growing middle class requires higher standards

Difference in wealth and income between different provinces – tier pricing

Social

Transformation from closed country to open and dynamic society.

Different food culture – communal plates vs individual servings – "window to the West" – coffee is introduced

Breakfast market is big in China – 80% eat breakfast, from which 68% away from home

Pressure from unions, complaints that the workers are under-paid

Technological

Chinese consumers are looking for healthy food and the Government is concerned about consequences of western diet

Opportunities and threats that McDonald's faces in China

Opportunities Threats

Different food culture (food, servings) – curiosity, trendy place to socialize – Chinese