Why McDonald’s Flopped in Vietnam Watch the video named ‘Why McDonald’s Flopped in Vietnam’ in the Two Teachers YouTube Channel ‘Business Case Studies’ Playlist and answer the following questions. http://www.youtube.com/c/TwoTeachers 1. In your own words, define the term globalisation with supporting examples. Process where business/industry begins to have international influence or begins operating on international scales Examples – cultural globalisation, food industry globalisation, trade globalsation 2. Why have McDonald’s failed to be a success and expand into Vietnam? Vietnamese cuisine already had fast service – McDonalds wasn’t as fast, eg pho (noodle soup that can be prepared in seconds), meaning no USP for McDonalds High competition – street food culture, 540,000 food outlets with wide range of products, McDonalds menu mainly with burgers and drinks, couldn’t compete Pricing – McDonalds used Western prices in Vietnam, eg charging $2.82 for big mac – normal if living in West, but premium price if in Vietnam, and therefore removing another of McDonald’s USPs 3. Compare the food culture in Vietnam to the food culture of the UK and US? Vietnam – tradition for families or friends to sit together and share food with each other UK and US – no where near as common, also food McDonalds offer not type that most would want to share This resource is supported by a video on our YouTube Channel @TwoTeachers. Follow us on the following socials for lots more business content: Twitter @TwoTeachersBiz | Facebook @TwoTeachersBusiness | Instagram @TwoTeachersBiz 4. Analyse the key factors that have helped KFC and Pizza Hut to successfully expand into Vietnam? Key factors – for KFC, surveys indicated it was the quality of food, convenient locations and the variety on menu which were the top reasons for favouring KFC Stability and safety in political environment – Vietnam economic growth rate annual increases at 7 to 8.5%, one of highest in world Geographic segmentation – restaurants allocated to big cities with large populations Age segmentation – concentrated on younger people, as these are more likely to adopt fast food trends and have ability/desire to purchase fast food meals a week 5. If you were in charge of McDonalds expansion into Vietnam, what would you do to increase their market share? Product strategy – high demand for healthy food, could involve product development to increase healthiness of products. Additionally, adjusting certain aspects of product could be beneficial, eg adjusting taste and ingredients Pricing strategy – In order to regain USP, will have to rework pricing strategy to increase demand Promotion – localize marketing programs as not able to entice customers everywhere with one common approach Place – begin in high density areas, mainly cities and expand from there This resource is supported by a video on our YouTube Channel @TwoTeachers. Follow us on the following socials for lots more business content: Twitter @TwoTeachersBiz | Facebook @TwoTeachersBusiness | Instagram @TwoTeachersBiz
