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McDonalds Vietnam

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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
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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:
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