[Authored by MBA Candidate Wesley Payne] As U.S. businesses continue global expansion efforts, even the "experts" continue to learn valuable lessons. With modern technology capable of carrying humans anywhere in the world in a matter of two days and sending communication instantly to any receptive media at any point on the globe, the idea of global expansion seems like the right choice. For some companies, it may be the only path that offers continued growth. The catch continues to be in adequately understanding how to market your product to the culture of the new country.
McDonald's decided in 1981 to expand into Spain (Note: Barcelona unit shown to the left.). This at first seemed like a viable, untapped market of over 8 million people ripe for invasion from the fast food industry. After successfully negotiating with the government, McDonald's went about spreading quickly throughout the European peninsula.
Unfortunately, McDonald's was not ready for two aspects of the Spanish culture. First, was the lack of reason for and desire to rush through one's meal. The Spanish are a very laid back people that adhere to a pace of food consumption most Americans would consider painfully slow. When the McDonald’s people came in offering quick food to take home to eat after work, the Spanish simply saw no need for it.
After recovering from this setback and refocusing their marketing to young Spanish parents and immigrants with kids, they made another mistake by not offering alcoholic beverages. When they started to draw in the young families with the promise of a playground and no hassle meals for children, they noticed the parents would not eat. After some surveying, they found that the parents wanted to drink wine or beer with their meals. Since its inception, no McDonalds had ever served beer at the restaurants in any city or country in the world. This has since changed, and now the corporation serves beer throughout Europe within its stores.
So did the changes make for a successful foray into Spain and later Europe? Yes and No. According to the company website, McDonald's is currently in over 60 countries, with Spain ranked number 11, with over 260 stores. They have also penetrated the rest of Europe with other major countries on the continent presently accounting for half of the top ten. Though McDonald’s did not change the culture and currently provides very few stores when considering Spain’s population of 40 million, they do continue slow and steady growth. It is no doubt in part to their adaptations, but some credit should be given to globalization as a whole. McDonalds may have been ahead of its time when it first tackled the Spanish market. However, as their economy continues to grow and global cultural norms continue to blur, it could be that their timing will work out rather well.
Authored by Wesley Payne, MBA Candidate