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CHAPTER 1 What Is Business? 29

Case in Point

McDonald’s Corporation: Ronald Goes to France

In a country known for its exquisite cui- United States may not work abroad! Understand your
sine and proud culture, the entry of a customer and deliver value! McDonald’s generally
U.S. fast-food icon could have been a adapts its menus to reflect local tastes. In the French
shock to the French. Yet, McDonald’s has been pretty case, it became apparent to McDonald’s that customers
profitable in its French operations. Since setting foot in were willing to pay a premium for the ambiance and
France in 1972, McDonald’s has been quite successful the more expensive food items, including beer and
in marrying its basic fast-food philosophy to French espresso, that were added to the menu. This way, the
palates. Currently, McDonald’s has some 930 outlets French were able to enjoy their meal, beer, and
with some 35,000 employees in France. For the espresso in comfort without being rushed.
French, eating out is a way of life—an experience in To address the issue of ambiance, almost one-half
culture. The tradition-oriented French believe that food of the 930 McDonald’s outlets in France have been
is to be savored at leisure, not “gobbled down.” Those upgraded to a level that will be unrecognizable to an
of you who have visited France will have realized that American. The Golden Arches are almost invisible;
the French do take long meal breaks. It is part of their hardwood floors, exposed bricks, and armchairs are
culture to enjoy food with a glass of wine (sometimes the norm. Furthermore, in order to blend in with the
beer) and discuss lofty private, local, and world events physical environment of the local area, McDonald’s
in a comfortable setting for hours on end. has adopted different themes. For example, the
When we think of McDonald’s, what comes to largest and most-frequented French McDonald’s out-
mind is relatively inexpensive food (with no alcoholic let is on the Champs Elysees with a cozy Parisian
beverages) served in decent portions, quick service, a atmosphere, the McDonald’s outlet on the Basque
clean restaurant environment, and above all the coast has a surfing theme, and the one located in the
familiar Golden Arches, which are visible from a heart of the skiing area in Briancon features large
distance in the United States. In addition, quite a few stones, beams, and big heavy tables.
McDonald’s restaurants in the United States have As they say, when in Rome, do as the Romans
drive-thru windows. Finally, most of the customers do—but don’t sacrifice your business principles!
visiting McDonald’s restaurants in the United States
Source: Adapted from “McHaute Cuisine: Armchairs, TVs, and
do not spend too much time there beyond eating. Espresso—Is It McDonald’s?” The Wall Street Journal, August 30,
Although McDonald’s has been in France for over 2002; pp. A1, A6 and www.mcdonalds.com.
30 years, this has not been without incidents.
Resentful of McDonald’s incursion into French Questions
culture, Mr. Jose Bove, a militant French farmer,
1. What was McDonald’s business strategy in
became a national hero in 1999 after driving his
France? Was it successful? How?
tractor into a McDonald’s restaurant in southern
2. If you were to open a McDonald’s franchise in
France. Although Mr. Bove was convicted, the
India, what are some of the major factors that you
message was clear: globalization requires adaptation
would consider before making that investment?
in order to achieve success. What works in the

Coca-Cola decided to boost profits by reactivating the sale of Limca, a popular
Indian lemonade drink that it had acquired, rather than force Coca-Cola down the
throats of Indians! Businesses today need employees at all levels to be open to vary-
ing ideas and viewpoints, and that can only be brought about by practicing cultural
diversity. The success of companies like Samsung, Sony, Toyota, VW, Microsoft,
IBM, GE, Lockheed Martin, Merck, Johnson & Johnson, Procter & Gamble, and so
on can be largely attributed to their commitment to and appreciation of cultural
diversity at work and in the marketplace. The key to the success of these companies
is their willingness to adapt goods and services to meet local demand.

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