Creating the McUniverse: McDonald’s Source of Power in Foreign Markets

By Sarah Scharf. Stanford University. 

This paper explores McDonald’s transformation from a small town burger joint to the poster child for globalization and economic development abroad. To gain its position as one of the few truly global companies, McDonald’s has exploited various sources of power and competitive advantage. Due to its massive size, McDonald’s enjoys economies of scale in purchasing and expansion, both on a macro level and within individual regions. In addition to purchasing power, McDonald’s has leveraged economies of scale in brand recognition to expand more easily into emerging marketplaces. Finally, McDonald’s has established a unique source of process power thanks to its franchising practices, which allow the Golden Arches to adapt to local tastes while maintaining a strong brand identity. This paper examines these sources of power as well as the challenges McDonald’s may face as it continues to create the McUniverse.

Read the full paper here.