MCDONALD’S IN VIETNAM

By Ayodeji Akin Abiri

McDonald’s Enters Vietnam Page 1

Table of Contents

Abstract

1.0 Introduction 3

1.1 Background note 4

1.2 Global Strategy 5

2.0 McDonald’s In Vietnam 8

2.1 Entry Strategy 9

2.2 PESTEL analysis of Vietnam 9

2.3 SWOT analysis of HCM city 11

2.4 Expansion strategy 12

2.5 Franchising in Vietnam 13

2.6 Drive-thru restaurants 13

2.7 Localization strategy 13

3.0 Competition & challenges 14

3.1 Recommendations 15

3.2 Conclusion 15

Exhibit I 16

Exhibit II 18

Exhibit III 29

References 32

McDonald’s Enters Vietnam Page 2

McDonald Enters Vietnam

Abstract

This paper analyzes the globalization options for McDonald’s by going into Vietnam.

The paper explores McDonald’s global strategy as well as its expansion strategy. Aside

from the globalization evaluation, this study also examines the entry mode in Vietnam.

In the concluding sections, I was able to outline the challenges and recommendations

for McDonald’s.

Key words: globalization, strategy, fast food, expansion

1.0 Introduction

McDonald’s Corporation is the world’s largest hamburger fast food chains which serves

up to 64 million customers daily. McDonald’s annual report in 2007 revealed that it

served one billion more customers globally in the previous year because of its

reasonably priced menus such as Ein Mal Eins in Germany, the value Menu in China

and the Dollar Menu in the US. These menus normally included up to 10 items with

desserts, side dishes, entrees and drinks which could be mixed by customers to make a

meal or a fast snack.

According to McDonald’s 2010 report, global comparable sales growth was 5%,

earnings per share is 11%, average number of customers served per day was 64

Million. The Asia/Pacific, Middle East, and Africa (APMEA) contributed to 21 percent of

its total revenues, driven by comparable sales increases in China, Australia and most

other markets. Asia is one of the vital markets for McDonald’s as it added significantly to

the company’s revenue and operational earnings in the past 30 years.

McDonald’s entered Asia in 1971 with the first restaurant in Tokyo, Japan. Since then it

began to expand steadily in Japan and other Asian countries. Honk Kong in 1975,

Singapore in 1998, Malaysia in 2001 Taiwan in 2003, South Korea in 1988, China in

McDonald’s Enters Vietnam Page 3

1990, and India in 1996. Apart from McDonald’s home market-the US, China was the

major growth market with 1000 restaurants and over 60,000 employees as of 2010.

In Asia, McDonald’s became the symbol of modern lifestyle in countries like China,

Thailand, India and Indonesia. However it remained American in its services, menu, and

administration. McDonald’s brought in difference in its ingredients and products to fit the

Asian palate and culture.

McDonald’s entry into Vietnam is certain to bring a new style of fast food service to local

people and will no doubt provide strong competition to similar names like KFC (US),

Jollibee (the Philippines), Lotteria (Japan), which have been in Vietnam for more than

10 years and Subway (US) which just entered.

1.1 Background Note

The early stages of McDonald’s date back to the 1930s, when the McDonald brothers

(Mac and Dick) opened a fast-food restaurant called Airdrome in Arcadia, California,

that sold coffee, tea and hot dogs. Stimulated by the decent response to their first

eatery, they decided to increase their business. In 1940, they opened a grill restaurant

in San Bernadino, California. The grill restaurant had up to 25 items on its menu like

pork sandwiches and barbecue beefs. McDonald’s hired 20 carhops to provide fast food

service to customers.

The McDonald’s brothers ran the restaurant for eight years until they found it difficult to

cope with the large scale of the business with many staff, broad menus huge crowds

that packed the restaurant. In 1948, they reduced the menu in order to scale down

operations and develop a method to attend to customers rapidly with fewer resources.

The process helped McDonald’s to introduce self-service, serve more customers,

increase speed, eliminated carhops and reduced the price of hamburger by half.

The McDonald’s brothers in 1953 decided to go into franchising as a mandate to

expand their business. A franchisee needed a thousand dollars to receive the

McDonald’s name, one week training from Art Bender, and a basic description of

McDonald’s service system. The role of Bender is to train staff at the franchisee’s

McDonald’s Enters Vietnam Page 4

restaurant, make contact with bakeries and butchers for supplies, supervise equipment

installation, etc.

The first McDonald’s franchise was Neil Fox, who started a drive-in restaurant in

Phoenix, Arizona. It became an example for the McDonald’s chain. The franchise

business grew from strength to strength the following years.

Ray Kroc in 1954, a salesman for a company that supplies milkshake mixers to

McDonald’s found out that they used a method similar to an assembly line system. He

sensed an opportunity to sell the milk shake mixers to all the McDonald’s restaurants

that opened and he persuaded the McDonald’s brothers to open more outlets. But the

McDonald’s brothers were content with the present operations and were not interested

in expanding the business. Kroc applied for a McDonald’s franchise and he applied his

experience as a salesman to create an effective franchising business. He retained

McDonald’s formula and shaped the operating principles of quality, cleanliness, service

and value. Under Ray Kroc’s supervision, McDonald’s developed to be the largest fast

food chains in the US. (Refer to Exhibit 1 for a brief note on McDonald’s growth)

1.2 Global Strategy

After attaining success in the US, McDonald’s on June 1, 1967 opened its first

international restaurant in Canada. More restaurants followed in the early seventies with

presence in Germany, France, Australia and England. McDonald’s entered Asia in 1971

by opening a restaurant in Japan through a joint venture with a local partner (Den Fujita)

who is a successful business man.

In 1990, McDonald’s opened a restaurant that was the biggest joint venture between a

food company and the Soviet Union. McDonald’s built a $45 million modern food

processing facility in Moscow to meet the increasing demand in the Soviet Union which

attends to 50,000 customers daily.

In the mid-1990s, McDonald’s was already in 58 countries by operating more than 3,600

outlets outside the United States through joint ventures, franchises and wholly-owned

McDonald’s Enters Vietnam Page 5

subsidiaries. McDonald’s had strong presence in Canada, UK, Japan, France and

Australia. These countries accounted for 37 percent of McDonald’s revenue in 1991.

McDonald’s in 1992 opened its first African restaurant in Morocco. It entered the Middle

East in 1993 with the first restaurant in Tel Aviv, Israel. More restaurants followed in

Oman, Saudi Arabia, Egypt, Kuwait, Bahrain, Qatar and UAE. India got its first

McDonald’s in 1996. Afterwards, it opened more outlets in countries like Hungary,

Slovenia and Czech Republic. In 1995, the company had 7,030 outlets in 110 countries

with sales of US$14 billion. A further increase to 11,000 outlets in 114 countries was

recorded in 1998.

McDonald’s recorded a fourth-quarter loss of US$343.8 million in 2002 which was the

first quarterly loss the company will witness as a public company in 38 years. This made

McDonald’s to change its strategy by stopping its plan to open new stores and focus on

developing its current restaurants. McDonald’s closed underperforming outlets, cut jobs,

withdrew from three countries in Latin America and Middle East. This resulted in

opening 600 restaurants in 2001 compared to 2000 in 1996.

As at August 2011, there were a total of 32, 737 McDonald’s outlets of which about 80

percent were franchised. (Refer to Exhibit 2)

The key to McDonald’s international success is franchising. Franchising to local people

helped the company’s operations in foreign countries easy in terms of product and

service. McDonald’s generated US$4.9 billion in 2007 due to growth in global

operations. The company’s entry into new markets showed its flexibility with respect to

customs and local food preferences. McDonald’s adopted a similar strategy used in US

for its international markets, but with some slight variations in the menus offered to suit

local tastes. An operations procedure which focused on quality, service, cleanliness,

and value coupled with a solid local partner with customary McDonald’s menu were the

roots for the company’s international success. The global strategy that was adopted

was called “Plan to win” which focused on the five P’s of marketing- People, Place,

Products, Promotion and Price.

McDonald’s Enters Vietnam Page 6

The key to McDonald’s international success was the ‘think global, act local’ initiative

which helped the company to excel in every region it opened its restaurants. It adapted

its operations based on the home country in which it is operating. An example is

keeping in mind the local sentiments in the Arab countries, Singapore and Malaysia.

McDonald’s did not serve pork, maintained the ‘Halal’ menus and they observed the

Islamic laws for preparing food. In Japan, McDonald’s brand name was changed to

Makudonaldo to make the pronunciation easy for the Japanese consumers.

In Israel, McDonald’s were closed on Saturdays to observe the Jewish Sabbath Day;

restaurants did not serve dairy products; Big Macs were served without cheese in most

outlets. McDonald’s catered for the vegetarians in India by serving the McNuggets; it

also served Maharaja Mac to some religious communities in that are against beef. In

Ireland, the local strategy was a promotion that stated, “Our name may be American,

but we are all Irish”

McDonald’s had to alter its traditional menu to suit the needs of the customers in

different nations. It changed its product offerings to adapt to the tastes of the local

people. Some instances are beer in Germany, guava juices in tropical countries, chilled

yogurt drinks in Turkey, vegetarian burgers in Netherlands, cold pasta and espresso in

Italy, Teriyaki Mac and McGriddles in Japan, McSpagetti in Norway, McHuevo in

Uruguay, Samurai burger in Thailand, and Filet-O-Fish in China.

The additions and variations did not change the basic structure of McDonald’s menu. Its

menu remained the same globally consisting of burger or sandwich, fries and a Soda

drink. Although the main course was slight different in some countries, the main product

of the company ‘the fries ‘were always present in its entire menu globally.

As per prices, the demand in each country determined the price for McDonald’s

services. A Big Mac with fries will cost more in other countries that in the US because

fries are a common food item in the US than some other countries that sees it as a

luxury. By offering variety and locally related menu extensions, McDonald’s has always

been delivering value to its customers.

McDonald’s Enters Vietnam Page 7

2.0 McDonald’s in Vietnam

Vietnam is a huge potential to McDonald’s global expansion. Over the years, Vietnam

has enjoyed strong economic growth, a change in spending habits, increasing demand

for western brands, growth in urban population and a major tourist destination. Vietnam

now has a more prosperous population with disposable earnings and a cultural

tendency to expend it on fast food in the large urban centers of Ho Chi Minh (HCM)

City, Danag, Hai Phong, Hanoi, and Can Tho. Vietnam’s two main cities are Hanoi and

Ho Chi Minh City. In the middle of these two cities is the famous shoreline where local

and international tourists visit to adore the remarkable scenery of the beaches and

islands on the South China Sea. These cities are rapidly gaining attractiveness and the

associated fast food service industry is facing increasing demand.

According to the results of a study on fast food consumption among Vietnamese people

conducted by AC Nielson in 2009, there is robust demand and fast food is welcomed as

a model. Seventy percent of persons interviewed said that they liked eating at fast food

outlets because they liked the atmosphere and the service standard. Steady fast food

customers tend to be those earning high incomes, with 27 percent responding that they

eat fast food at least once in a week. Sixty percent of people interviewed said that they

chose fast food because they like the swift service, while 26 percent said that they

considered fast food as a right meal.

Vietnam has a young, dynamic and educated population of over 89 million consumers,

the largest in the South East Asia. The country has a literacy rate of 94 percent and a

population growth of 6% which is expected to reach 100 million by 2024. Vietnam is

currently enjoying one of the highest GDP growths in Asia, a 6 percent per year which is

second only to China.

In 1986, there was a significant change in business when the government introduced a

policy called “doi moi” (‘renovation’) to allow limited private enterprise. The policy

McDonald’s Enters Vietnam Page 8

allowed family business to become popular and skilled entrepreneurs from South

Vietnam started to change the country from a dominant government control to a free

market economy.

2.1 Entry Strategy

McDonald’s is going to adopt the ‘Green Field ‘approach in Vietnam. The wholly owned

subsidiary will be the best option for McDonald’s to introduce quality, service and

innovation. A PESTEL analysis of the 8 sub regions shows that the Ho Chi Minh City

has the best conditions to open the first restaurant. HCM city is an area with a growing

middle class who will be the most likely to visit McDonald’s restaurants. The city is also

suitable as a start up due adequate infrastructure, government support, low tax and

convenience.

McDonald’s will take cue from the joint venture success in China by partnering with the

Vietnamese Ministry of Agriculture and its associations to facilitate smooth business

operations. This type of venture will give McDonald’s the ease of receiving agricultural

supplies, buy supplies and build up distribution channels. It will also establish a good

network of local farmers, manufacturers, and other suppliers needed for McDonald’s

business.

2.2 PESTEL Analysis of Vietnam

Political

Government is paying more attention to the benefits and interests of customers.

Many laws have been passed to define the responsibilities of business firms.

Business firms must meet the requirements on product safety, labor laws, truth in

adverts, environmental issues, customer’s interest and so on.

Economic

Member of WTO.

Steady economic growth.

McDonald’s Enters Vietnam Page 9

More jobs with better salaries.

High purchasing power.

Changes in purchasing pattern.

Social

Vietnamese like to buy at a cheap price.

Careful in buying decisions.

Not loyal to one product, but some are likely to choose the products they trust.

Vietnamese prefer to try products by themselves than to believe salespersons.

Technology

HCM city has evolved from a traditional agricultural city to a technological

society.

Modern and high-tech equipment are in use.

Standard of living has improved due to people living in more convenient

conditions and is offered various products and services on demand.

Environmental

Monsoon climate with four distinct season with high humidity.

Environmental problems include water, air and solid waste pollution.

Slow progress in achieving environmental sustainability due to low awareness in

local departments, weak commitment by sectarian agencies and capacity

challenges at all levels.

Environmental sustainability is part of Vietnam’s Comprehensive Poverty

reduction and Growth Strategy.

Legal

McDonald’s Enters Vietnam Page 10

Weak and evolving legal system.

Judiciary is controlled by the ruling party (CPV).

Vietnam is constantly passing progressive laws that are making it more open for

foreign investors to do business.

Potential government interference to satisfy their own agenda.

2.3 McDonald’s SWOT Analysis of HCM City

Strengths

Largest metropolitan city in Vietnam with 9 million people. Majority of the

population is young and literate.

Economic center of Vietnam- GDP per capital is $2800 compared to Country’s

average of $1042. Fast growing economy that has reduced poverty rate to the

barest minimum.

Good transport and communication systems.

Tourism haven

Huge pool of skilled labor force

McDonald’s will be able to implement its QSCV Principle

McDonald’s Quality assurance and good customer service are better than

competitors

Aggressive competitive strategy

Low price of products

Ability to learn from competitors’ mistakes

Weakness

Late Entry

McDonald’s Enters Vietnam Page 11

Limited Menus than competitors

Contribution to obesity

Opportunities

Increase in demand for fast food in Vietnam

Innovation in product and services

Fast food penetration still low which is an opportunity for growth

Threats

More local and foreign competitors rising quickly.

Government policies on fast food and healthy meal.

Outbreak of bird flu.

2.4 Expansion Strategies

McDonald’s success in HCM city will act as an impetus to expand to other regions in

Vietnam. The focus of expansion in other regions will be in busy locations like shopping

malls or organized markets. Through the proposed agreement with the Vietnamese

Ministry of agriculture and local farmers, McDonald’s will be able to open 50 outlets

yearly. A food processing plant will also be built at different locations in the country. This

will be an advantage to McDonald’s because Vietnam is country developed in

agriculture. McDonald’s will ready get raw materials like milk, vegetables and potatoes

while the company can export the excess supplies to other countries.

McDonald’s will focus on strategies related to quality breakfast, convenience, menu

additions, value for money, extended hours of service, drive through restaurants and

delivery services.

McDonald’s Enters Vietnam Page 12

2.5 Franchising in Vietnam

In the long-term, McDonald’s will franchise some of its restaurants in Vietnam. This is to

reduce the business expansion cost and create more jobs opportunities for the local

people. McDonald’s as a franchising company has three fourth of its stores worldwide

as franchises. Franchising in Vietnam will take place after the McDonald’s business in

Vietnam is refined.

2.6 Drive-Thru Restaurants

During the 2000s, Vietnam witnessed remarkable economic development that

generated a huge market for fast food, consumer goods and cars. The automobile

industry in Vietnam was stimulated by the government’s resolution to reduce tariffs on

imported cars starting January 1, 2006. This resulted in an increase in people’s income,

change in lifestyle, and improved standard of living. According to Vietnam Automobile

Manufacturers Association, in 2010 over 110, 000 manufactured or assembled cars

were sold in Vietnam. Due to the continuous rise in the ownership of cars, McDonald’s

will introduce the drive-thru model in Vietnam. The drive-thru model has always been an

integral part of McDonald’s which has given a brand advantage. The model will thrive in

a residential and business area in the city.

2.7 Localization strategy

Vietnamese customers are loyal to their Vietnamese cuisine with a rich eat out tradition.

Vietnamese food depends deeply on rice grown in water paddies throughout the

country, with cuisines varying from simple everyday meals to complex cuisines

designed for the Monarch. Attaining a balance between meat and fresh herbs; as well

as a careful use of spices to get a fine taste, Vietnamese is said to be one of the

healthiest yet most divine cuisines globally. Peanuts are also used commonly in

Vietnamese cuisine.

To be profitable in Vietnam, McDonald’s will need to localize its products like its

competitor KFC which added some local products on its menu. A balance between local

cuisines and McDonald’s traditional products will be very important in the Vietnamese

McDonald’s Enters Vietnam Page 13

market. McDonald’s will introduce dishes like ‘McThai’ that will combine a variety of

herbs, vegetables and meats.

3.0 Competition and Challenges

McDonald’s will face intense competition in Vietnam local and foreign competitors. Its

biggest rival is KFC (Yum Brands) which has 77 outlets and has operated for 14 years

in Vietnam. Vietnamese customers are already familiar with their brand and they have

been expanding by the year. KFC has a well-developed distribution system that

permitted it to gain access to places other than the main city locations. KFC marketing

policies focus on the young population and children with special marketing programs.

KFC is also planning to launch their drive-thru restaurants.

Lotteria is one of the most successful restaurant chains in Vietnam, with 67 restaurants.

Lotteria offers a range of promotions such as discounts of fifteen percent to twenty

percent to make their restaurants more attractive to Vietnamese customers. With a

steady expansion strategy, Lotterria has vowed to continue to conduct research and

develop products and services to make them suitable with Vietnamese customers.

Jollibee with 30 restaurants has seen Vietnam as a key market to its growth

Subway with one restaurant is planning to open 25 restaurants in 5 years. Its entry into

the Vietnamese market will make it more vibrant and create more choices for the

Vietnamese customers

There is also a risk of new small scale competitors in the fast food market because of

minimal capital requirements, lack of managerial complexity, and low entry barriers.

McDonald’s can also face products imitation from Vietnam’s local restaurants. However,

the biggest threats can come from food safety and disease outbreak such as bird flu

McDonald’s Enters Vietnam Page 14

3.1 Recommendations

McDonald’s should use a scheme that will satisfy their Vietnamese employees

through a benefits program that will energize, attract, retain and reward talented

staff who will be able to generate superior results and boost the corporations

leadership position in the fast food industry.

McDonald’s should conduct a comprehensive market survey of competitors’ store

locations in Vietnam combined with demographic data that will help McDonald’s

management discern market gaps, improving profitability and overall efficiency.

McDonald’s should continue to have the right products at the right price.

Consumer taste inclinations are changing daily and McDonald’s must respond by

providing a variety of taste and price preferences in order to maintain their

competitive advantage alongside other fast food companies

McDonald’s should ensure their outlets are showplaces. The “green field” entry

strategy should be used to build restaurants that will always look fresh and

contemporary.

McDonald’s must keep promoting their brand in Vietnam. This should include

motivating the employees to work for the brand, taking the lead on environmental

issues and promoting consumer health matters.

3.2 Conclusion

McDonald’s will encounter some tough challenges as it grows to new markets.

Fundamental to its prospective success will be maintaining its core strengths—a

persistent emphasis on consistency and quality—while prudently testing with innovative

options. These new initiatives could include identifying more with the local market and

introducing sophisticated restaurants under novel brands that wouldn’t be burdened with

McDonald’s fast-food image. McDonald’s could also look into growing more

McDonald’s Enters Vietnam Page 15

aggressively in other Asian and African countries where the prospects for substantial

growth are greater.

Exhibit I: McDonalds International Expansion

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*The list is not exhaustive and compiled from various sources

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YEAR COUNTRY YEAR COUNTRY

1940 USA 1988 South Korea

1967 Canada 1988 Hungary

1967 Puerto Rico 1990 Russia

1971 Japan 1990 China

1971 West Germany 1991 Greece

1971 Australia 1992 Poland

1972 France 1993 Israel

1974 UK 1993 Saudi Arabia

1975 Hong Kong 1994 UAE

1976 New Zealand 1995 South Africa

1976 Switzerland 1996 India

1978 Belgium 1998 Pakistan

1979 Brazil 1998 Sri Lanka

1979 Singapore 1999 Georgia

1981 Malaysia 2001 Mauritius

1984 Taiwan 2003 Kazakhstan

1985 Italy 2008 Algeria

1986 Argentina 2011 Bosnia and

Herzegovina

Exhibit 2: Countries with McDonald’s Franchises

# Country Date First outlet locationNumber of currently

operating outletsNotes

1  United StatesMay 15 ,1940

San Bernardino, California.13,381 (source: May 2000)

2  CanadaJune 1, 1967

Richmond, British Columbia.1,400 (source: March 2007)

3  Puerto RicoNovember 10, 1967

First McDonald's in Latin America and in the Caribbean.

4 U.S. Virgin 

IslandsSeptember 4, 1970

5  Costa RicaDecember 28, 1970

San José, 4th street, between 1st and Central Avenue.

36 (source: March 2011)

Third country (not U.S. possession) and first outlet outside Northern America where McDonald's opened.

6  GuamJune 10, 1971

First outlet in Oceania and first outlet outside the Americas.

7  JapanJuly 20, 1971

Tokyo3,598 (source: 2004)

First outlet in Asia

8  NetherlandsAugust 21, 1971

Zaandam225 (source: 2011)

First outlet in Europe.

McDonald’s Enters Vietnam Page 18

9  PanamaSeptember 1, 1971

37 (source: 2009)

10  GermanyNovember 22, 1971

1,361 (source: February 2010)

First outlet in West Germany: outlets in the former East Germany opened in 1991.

11  AustraliaMay 30, 1971

Yagoona, New South Wales[5] 780 (Sep 2011)First outlet in Oceania (in a sovereign state)

12  FranceJune 30, 1972

1,161 (source: December 2009)

First outlet in Créteil in 1972 even though McDonald's officially recognizes the first outlet in Strasbourg in 1979

13  El SalvadorJuly 20, 1972

11 (source: Sept 2009)

14  SwedenOctober 27, 1973

Kungsgatan 4, Stockholm230 (source: December 2009)

First outlet in Scandinavia.

15  GuatemalaJune 6, 1974

80 (source: 2011)

16  CuraçaoAugust 16, 1974

17 United 

KingdomOctober 1, 1974

Woolwich, London1,250 (United Kingdom-wide, source: 2006)

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18 Hong Kong/

 Hong KongJanuary 8, 1975

Paterson Street, Causeway Bay,Hong Kong Island. 

200 (source:2009)

19  BahamasAugust 4, 1975

20  New ZealandJune 7, 1976

Porirua Central, Wellington 152 (Sep 2011)

Founded in New Zealand by Wally and Hugh MorrisFirst South Island restaurants opened atLinwood and Merivale, both Christchurch, on 3 November 1987 

21  SwitzerlandOctober 20, 1976

148 (source: March 2010)

22  IrelandMay 9, 1977

Grafton Street, Dublin79 (source: February 2009)

23  AustriaJuly 21, 1977

Schwarzenbergplatz, Vienna.168 (source: 2009)

24  BelgiumMarch 21, 1978

64 (source: 2004)

25  BrazilFebruary 13, 1979

Rio de Janeiro560 (source: 2009)

First outlet in South America.

26  SingaporeOctober 20, 1979

Liat Towers, Orchard Road121 (source: 2004)

27  SpainMarch 10, 1981

276 (source: 2004)

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28  DenmarkApril 15, 1981

83 (source: December 2009)

29  PhilippinesSeptember 27, 1981

Morayta, Sampaloc, Manila320 (source: 2011)

30  MalaysiaApril 29, 1982

Jalan Bukit Bintang, Kuala Lumpur[10]

194 (source: 2009)

First outlet in a Muslim-majority country.

31  NorwayNovember 18, 1983

Nedre Slottsgate, Oslo68 (source: December 2009)

32  TaiwanJanuary 28, 1984

Taipei City, Taiwan338 (source: 2004)

33  AndorraJune 29, 1984

3 (source: 2009)

34  WalesDecember 3, 1984

35  FinlandDecember 14, 1984

Tampere 93 (source: 2004)

36  ThailandFebruary 23, 1985

88 (source: 2004)

37  ArubaApril 4, 1985

38  LuxembourgJuly 17, 1985

7 (source: 2009)

McDonald’s Enters Vietnam Page 21

39  VenezuelaAugust 31, 1985

197 (source: 2009)

40  ItalyOctober 15, 1985

near Piazza di Spagna, Rome392 (source: 2009)

41  MexicoOctober 29, 1985

500+ (source: 2011) 

42  CubaApril 24, 1986

Guantanamo Bay 1 (source: 2009) Guantanamo Bay

43  TurkeyOctober 24, 1986

Istanbul160 (source: 2010)

First outlet in the Greater Middle East.

44  ArgentinaNovember 24, 1986

Belgrano, Buenos Aires187 (source: 2009)

45 Macau/  

MacauApril 11, 1987

Then Portuguese territory; McDonald's would only open a restaurant in Portugal itself 4 years later

46  ScotlandNovember 23, 1987

Dundee[13]

Second store was Kirkcaldy. It took over 13 years since McDonald's first appeared in the UK.

47 Yugoslavia/

 Serbia

March 24, 1988

15 (source: 2011)First outlet in a communist country and first outlet in the Balkans.

48  South KoreaMarch 29, 1988

Seoul243 (source: 2011)

49  Hungary April 13,  Budapest[14] 100 (source:  Second communist country, 

McDonald’s Enters Vietnam Page 22

1988 2009)first Warsaw Pact member, thus first outlet behind theIron Curtain.

50 Soviet Union/

 RussiaJanuary 31, 1990

270 (source: 2010)

51  ChinaOctober 8, 1990

Shenzhen 850 (August 2010)

52  ChileNovember 19, 1990

69 (source: 2009)

53  IndonesiaFebruary 23, 1991

Sarinah, Jakarta110 (source: 2009)

54  PortugalMay 23, 1991

CascaiShopping, Cascais 91 (source: 2004)

55 United 

Kingdom Northern Ireland

October 14, 1991

Belfast 32 (source:2006)

56  GreeceNovember 12, 1991

48 (source: 2004)

57  UruguayNovember 18, 1991

Montevideo

58  MartiniqueDecember 16, 1991

59 Czechoslovaki

aMarch 20, 1992

72 (source: 2006)First outlet in Czech Republic.

60  GuadeloupeApril 8, 1992

61  PolandJune 17, 1992

249 (source: 2010)

62  MonacoNovember 20, 1992

McDonald’s Enters Vietnam Page 23

63  BruneiDecember 12, 1992

1 (source: 2004)

64  MoroccoDecember 18, 1992

Casablanca

First outlet in Africa - McDonald's is now present in all continents except Antarctica.

65 Northern 

MarianasMarch 18, 1993

2 (source:August 2011)

First outlet opened on the island of Saipan - Along with the a second outlet in 1997

66  IsraelOctober 14, 1993

153 (source: May 2010)

67  SloveniaDecember 2, 1993

In Čopova Street, Ljubljana 16 (source: 2009)

68  Saudi ArabiaDecember 8, 1993

60 (source: 2009)

70  KuwaitJune 15, 1994

37 (source: 2007)

71 New 

CaledoniaJuly 26, 1994

72  OmanJuly 30, 1994

9 (December 2009)

73  EgyptOctober 20, 1994

50 (source 2003)

74  BulgariaDecember 10, 1994

36 (source: 2011)

75  BahrainDecember 15, 1994

14 (source: 2010)

76  LatviaDecember 15, 1994

8 (source: January 2011) 

First outlet in the Baltics.

77  United Arab  December 

McDonald’s Enters Vietnam Page 24

Emirates 21, 1994

78  EstoniaApril 29, 1995

8 (source: 2011)

79  RomaniaJune 16, 1995

126 (source: 2010)

80  MaltaJuly 7, 1995

8 (7 in Malta, 1 in Gozo, source: 2009)

81  ColombiaJuly 14, 1995

Centro Andino, Bogota78 (source: November 2009)

82  SlovakiaOctober 14, 1995

25 (source: 2011)

83  South AfricaNovember 11, 1995

129 (source: 2009)

84  QatarDecember 13, 1995

7 (source: 2003)

85  HondurasDecember 14, 1995

86  Saint MartinDecember 15, 1995

87  CroatiaFebruary 2, 1996

Zagreb19 (18 opened, 1 opening) (source: 2011) 

88 Western 

SamoaMarch 2, 1996

89  Fiji IslandsMay 1, 1996

3 (source: 2001)

90  LiechtensteinMay 3, 1996

2 (source: 2009)

McDonald’s Enters Vietnam Page 25

91  LithuaniaMay 31, 1996

9 (source: 2011)

92  CyprusJune 12, 1996

13 (source: 2004)

93  IndiaOctober 13, 1996[18]

Delhi192 (source: 2010) 

94  PeruOctober 18, 1996

22 (source: 2009)

95  JordanNovember 7, 1996

96  ParaguayNovember 21, 1996

6 (source: 2009)

97 Dominican 

RepublicNovember 30, 1996

98 French 

PolynesiaDecember 10, 1996

Tahiti

99  BelarusDecember 10, 1996

Minsk 6 (source: 2011)

The company claimed this as McDonald's "100th country" although this calculation included many non-sovereign territories even though McDonald's shut down in Iceland in 2009 it is the 99th country as of November 1, 2009.

100  UkraineMay 28, 1997

Kiev 72 (source: 2011)

101  YemenAugust 22, 1997

102 Republic of 

MacedoniaSeptember 6, 1997

6 (source: 2010)

McDonald’s Enters Vietnam Page 26

103  EcuadorOctober 9, 1997

10 (source: 2007)

104  RéunionDecember 14, 1997

105  Isle of ManDecember 15, 1997

106  SurinameDecember 18, 1997

2 (source: 2010)

107  MoldovaApril 30, 1998

108  NicaraguaJuly 11, 1998

6 (source: June 2010)

McDonald's outlets ceased operation during the Nicaraguan civil war and re-established a presence in 1998 after an absence of two decades.

109  LebanonSeptember 18, 1998

110  PakistanSeptember 19, 1998

25 (source: 2005)

111  Sri LankaOctober 16, 1998

112  San MarinoJuly 6, 1999

Borgo Maggiore. 1 (source: 2010)

113  GibraltarAugust 13, 1999

114  AzerbaijanNovember 6, 1999

Baku 7 (source: 2011)

115 French 

GuianaFebruary 22, 2000

McDonald’s Enters Vietnam Page 27

116 American 

SamoaSeptember 29, 2000

117  MauritiusJuly 4, 2001

Port Louis 2 (source: 2011) 

118  MayotteMay 1, 2003

120  MontenegroJune 1, 2004

Budva 1 (source: 2006)

A McDonalds restaurant was opened in Budva in 2004,but it has been closed in 2007 due to the lack of location.

121  IraqAugust 10, 2006

Baghdad 1 (source: 2006)

One location in Baghdad for the U.S. Army, but there is also a knockoff called MaDonal.

122 Bosnia and 

HerzegovinaJuly 20, 2011[21]

Sarajevo 2 (source: 2011)

After 10 some years of trying to enter the Bosnian market with no success, McDonald's opened its first restaurant in BiH on 07/20/2011. Days later construction started on the first drive-thru, while ongoing planning is wrapping up for outlets in Banja Luka and Mostar.

123 Trinidad & 

TobagoAugust 2011

Westmoorings, Port of Spain 1 (source: 2011)

Currently slated to re-open at The Falls At West Mall. McDonald's previously had stores in Trinidad (May 6 1997 - October 25 2003) but closed due to low sales.

Source: www.wikipedia.com

Exhibit III

McDonald’s Enters Vietnam Page 28

The Food of Vietnam - Vietnamese FoodIncreasingly famous worldwide with restaurants sprawled over the globe, yet no Vietnamese food abroad can equal in flavor or quality to that made in Vietnam itself. In brief, Vietnamese cuisine depends heavily on rice grown in water paddies throughout the country, with dishes varying from simple everyday meals to most complex dishes designed for the King. Reaching a balance between fresh herbs and meats; as well as a selective use of spices to reach a fine taste, Vietnamese food can be considered one of the healthiest yet most divine cuisines worldwide.

Spices and ingredients

Vietnam’s ingredients reflect its geography and climate. Rice (grown in water paddies throughout the country) is the main starch used in everyday meals, and is also made into different kind of cakes and noodles. Besides a number of Buddhist vegetarian dishes, most Vietnamese dishes or meals are a combination of a variety of vegetables, herbs and meats.

Common herbs may include lemon grass, lime or kaffir. Popular meats are pork, beef, chicken, prawn and various fish. Lamb, duck, birds, and even dog or other wild animals are also used but not widely. Fish sauce and soy sauce are used as both flavorings and dipping sauces for nearly every dish.

Peanuts are also used widely in Vietnamese cuisine.

Vegetarians and those with allergies should be careful and ask beforehand while enjoying Vietnamese cuisine.

Style of cooking

The Vietnamese cook their food in a variety of ways: deep fry, stir fry, boil, steam. Unlike the Chinese, the Vietnamese use a minimal amount of oil while cooking. Vietnamese cooks aim to preserve the freshness and natural taste of food as much as possible. Hence Vietnamese cuisine is often considered as one of the healthiest foods in the world.

McDonald’s Enters Vietnam Page 29

Food of three regions

Like everything else, Vietnamese food also differs geographically from location to location. North Vietnam’s food uses soy sauce, fish sauce and prawn sauce and has many stir fried dishes.

With harsh weather and less developed agriculture than the South, North Vietnamese tend to use less meat, fish and vegetables; and black pepper (instead of chili) to create spice. The taste is strict and less sweet, but more salty than in other regions.

Central Vietnam is distinct in its extreme spices and color of food. Hue’s cuisine, affected by royal cuisine once created for kings and queens, emphasized on quality and quantity – A meal constitutes of many complex dishes served only at small proportions.

Southern Vietnamese are heavily affected by Cambodia, Thai and Chinese cuisines (due to trade and immigrants). Southerners prefer sweet tastes (created by adding sugar or coconut milk) and spicy tastes (created by chili peppers).

A variety of dried fish and sauces originate from the South. Southerners prefer seafood and use simple cooking methods with larger and less servings.

Customs

Influenced by the Chinese, chopsticks and spoons are used in Vietnam. Many foods (such as cakes) are wrapped in banana or coconut leaves. When eating with elders, younger Vietnamese always ask the elders to eat first.

A typical family meal

A typical Vietnamese meal (lunch or dinner) will include steamed rice; a soup dish to eat with rice, a meat or fish dish and a vegetarian dish (either stir fried or boiled).

Vietnamese do not eat in separate servings, but the food is placed in the middle. Each member of the family has a

McDonald’s Enters Vietnam Page 30

small bowl and chopsticks with which they take food from the table throughout the meal.

Vietnamese noodles and cakes

Besides the typical meal with rice, Vietnamese cuisine has many different types of noodles and cakes (mostly made from rice). To name a few: beef soup noodles (pho), crab noodle (bun rieu), spring rolls (nem), sticky rice cake (chung cake)

Source: www.guidevietnam.com

McDonald’s Enters Vietnam Page 31

References

Hill, W.L. (2011). International business: competing in the global marketplace, 8th edn,

McGraw-Hill companies

Daniels, J. and Radebaugh, L. (1998) International Business: Environments and

Operations, 8th edn, Reading, MA: Addison-Wesley.

Porter, M.E. (1985) Competitive Advantage, New York: The Free Press.

Vignali, C. (2001) ‘McDonald’s: “think global, act local” – the marketing mix’, British

Food Journal, Vol. 103, No. 2, pp.97–111.

Porter, M.E. (1980) Competitive Strategy, Techniques for Analysing Industries and

Competitors, New York: Free Press.

Whalen, J. (1995) ‘McDonald’s cooks worldwide growth’, Advertising Age International,

July/August, p.5.

http://en.wikipedia.org/wiki/List_of_countries_with_McDonald's_franchises. Accessed

Oct. 2, 2011

http://www.doingbusiness.org/data/exploreeconomies/vietnam/. Accessed Sept. 20,

2011.

http://news.vneconomy.vn/2010041603283251P0C1/for-your-dining-pleasure.htm

http://www.guidevietnam.com/travel/vietnamese-food-cuisine.html. Accessed Oct.3

2011

http://vietnambusiness.asia/112000-cars-sold-in-2010-down-6/ Accessed Sept 30, 2011

http://www.guidevietnam.com/travel/vietnamese-food-cuisine.html. Accessed Sept 30,

2011

http://www.business-in-asia.com/vn_automobile_industry.htm. Accessed Sept 30, 2011

http://www.eoincostello.ie/pdf_doc/

Global_Marketing_and_Competitiveness_Assignment.pd0f. Accessed Sept 23, 2011

“McDonald’s Grows with the Country,” www.en.ce.cn, October 2, 2011

Annual Reports, McDonald’s

www.mcdonald’s.com

McDonald’s Enters Vietnam Page 32