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MGT 496

INDEPENDENT STUDY

ANALYSIS OF COCA-COLA, APPLE & MCDONALDS

INA JANI

IntroductionMy paper will be looking at three different companies: Coca-Cola, Apple and McDonalds. The analysis will cover information on the history and start-up of the companies, marketing strategies, globalization, and the various obstacles companies face, especially ones of these magnitudes. Coca-Cola

The Coca-Cola Company is one of the most internationally known companies inn existence. In addition, the company continues to expand and grow throughout the world without showing much sign of stopping. Coca-Cola knows how and where to capitalize in the continuously developing beverage industry. Coca-Cola currently ranks as the largest beverage company in the world operating in over 200 countries and maintaining over 84,000 suppliers. From this success, over 70% of Coca Colas companys income is generated from sources outside of the U.S. This is where the companys globalization aspect comes into play along with operating in over 200 counties. While globalization, if done right, can be extremely lucrative for a company such as Coca-Cola, it comes with its advantages and disadvantages. These pros and cons will be observed in depth in order to better understand the effects globalization has on the company, the countries they are expanding into, and the local regions of the brand. Lets begin from the beginning of Coca-Colas journey into globalization. Coca-Cola was founded in the 1886 and was developed by John Pemberton. During this time, stores were in demand of pre-packaged products with brand name recognition. Coca-Colas approach to this demand was providing a new iconic red and white logo and also providing brand marketing to ensure confidence in customers that the Coca-Cola product would taste the same no matter where it was being purchased. This allowed the Coca-Cola Company to build a reputation of quality and consistency. These key strategies became the foundation for Cokes plan for global expansion. Coca-Colas global expansion began in the 1900s. The U.S. military spread to the regions of Cuba and Panama causing a rise in demand for Coca-Cola products. This led to bottling plants being built in these two regions. These plants showed to be successful as they reduced shipping and delivery costs. Soon after the display of success in Cuba and Panama, further bottling plants opened in Hawaii, Puerto Rico, and the Philippines. Preceding these efforts, Coca-Cola began testing in foreign markets for future expansion opportunities. By 1926, Coca-Cola had established foreign relationships and plants around the world, which furthered the companys opportunities to continue its journey of globalizing and mass-producing around the world. Coca-Colas growth continued for the next several decades. Local branches and partnerships that were distributing Coca-Cola products were established throughout the world. After the conclusion of World War II and the Cold War, Coca-Cola had become true global corporation known for efficiency and worldwide capabilities.Delving into more detail about the companys globalization, there are various major factors that can affect a company when globalizing: political, economic, social are the ones I will be focusing on. Lets begin with political: political changes have to do with government regulations and policies on how a company should be operating as well as setting certain standards that the product should meet. This allows the government to intervene if these standards are not being met. There are many policies and regulations the government can put into place regarding globalizing. An example is monetary policy, which can be defined as the actions of a central bank, currency board, or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates. The Coca-Cola company is not exempt from the monetary policy and abides by the three tools that the Federal Reserve Bank uses to control monetary policy: the discount rate, open markets operations, and the reserve ration requirement. Trade restrictions/barriers: A government imposed restriction on the free international exchange of goods or services. While this is not as common, it is still present with the Coca-Cola Company. Only banned from two nations: Cuba and North Korea. Environmental policy: refers to the commitment of an organization to the laws, regulations, and other policy mechanisms concerning environmental issues. According to the Hellenic Bottling Company, which is one of the largest bottlers of non-alcoholic beverages in Europe, operating in 28 countries in three continents with a total population of 589 million people. According to the bottling company, In 2014, they invested more than 5.8 million euro in different water saving programs in more than 20 countries, which lead to more than 1.1 million cubic meters water saving. As far as packaging and recycling, in 2013 they developed the lightest and most environmentally friendly can in the world through our partnership with Ball Packaging Europe. PET lightweight initiatives allowed us to save 1,963 tons of material.Other aspects the Coca-Cola Company has to consider includes having their products ingredients monitored by the FDA (Food and Drug Administration). There is also income tax, import/export regulations and possibility of political crisis. A nation dealing with any form of political crisis, such as protest or an extremely high loss of employment, would greatly reduce the demand for Coca-Cola products. Economic factors: Economic factors can be used to help a company predict what future decisions to make regarding expansion, where to move their products to next, where their products are not doing as well, and many other factors. Some economic factors a company looks into include: interest rate, standard of living (level of wealth, material goods, and necessities available to certain socioeconomic class in various geographic areas), exchange rate: The price of a nations currency in terms of another currency, unemployment rate and the overall economic growth in the nation. When looking at a countrys economic growth, a company may look into the countrys purchasing power. Purchasing power is the value of a currency in terms of the amount of goods or services that one unit of money can buy. Purchasing power is closely related and affected by inflation. If a countrys currency experiences excessive inflation, the purchasing power decreases while cost of living and interest rates rise. This can contribute to an economic crisis. Social: Social factors in my opinion are the most complex. They involve culture, traditions, and various views on health, family values, education, safety, population growth and so on. What makes this factor so complex is that it varies heavily from nation to nation. One of the main issues Coca-Cola has faced when it comes to the social factors of expanding is the health-related issues facing Coke. Coca-Colas issues begin with certain countries banning their products due to their unhealthy benefits that can contribute to obesity and many other diseases affecting ones health. Currently, there are only two countries in which Coca-Cola cannot be bought or sold and they are Cuba and North Korea. Up until a few years ago, Myanmar was also a country that banned coke products. Additionally, in 2009 Venezuela banned Coke Zero, a no-calorie version of classic coke, due to its use of artificial sweeteners, which are believed to be harmful to health. While this may not seem like a big enough issue to affect Cokes globalization processes, it does not give the company a good name if certain countries find the product so detrimental they believe banning it is a necessity. Lets take a look at some of the health risks of coke. A study was done to show the effects drinking a coke has on ones body within an hour. Within the first ten minutes, your system is hit with ten teaspoons of sugar, which is 100 percent of the recommended daily intake. After 20 minutes, blood sugar surges and the liver responds to the subsequent insulin spurt by turning the copious amounts of sugar into fat. After 40 minutes the caffeine absorption is complete. Pupils dilate, blood pressure rises, and the livers deposits more sugar into the bloodstream. At 45 minutes, the body increases dopamine production, which is a stimulant to the pleasure centers of the brain. This stimulant response has also been said to be physically identical response to that of heroin. And finally after an hour of consuming the coke you will begin to have a sugar crash which is fatigue after consuming a large amount of carbohydrates. The major components of Coke are what lead to these unappealing affects. Phosphoric acid can interfere with the bodys ability to use calcium, which can lead to osteoporosis and/or softening of the teeth and bones. Sugar increases insulin levels, which can lead to high blood pressure, high cholesterol, heart disease, diabetes, weight gain, premature aging, and other negative side effects. Aspartame is the chemical that is used in diet sodas as a sugar substitute. This chemical has been associated to over 92 different health side effects that are associated with brain tumors, birth defects, diabetes, emotional disorders, and epilepsy. Caffeine can cause jitters, insomnia, high blood pressure, irregular heartbeat, elevated blood cholesterol levels, vitamin and mineral depletion, and other negative side effects. Clearly, Coca-Cola has many negative health side effects working against them. Furthermore, society has been leaning more towards healthy choices in regards to food and exercise. Despite the negativity surrounding coke about its nutrition, it has still managed to become one of the most known brands globally. Lets take a look at how Coca-Cola achieved its success. One of Coca-Colas used strategies is so simple, yet so effective: the use of its timeless font. The logo that was decided to be used is Spenserian script because it would differentiate Coke from its competitors. The logo was standardized in 1923. While the packaging would be aloud to be adjusted with the changing times, the logo ,along with the recipe, were to remain unchanged. This resulted in a logo that has been around for over 100 years and is not imprinted into the minds of people around the world. Another tactical move made by the Coca-Cola Company was introducing the unique and distinct Coke glass bottle. The shape of the bottle was inspired by the cocoa pod due to its odd yet aesthetically-pleasing shape. The glass bottles were eventually replaced with plastic however the glass Coke bottle has become an iconic product. Additionally, Coca-Cola put a great deal of focus into maintaining a standard of excellence as the company grew. An example of this would be that the Coke team decided that its drink should be served at 36 degrees Fahrenheit and never above 40 degrees Fahrenheit. While this tactic may seem over the top, it set a standard for Coca-Cola products by establishing them as premium products that deserved more attention than its competitors. Coca-Cola is huge on advertising. One of the channels of advertising its uses, despite its negative health facts, is sports. Coca-Cola was the first commercial of the 1928 Olympic games in Amsterdam and has been a sponsor of the Olympic games ever since. Coca-Cola has also sponsored the FIFA World Cup, Major League Baseball, National Football League, and National Basketball Association. The company also uses star athletes in their advertisements. Due to its iconic branding, Coca-Cola has also become very apparent in mass media. It has been featured in countless movies and TV shows as well as had many celebrities endorse Coke over the years. Some of these celebrities include: Magic Johnson, Maroon 5, Ryan Seacrest, and Michelle Kwan. I would also like to touch on 4 other key factors that allowed Coca-Cola to achieve international success and recognition. The first is that the company managed to maintain a sense of simplicity. Regardless of having grown into a substantial global industry with numerous products, Coca-Cola remained in touch with its timeless and simple ideals. Through the decades and countless advertising campaigns, the company used lasting slogans such as Enjoy and Happiness as these simple messages have the ability to translate across the globe. The next factor is personalization. This is important to the company because despite their status as a global icon, Coca-Cola realizes the importance of finding a way to connect with consumers on a more personal level. The Share a Coke campaign initially started in Australia in 2011 and has now successfully expanded to over 50 countries. The campaign has removed the Coca-Cola logo and replaced it with the phrase, Share a Coke with. The campaign uses a list of the 250 most popular names of each county the campaign is active in and encourages consumers to find a bottle with their name on it and share a Coke with friends, family, and loved ones. Consumers with more uncommon names can even custom order a bottle with their name on it form the Coca-Cola website. Coca-Cola has also utilized one of the most current and fastest growing tools for effective global marketing: social media. Social media has become such a powerful tool because it gives companies the ability to reach consumers on a worldwide level through a single platform. The Share a Coke campaign was not only successful as a localization strategy but also allowed consumers to engage in their Coca-Cola experiences via social media. According to the Wall Street Journal, there were more than 125,000 posts about the campaign only one month after its United States launch. The final factor I will discuss about Coca-Colas success is the emphasis the company pus on brand over product. An example of the difference between product vs. brand would be that Coke uses the idea that its does not sell a drink, it sells happiness. Coca-Cola produces numerous different products with packaging designs that vary among different regions, to have a global marketing plan that focuses on the products rather than the brand would be challenging to oversee. This is why Coca-Cola instead focuses on the experience and overall lifestyle the company has associated with its brand. Vice president of marketing for Coca-Cola Israel stated, Though the products may vary, the experiences are selling- happiness, friendship- are universally shared and understood. The key takeaway from Coca-Colas successful global brand is the foundation of human connections. The company also remains innovative while remaining connected to its initial simple principals. Coca-Cola has created a brand that has lasted the test of time by incorporating these factors into its business strategy. These global marketing techniques have allowed Coca-Cola to remain an industry leader, even after 125 years of its formation.

AppleApple, Company History and Start-up: Apple Computers was founded on April 1, 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne whom were all college dropouts. Their vision was changing the way people viewed computers. Jobs and Wozniak wanted to create a more user-friendly computer that was small enough for people to fit in their homes. The Apple 1 was started up in Jobs garage and was originally sold without a monitor, keyboard, or casing. When the Apple 1 went on sale in July 1976, it was at a market price of $666.66. If inflation is factored in, the price in 2015 would be around $2,772. Apple became incorporated January 3, 1977. Founding member Ronald Wayne sold his share of the company back to Jobs and Wozniak for $800 prior to Apple becoming incorporated. Entrepreneur Mike Markkula provided Jobs and Wozniak funding of $250,000 along with crucial business expertise. During Apples first five years of operation, revenues were growing at an exponential rate. The rates were doubling every four months on average and from September 1977 to September 1980 yearly sales reportedly grew from $775,000 to $118 million. That is a phenomenal annual growth rate of 533%. The Apple II was introduced April 16, 1977. VisiCalc, which is a spreadsheet system, chose the Apple II to be the desktop platform for the application thus giving Apple II a business market and home users another reason to purchase Apple II. By the end of the 1970s, Apple had assembled a staff of computer designers as well as a production line. 1984 marked the introduction of the Macintosh. This was the first personal computer to be sold without a programming language. While Macintoshs initial sales were solid, the follow up sales were not as strong due to the high price and limited range of software titles. This turned around for Apple when the LaserWriter, the first PostScript laser printer that was sold at a reasonable price, was introduced. The Macintosh became powerful in the desktop publishing market due to its advanced graphics capabilities. A dispute over power issues broke out in 1985 between Jobs and CEO John Sculley who had been hired two years prior. The dispute came from the Apple board of directors who had directed Sculley to limit Jobs ability to launch pricey ventures into untested products. Jobs fired back by attempting to oust Sculley by calling a board meeting. However, this ended up backfiring for Jobs when the board of directors decided to side with Sculley. Jobs was removed from his managerial duties and ended up resigning from Apple the same year. Following Jobs departure, the Macintosh product line began to focus on higher price points. This policy was referred to as the high-right policy. Jobs had previously argued that Apple should produce products aimed at the consumer market. He suggested the price goal for the Macintosh to be set at $1,000, however the company was unable to meet this price point. The newer models were still selling at the higher price points and also offering higher profit margins. The policy began to backfire towards the end of the 1980s due to new DTP programs that offered some or almost all of the same functionality that the Macintosh offered but at a much lower price. Apple had not only lost its monopoly in this market but also alienated a large portion of its original customer base who could no longer afford the expensive prices. The 1989 Christmas season was the first in Apples history that saw a decline in sales, which led to a 20% drop in Apples stock price. Following these events taking place, Apple introduced three lower cost models: the Macintosh Classic, Macintosh LC, and Macintosh Ilsi which all encouraged substantial sales thanks to the pent up demand. The success of these lower-cost models led to a reduction of Apples higher priced models. In order to compensate for this, Apple began selling very similar machines at different price points that were aimed at different markets. This however only led to market confusion and consumers not being able to tell the difference between machines. In 1994 Apple teamed up with IBM and Motorola in hopes of creating a new computing platform. This would use IBM and Motorola hardware paired with Apples software. The expectations of this was that it would leave the PC out of date and contradict the powerful Microsoft Company. 1996 brought in a new CEO for Apple, Gil Amelio. Amerlio wasted no time making significant changes to Apple. These changes included vast layoffs and cutting costs. Amelio also decided to purchase the NeDT and its NeXTSTEP operating system after failed attempts at improving Mac OS. Another crucial change: bring Steve Jobs back to Apple. Company Return To Success: Jobs returned to Apple as an advisor in 1997 and Gil Amelio was ousted by the board of directors due to a three-year record low stock and financial losses. Jobs, who had discovered the design talent of Jonathan Ive, worked to reconstruct Apples product line and the companys status. At the Macworld Expo of 1997, Jobs announced that Apple would be joining forces with Microsoft to release new versions of Microsoft Office that could be used for Macintosh. On November 10, 1997, Apple introduced the Apple Online Store, which related to the new build-to-order manufacturing strategy. Apple was heading towards a positive turning point and to keep the momentum going on August 15, 1998, the company introduced the iMac. The iMac encompassed modern technology combined with a unique design and sold roughly 800,000 units in its first five months. On May 19, 2001, Apple opened its first Apple Retail Stores in California and Virginia. The same year, Apple introduced iPod, which is a portable digital audio player. The product was a phenomenon and sold over 100 million units the first six years. The success of the iPod led to the introduction of Apples iTunes store in 2003. The online store offered online music downloads for $0.99 per song in conjunction with the iPod, which the songs could be downloaded onto. The iTunes store was another huge success for Apple and became the market leader in services for online music. Jobs announced on June 6, 2005 at the Worldwide Developers Conference that Apple would begin producing Intel-based Mac computers in 2006. In January 2006, the new product MacBook Pro and iMac became Apples first computers that used Intels Core Duo CPU. August 2006 marked Apples transition to Intel chips for the entire Mac product line. Previous products from the line such as: the Power Mac, iBook, and PowerBook were replaced by: the Mac Pro, MacBook, and MacBook Pro. The companys stock price certainly reflected the current success. Apples stock price rose from $6/share to roughly $80/share. Despite this success, Apple still remained far behind competitors accounting for only 8% of laptops and desktops used in the United States. During Jobs keynote speech at the Macworld Expo on January 9, 2007, he announced that Apple Computer, Inc. would now be referred to as simply Apple Inc. because the company was to begin shifting focus to mobile devices as well. This event also marked the announcement of the iPhone and Apple TV. The following day, apple shares hit a high of $97.80. May of that same year the companys stock price surpassed the $100 mark. The App Store was launched in July 2008, which sold third party applications for the Apple products iPhone and iPod touch. Within the first month, the App Store sold 60 million applications and recorded a daily revenue of roughly $1 million. By October 2008, Apple had become the third-largest mobile handset supplier in the world thanks to the tremendous popularity of the iPhone. On top of the huge success of the iPhone, Apple also introduced the iPad, which launched on April 3, 2010 and sold 300,000 units on its first day. The companys wealth and power continued to grow with the continued introduction of new and innovative products however October 5, 2011 marked a sorrowful day for Apple as they announced that Steve Jobs had lost his battle with cancer and passed away. While this was a devastating blow for the company, they continued to prosper following Jobs death. Lets take a closer look at some of the products that Apple has provided us with.

Product Line (Most Popular): MacBook: Ultra-thin, ultra-portable notebook introduced 2006.MacBook Air: Even more thin than original MacBook, introduced 2008.MacBook Pro: Professional notebook with more capabilities than standard MacBook, launched 2006.iMac: All-in-one desktop computer, introduced in 1998. iPod Shuffle: Ultra-portable digital audio player available in a 2 GB model, introduced 2005.iPod Touch: Portable media player that runs on iOS and is available in 16, 32, 64, and 128 GB models, introduced in 2007. iPhone: A line of smartphones that run on the iOS mobile operating system. First generation iPhone released on June 29, 2007. Most recent models: iPhone 6s and 6s Plus. User interface built around the smartphones multi-touch screen, which includes a virtual keyboard, and countless applications that can be downloaded from the App Store. iPhone also includes Wi-Fi that can connect to cellular networks. Some of the other features and capabilities include: Take photos, shoot videos, play music, send/receive e-mail, surf internet, send texts, record notes, built-in calculator, GPS navigation, social networking, and many other features. iPad: Multi-touch tablet which allows user to access newspapers, eBooks, photos, videos, music, word documents, and most of the iPhone apps. Released January 27, 2010. Apple Watch: Most recent addition to product line, released April 24, 2015. Wearable device that consists of fitness tracking features and must be used in combination with iPhone (models past iPhone 5) to work.

Apple, Inc. Controversies, Strategies, and Globalization: Over the years Apple has become progressively more global. Originally, it geared its products towards educational and home use. The increase in its sales scope has led to a transition that consisted of being US central in manufacturing, assembly, and sales be evolving to a global usage of these elements. Apple now sources and assembles products abroad in locations such as China and markets their products to 140 countries. The usage of international part manufacturing and labor has given Apple the opportunity to put a greater focus on technological innovation and the ability to penetrate emerging economies as well as lower production costs. However, these opportunities and benefits do not come without risks. China has a huge role in Apples overseas manufacturing and assembly and there have been some concerning factors in both how Apple has been doing business in China as well as political and economic issues and the Chinese government. A big concern for Apple is Chinas increasing environmental problems. These issues have led to the possibility of the Chinese government placing restrictions and applying substantial monitoring to plants. Additionally, the Chinese government is arranging to increase the proportion of profits that state-owned companies must return to the treasury from the range of 5%-15% to 30% by the year 2020. The cost that Apples outsourcing partners acquire would be affected by this profit proportion change. There has also been an uproar in China regarding poor working conditions and human rights. Foxconn, a major Apple manufacturing supplier headquartered in Taiwan, has faced many controversies in relation to Apple. These controversies mainly revolve around how the employees in China are managed. BBC aired a documentary on December 17, 2014 about the working conditions of the manufacturing plants in China. This revealed that promises Apple made to protect the employees were regularly broken. Some of the working standards being violated included employee hours, ID cards, dormitories, work meetings, and juvenile workers. Apple was supposed to have implemented new standards in 2010 following the suicide of 14 Chinese workers at Foxconn which was blamed on poor working conditions and employee mistreatment. An undercover reporter who was making parts for Apple computers stated that they had to work 18 days without a day off with some shifts as long as 16 hours.. They also said, Even if I was hungry I wouldnt want to get up to eat. I just wanted to lie down and rest. I was unable to sleep at night because of the stress. While the attention being brought to this matter along with the possibility of improvements regarding labor conditions and human rights would benefit local employees, it would, sadly, challenge Apples reason for being in China in the first place. These human rights improvements would lead to an increase in outsourcing costs in the future and force Apple to consider if this endeavor will be worth it after an increase in all of the costs. Shifting gears towards Apples strategic factors used to achieve its global success. First up is Apples use of cost leadership. Cost leadership is a concept developed by Michael Porter that can give a company a competitive edge and can be used as a tool to generate profit. Simply put, cost leadership is the lowest cost of operation in the industry. Apples cost leadership is achieved by low cost inputs that produce the cheapest but high quality products possible. Apple has also developed established business agreements with companies, which allows them to focus on solutions to problems and innovative products. An example of Apples cost leadership is the companys iTunes store. This application allows the company to distribute music digitally without the cost of a compact disk/CD. This strategy has transformed how consumers get not only music, but videos, games and other media as well and at a low price. The next factor to focus on is how Apple uses the differentiation strategy. To start off, Apple manufactures computers from the same company, which is responsible for operating, and hardware in which it runs unlike competitor Microsoft which uses many different manufacturers. By using this stratagem, Apple can control all of the components that are included in their computers. It also minimizes technical issues because the hardware and software are only intended to be used on Apple operating systems. Apples differentiation strategy is also focused on putting their focus on design quality. Apples strong reputation was built on high quality design in personal computer history. Apple is the only manufacturer of computers to establish physical stores around the world and their products in these stores are stylish yet simple setting. Customers experience service that is superior to other computer stores. The stores include a genius bar used for technical support, daily workshops, one-on-one support, and even allows customers to test products before purchase. Apple differentiation strategy veers away from low cost computers and instead focuses on creating products that are innovative, high quality and user-friendly. When becoming a global company a key element the business must incorporate into their strategy is flexibility. There will be moments of uncertainty and the company needs to know how to function through the uncertainty. A time when Apple exemplified flexibility was when Apple decided to launch the iPad. There was a high level of uncertainty associated with the product. This required Apple to incorporate a sense of flexibility in their objectives. The iPad initially received negative feedback from critics calling it a giant iPhone and mixed reviews from the media. Many people thought the product would fail. Some of the factors Apple had to take into consideration upon launching the iPad included: price, user interface, software, and how to differentiate the iPad from not only other Apple products but also tablets of competitors. Apples flexibility and risk taking nature rewarded them with the release of the iPad. After its release in April 2010, the iPad sold 3 million units in 80 days and the majority of the products reviews have been positive. Apple strategically takes on low-risk as well as high-risk products. Low-risk includes updated versions of the iPod, MacBook, etc. while high-risk includes introducing new products that offer more opportunity for growth such as the iPad and Apple TV. The iPad brought a new competitive advantage to the company as it offers a new way to expose yourself to books, games, Internet and applications as well as relating to the differentiation strategy which includes creating new and innovative products. When it comes to Apples corporate strategy, close-related diversification strategies are put to use. Right before Apple launched the iPod in 2001, the company was primarily known for its software and computer technology. However, the introduction of the iPod followed by the iTunes Music store led to the capability for Apple to breakthrough into the digital music market. Due to Apples high level of integration between its personal entertainment and computer products, it has been able to utilize economies of scope. This allows Apple to reduce its operating costs, which leads to higher margins for the company and lower prices to the consumers. The era of technology is one that is always evolving and Apple uses diversification to understand more about what consumers are looking for. By using diversification, Apple has been able to create high quality and well-designed products that not only impress consumers but also assist in everyday work and life in general. Apples diversification success from products such as iPods, iTunes, and iPads has also increased sales of the Mac computers. This is due to Apples use of close integration between the products and the key element of creating products that can be easily managed because they run on the same operating system. Apples biggest diversification move has been that one into the mobile communication industry. The company revolutionized the term, smart-phone. Prior to the iPhone, consumers would typically refer to their phones by service provider name or generalize the phone into the category such as Motorola. Now the vast majority carries iPhones and refers to the actual phone, not the provider. The way Apple manages its operations also plays a role in their diversification. The company follows an M-form functional structure. The M-form is an organizational structure in which the company is separated into several semi-autonomous sections, which are guided and controlled by targets from the center. Under CEO Steve Jobs, there are ten senior Vice Presidents for the various units of the company such as engineering, software, product marketing, and so on. So ultimately, the management duties are split up however they report to the few at the top. Apples executives also meet daily to discuss everything from current goals and projects to market changes and the companys direction. Apple is a highly collaborative company that is good at deciding how to divide tasks amongst the various teams and promotes communication between them. Apple has incorporated strategic alliances since the beginning of its existence. These alliances are used for a variety of reasons including: economies of scale, learning from competitors, and managing risk and shared costs. A notable alliance of Apple is that of AT&T in the production and launching of the iPhone. Apple had to rely on AT&T to not share Apples key technologies with other mobile manufacturers while AT&T had to rely on Apple that once the iPhone was created, it would not deactivate the alliance and launch the iPhone with another mobile company. Another crucial alliance of Apple was Microsoft. This allowance had Microsoft agree to develop the Microsoft Office software for the Mac in return for Apple bundling Internet Explorer in all of its computers. This was huge for Apple because many consumers stayed away from Apples computers due to the fact that it could not run Windows. In 2004, HP and Apple developed a strategic alliance to deliver an HP-branded digital music player based on Apples iPod and iTunes music player store to HPs customers. This alliance had Apples iTunes software preinstalled on all HP PCs and notebooks. Apples goal was to have an easy-reference desktop icon that would point consumers directly to iTunes music software while also offering a user-friendly music experience. Additionally, Apple wanted to get its iPod and iTunes reached out to as many music lovers as possible and teaming up with another innovative company helped them to achieve this. When it comes to Apples international strategy, they follow a global strategy of standardization of their products. The only modification is the power source due to the varying power voltages in different countries. Apple achieves this by having its engineering, designing, and manufacturing controlled by one source which also differentiates the company from other computer makers. A multi-domestic strategy could lead to excess overhead and managements loss of control over the company. Apple is known for its innovation not only in their products but strategic management and marketing as well. I believe this company will continue to grow and be prosperous despite the obstacles that may come its way.

McDonaldsThe world recognized McDonalds brand was founded in May of 1940 by brothers Richard and Maurice McDonald. They originally opened a BBQ style restaurant but soon realized that the majority of the products were coming from selling hamburgers. They re-did their menu, which now included only hamburgers, cheeseburgers, French fries, shakes, soft drinks and apple pie. The previous BBQ restaurant also included carhops, which were removed in order to make McDonalds a self-serve establishment. The McDonald brothers set up their kitchen to resemble the style of an assembly line in order to provide maximum efficiency. The brothers wanted to further expand their restaurant by finding a new building in order to obtain a more aesthetically appealing look and to further improve efficiency. They worked with architect Stanley Clark Meston to create the new building, which included red and white ceramic tile, stainless steel and the famous neon, yellow golden arches. In late 1952, the brothers began looking for franchisees. Ray Kroc, who sold the milkshake machines used in McDonalds San Bernardino restaurant, saw the potential of the brand. He recommended that the brothers franchise their restaurants nationally. Kroc also offered to take the majority of the responsibility for setting up the new franchises and offered the brothers half of one percent of the gross sales. Kroc opened the first McDonalds Systems, Inc., now McDonalds corporation, restaurant in Des Plaines, Illinois.Expansion Overview: After getting the Des Plaines location up and running, Kroc continued to look to expand the brand. He did this by continuing to seek franchisees for the chain. By 1959, Kroc had opened 68 new restaurants in 102 locations. In the early 1960s Kroc began investing in advertising for the McDonalds Corporation. The advertising campaign, Look for the Golden Arches increased sales and Kroc believed that money invested in advertising would back itself back many times over. Ronald McDonald was introduced in 1963 and was designed to appeal to children. Kroc noticed that the growth in U.S. automobile use that came with suburbanization heavily contributed to McDonalds growth. He decided to buyout the McDonald brothers for $2.7 million dollars with the hopes of making McDonalds the largest and most successful fast-food chain in the nation. The corporation went public in 1965 with common shares going for $22.50 per share. The price rose to $30 per share by the end of the first days trading. McDonalds utilized effective marketing skills to surge the brand into explosive success and was able to be flexible in terms of customer demand. An example of the quick response to customer demand would be when Kroc noticed burger sales dropped in Catholic neighborhoods on Fridays during Lent, he introduced the Filet-O-Fish sandwich. This was quite the innovative move back in the 1960s as various restaurants to this day provide fish frys on Fridays during Lent. By 1968, McDonalds had opened its 1,000th restaurant. Fred L. Turner had now become McDonalds president and chief administrative officer while Kroc had become the chairman and remained CEO of the company until 1973. The 1970s provided even more growth for McDonalds as society was even more on the go and valued the quick service McDonalds provided. By 1976, McDonalds had served an astounding 20 billion hamburgers and sales exceeded $3 billion. The next major move the company contrived was introducing breakfast to the menu. They started out by selling the Egg McMuffin and after a positive consumer response, added a full breakfast menu. In order to speed up their service time even more, McDonalds introduced the drive-thru in 1975, a concept that fellow fast-food company Wendys had gotten a jump-start on. This was an enormous step for the company because drive-thru sales eventually accounted for half of McDonalds sales. The 1980s were a period of considerable expansion for McDonalds. The company played it smart by continuing to diversify and adjust its menu with the changing consumer preferences. The McChicken was introduced in 1980, however the sales for this product were not up to par. The sandwich was replaced by the now famous Chicken McNuggets a year later. The McNuggets became so popular that demand exceeded supply. The solution to the supply issue was making the McNuggets available nationwide. Shortly after this move, McDonalds became the second largest retailer of chicken in the world. 1985 included the addition of salads as a more health conscious option. McDonalds efficiency and expanded menu continued to lure customers. With the continued success, McDonalds set its sights to expand to more urban areas and even launched new architectural styles in order to associate its brand more effectively to city settings. Competition: By the late 1970s/early 1980s Competitors Burger King and Wendys stepped up their advertising game during a period of time dubbed the Burger Wars. This was a time where the fast-food industry was hot and companies were fiercely battling for market share. This time period consisted of aggressive advertising and price slashing in order to reach that top spot and have the number one sales. McDonalds sales and market, however, remained the highest and most powerful. Some other competitors of McDonalds include: KFC, Starbucks, and Pizza Hut. Through market research and surveys, McDonalds was able to discover that speed was a top priority for customers. Because of this, McDonalds vision objective is to provide fast, friendly and accurate service. To accomplish the fastest speeds possible, McDonalds focuses on specific targets that measure the performance of speed. These targets include utilizing proven, standardized training processes for its employees and new drive-thru layouts to reduce service times. Cost is the next factor of McDonalds competition bases. In order for McDonalds to have the ability to offer quality products at low cost, efficient processes throughout the organization is required. This is also included in the companys vision statement as: We will be the most efficient provider so that we can be the best value to the most people. McDonalds possess a few different strategies to provide this value to its customers. One of the most popular strategies that have been used by the company for years is the value meal. This offer allows the customer to buy a sandwich, French fries, and drink at a discount when purchased together. McDonalds restaurants offer a range from seven to twelve value meals for both breakfast and lunch. McDonalds made an addition to the value meal, which offers individual items costing $1: The Dollar Menu. After proving to be successful by first being tested in southern California, the dollar menu has since been added to the individual stores. The third focus of McDonalds competitive base is nutrition. The company recognizes that the health trend is increasing therefore the organization has put a tremendous focus on promoting new nutritious choices. McDonalds in the United States have recently been offering Go-Active meals, which include a salad, bottled water, and step-o-meter that tracks the amount of steps taken per day. McDonalds in the United Kingdom offer fresh fruit bags that contain apples and grapes as an alternative to fries. McDonalds also established a Global Advisory Council on balanced lifestyles. The council is made up of exercise and obesity specialists, environmentalists, and other healthy lifestyle professionals in order to ensure that the organization takes necessary steps in helping its customers attain optimal health. Another factor that helps with the companys competition is technology. Besides using technology for needs such as service tills, stock control, training, research, and administration/office work, McDonalds has introduced yet another use for technology: customization. This is a fairly new endeavor and is currently being tested in the U.S. market. Essentially, McDonalds has placed interactive kiosks in select U.S. locations. These kiosks allow customers to customize their orders and have them brought to their tables. McDonalds would like to expand the kiosks entitled: Create Your Taste to about 2,000 U.S. restaurants by the end of 2015. However, the customized orders are not yet available for drive-thru, only currently available for dine-in and takeout customers. McDonalds has also been experimenting with mobile ordering and is one of the first companys to sign up for Apple Pay. Along with this, McDonalds has updated their website by allowing the user to select any combination of menu items, place items in the online bag, and carry out a nutritional analysis on the selections. Globalization & Marketing/Business Strategies: 1967 marked the first McDonalds outside of the U.S. and was located in British Columbia, Canada. By the early 1990s, McDonalds was established in 58 foreign countries and was operating more than 3,600 restaurants outside of the United States. These restaurants were operated by either being wholly owned subsidiaries: a company that is completely owned by another company called the parent company or holding company. The parent company holds all of the subsidiarys common stock. Joint ventures: a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. Franchise agreements: A legal contract in which a well established business consents to provide its brand, operational model, and required support to another party for them to set up and run a similar business in exchange for a fee and some share of the income generated. The franchise agreement will lay out the details of what duties each party needs to perform and what compensation they can expect. McDonalds franchises account for 85% of operating McDonalds. In order to uphold to the standards of McDonalds, the company follows all framework of training and monitoring of its franchises to ensure quality, service, cleanliness, and value for the money offered by the company to its customers. The companys strongest foreign markets were in the following nations: Japan, Canada, Germany, Great Britain, Australia, and France. McDonalds was able to successfully penetrate these vastly different markets. This has almost everything to do with its marketing strategies and adjusting to the different consumer preferences. The two main questions of the strategic market segmentation are: What are the wants/needs, and tastes of the customers? Is the marketing up to date, reflecting the changing needs and demands? It is pretty obvious that various countries around the world do not eat the exact same food that is consumed in the United States. McDonalds accommodates and capitalizes on this fact. Some examples include the McArabia offered in the Middle East (grilled chicken and Arabic bread), McShawarmas offered in Israel (Kosher meat) McPork offered in Japan (Sausage Patty, lettuce, sweet & sour sauce.) Croque McDo offered in France (Ham and cheese on toasted sweet bread.) This not only allows McDonalds company to diversify their brand, but also gears each global endeavor towards the varied consumer preferences and allows for accommodating to the various tastes from country to country. Among all of these accommodations, McDonalds stresses the importance of keeping its brand recognizable. It is crucial for the company to retain its original meaning and identity while tailoring and experimenting with its international menu items. This way the McDonalds brand is still the main focus, versus the unique menu items taking away attention from the company as a whole. The McDonalds organization understands that just the brand name isnt enough to keep moving forward in the global marketplace. They execute certain strategies that keep the company progressing onward. One of the main strategies when it comes to expanding is focusing on emerging markets. In addition to markets in China and India, some African nations have also seen the golden arches emerging in their area. China is still McDonalds most vital international front in which it remains in high competition with Yum brands. McCafe has been an effective asset for the company, shattering expectations since its launch in 2002. The menu for McCafe also keeps growing and even adding on non-caffeine drinks such as smoothies, which adds to the health improvement side of McDonalds. While not as common in the United States, McDonalds delivers food in many markets around the world. In locations such as Asia and the Middle East, it is common for even high-end restaurants to deliver food. Therefore, McDonalds is adapting in order to meet the cultural norms of its surroundings. The brand has also been improving the appearance of its stores in order to make it more appealing to its customers. McDonalds has been trying out the less is more style concept in their China restaurants, which includes softer colors and cushioned seats. The vast majority of McDonalds stores have extended their hours, some even being open 24/7, and free Wi-Fi is available in McDonalds restaurants across the world. McDonalds has experimented with shorter menu cycles. For example, the McRibs second national appearance in two years increased same store sales up 4.9%. Along with the McRib are special edition McFlurries, and limited time shakes such as the Shamrock shake. McDonalds keeps an eye on international products that do extremely well and experiment with how they would do in different regions. For example Australias Chicken McBites are being tested in Detroit, to see if the success of the menu item will transpire through to the American market. McDonalds 7 Ps of Marketing: Product: McDonalds priority is to offer a standardized service worldwide. However, the company does allow franchisees some local control and creativity as long as the service offered is of a high standard. Some of McDonalds most well known products such as: the Fillet O Fish, Egg McMuffin, and Big Mac were created through franchisee innovation. The way it works is that franchisees are given independence to adapt the products while the corporation maintains a high degree of standardization through quality control. The vast majority of well-known products are usually offered in all markets unless they do suit the local customs and/or interfere with religious beliefs. An example would be that Big Macs are not served in the Indian market due to the majority of the population is Hindu and do not eat beef. However, sometimes the famous menu items will be adjusted in correspondence with the local taste such as serving spicier foods in most Asian countries. This allows the company to overcome a variety of cross-cultural barriers. Price: McDonalds has made itself known as a fast-food restaurant offering low price food and drink. The affordable menu has been implemented worldwide while still maintaining the base goal of quality assurance. Ongoing experimenting and innovation has allowed new price strategies such as the Dollar Menu or Saver Menu as known in the United Kingdom. McDonalds responded to increasing food costs by opting to increase prices by less than 1%. This way they can adopt to change to the menu gradually in order to retain price-sensitive customers. Place: While McDonalds product offerings differ between countries, they operate a standardized global supply chain. The lean operation is 100% outsourced with no back-up system. The chain is made up of two tiers. Tier 2 suppliers are mainly food producers and Tier 1 suppliers are processors. An example of how this works would be Tier 2 is a potato farm supplier while Tier 1 is a processing supplier who turns the potatoes into French fries. When it comes to their produce, it is transported to distribution centers before allocation and delivery to individual stores. McDonalds outsources non-core activities to expert firms, which has proven to be successful for their supply chain. The supplier terms for McDonalds are demanding; suppliers are expected to be held accountable until the food product is consumed and the customer is happy. McDonalds does not use legally signed contracts and instead makes deals on a handshake. This is done because the corporation operates on a one supplier-one product policy and maintains long-term relationships regardless of the outside environmental conditions. McDonalds has 30-35 stock-keeping units at the supply side, which creates a streamlined operation. Sole distribution partners are held accountable for the whole logistics process in designated geographical areas. This can include the daily hamburger order or a replacement appliance. In order to improve efficiency, McDonalds continually examines these partners to make sure they are meeting the goals and standards. The pull-strategy allows individual restaurants to place orders with the distribution centers that then re-issue the orders to suppliers who can then only produce the quantities ordered. This enables suppliers to hold a small amount of surplus stock, which optimizes efficiency. Promotion: McDonalds is big on this topic. This is a major factor in how the company reached such a high global recognition status. McDonalds Golden Arches have become iconic. The 2003 Im lovin it campaign used they key tactic of celebrity endorsement to appeal to younger consumers. Justin Timberlakes vocals were used to launch the campaign in 86 English-speaking countries and was also translated for non-English speaking countries as well to have an even larger outreach. More recently, McDonalds even launched a what were made of campaign to fight back against negative P.R. regarding the ingredients the company uses for their products. People: McDonalds takes their service employees very seriously as an aspect to the companys success as they represent the brand directly when a customer enters a store. They want the staff to give a good impression and in order to achieve this, sufficient training is highly important. Training includes: thorough on-the-job training in customer service, food handling, and preparation. In addition to this, McDonalds also offers a training facility entitled the Hamburger University, which is typically attended, by managers and future franchisees. This allows them to sharpen their management skills and improve proficiency in McDonalds restaurant management. McDonalds goal with its employees is to create a lively working environment. When this environment is created, a chain effect ensues in which customers have a positive experience and are more likely to return. In order to re-create this effect in different markets, the recruitment and training processes are globally standardized. McDonalds is always looking for energetic employees who are team players and willing to be trained according to guidelines. Process: The rapid pace in which McDonalds prepares and serves food requires strict guidelines and regulations to be followed. McDonalds creates a sense of transparency by allowing customers to usually be able to see the kitchen while food is being prepared. For the company to maintain its grip as a market leader, a high degree of process standardization is a must to increase efficiency. This also helps ensure that they have high standards of hygiene and food safety in all restaurants. Physical Evidence: This is McDonalds final P of marketing and fundamentally means that they uphold a consistent look among their restaurants including the dcor and staff uniform. How the External Environment Effects McDonalds Marketing Plans: When a company becomes as large and globally known as McDonalds, many external environmental factors. To begin, lets discuss political and legal factors. The political environment is made up of factors that include but is not limited to: income tax policy, tariffs, business margins, safety, and schooling. While conducting business internationally a company may face countries with more powerful consumer protection laws that may associate greater costs if there is a violation in product quality or service through litigations and lawsuits. An example is a 2006 lawsuit against McDonalds stating that the company misinformed consumers about ingredients of their French fries and hash browns. The fries and hash browns are fried in oil that consists of 99% vegetable oil and 1% natural beef flavor. Casein, which is a dairy product, and wheat bran were partially used to make the beef flavor. However, before serving, McDonalds re-fried the fries and potatoes in 100% vegetable oil. The plaintiffs charge was that McDonalds deceived consumers by claiming that their fries and hash browns were gluten, dairy, and wheat free. These lawsuits however have a massive cost for paperwork, diagnosing customers, and legal fees which means that McDonalds as a provider is much more affected by these political, legal, and customer safety issues and will go to great lengths to prevent them as much as they can. The other side of the argument is that health experts blame McDonalds for contributing to health issues including diabetes, obesity, and heart attacks. Economic Factors: These include inflation, interest rates, and exchange rates. This is a huge factor when it comes to global expansion. Exchange rates affect the cost of exporting and the price of imports while the cost of capital typically alters with the movement of interest rates. A main specter to look into from an economic standpoint of expansion is the purchasing power of the consumers. While the higher purchasing power of Americans may consider McDonalds as a bargain, countries such as Pakistan consider it a luxury purchase and unaffordable to consume on a regular basis. If this continues, McDonalds profits will decline in the country. Social Factors: These factors include: career opportunity, population growth, culture, and health of population. To use Pakistan as an example once again, when McDonalds first expanded to this location, it was not very popular. As time passed, changes occurred in eating habits and lifestyle that made fast food more acceptable in the Pakistani culture. McDonalds also offers Halal food, which takes into consideration religious and cultural issues. McDonalds has also increased employment through joining with many ethnic groups and the alliance certification program with a cup of tea for everyone. In 1974, McDonalds established a charity house named Ronald McDonald House that has helped over 10 million people since its assimilation. Conclusion: McDonalds has become one of the most powerful companies in the world. It embraces globalization and knows how to conquer it. The company has not only been able to grow but also retain its growth. It is still continuing to explore even more growth opportunities. McDonalds strategic strategies, which are achieved by using ample research and development, have allowed the company to satisfy the tastes of various locals amongst the different countries it operates in. McDonalds differentiation strategy is to be diverse from its competitors such as adding something to their products that will provide a distinctive value to its customers. This is done through well-designed and managed pursuits that result in exceptional quality and high brand recognition.

ConclusionI would like to further analyze the three companies I have been discussing. Through my research I noticed some similarities and differences among the companies as far as the techniques that were used for company growth, marketing strategies, use of resources and other aspects. All three of these companies started out very small and grew into globally recognized brands thanks to key people who saw the potential these companies possessed. For McDonalds, it was Ray Kroc who bought out the McDonald brothers for $2.7 million with the hopes he would turn it into the largest and most successful fast-food chain in the nation. For Apple, it was innovative co-founder Steve Jobs. While Jobs had a turbulent relationship with the brand over the years, he played a crucial role in the success of Apple due to his understanding of consumer behavior and realization that in the technological world, simplicity is key. For Coca-Cola, it was founder and developer John Pemberton who started Coca-Colas success off with something as basic as providing a red and while logo that was simple, yet iconic and highly recognizable in the consumer world. The three companies all focused on a key aspect when globalizing: brand recognition. This is an important move especially when taking a product to another company where the consumer market may not be as familiar with your product line. Coke relied on its distinguishable red and while logo with signature font while McDonalds relied on its Golden Arches. Apple brand recognition was due to its distinct look of new wave technology that was sleek and modern, simple yet high-tech. McDonalds differs from Coca-Cola and Apple in a slight way when it comes to globalizing their products. While Coca-Cola and Apple focused on keeping their products the exact same in all countries, Apple made a slight change due to differences in electricity volts in varying countries. McDonalds, however, took a different approach. McDonalds researched what kinds of foods are consumed more in various countries they were expanding into and incorporated these items into their menu. So while you could still order famous items like the Big Mac, there were also other options depending on which country you were in. For example, if you happen to be in France, you can order a Croque McDo, which is Ham and Cheese on toasted sweet bread. I believe they made this move because they are a food company. While a certain form of technology and particular soft drink can be made universal, the vast differences in culture we have in our world make it very difficult to sell the exact menu items all across the globe. This is particularly due to the huge role food plays on culture. Some Religions practice not consuming certain foods and McDonalds was able to adapt to this such as selling McShawarmas, which is kosher meat, offered in Israel. By doing this, McDonalds increases the scope of people it can sell its products to. I also understand the logic being used by Coca-Cola and Apple by keeping their products uniform throughout the world. Because they sell a different line of products than McDonalds, it makes more sense for them to keep their products as uniform as possible when sold around the world. The elements that make up these two product lines do not interfere with the differences in culture and the company views their globalization as a way to unite by providing people all over the world with a Coca-Cola that tastes the same no matter where you buy it and an iPod that looks the same and functions the same in Australia as it would here in the U.S. Coke and McDonalds share similar issues regarding their products: nutrition. Cokes nutritional matters even have the product banned from Cuba and North Korea due to its high levels of sugar and caffeine. McDonalds nutritional issues revolve around issues with their consumption of their food leading to obesity. Both companies have taken moves in order to attempt to cancel out the negative image brought on because of the questionable nutritional values of their most popular products. McDonalds incorporated a new Go-Active addition to their menu, which offers salads, bottled water, and step counters to support a healthy lifestyle. Coca-Cola not only owns Coke, but a numerous amount of other brands that includes some healthier choices such as: Dasani, Simply Orange, and Vitamin Water. All three companies heavily rely on effective strategic marketing to set them apart from competitors. McDonalds and Coca-Cola heavily use campaigns such as McDonalds im lovin it and Coca-Colas Share a Coke as creative techniques to get consumers thinking about their brand. They also use the power of celebrity to their advantage as many consumers look up to these famous figures and associating the celebrity to the brand brings recognition and the effect of: Madonna drinks Coca-Cola, I want to drink Coca-Cola because Madonna does and so on. Apple focuses on using the differentiation strategy to set them apart from competitors. They are the only manufacturer of computer that has established physical stores across the globe. Something I noticed that in my opinion may be the most important factor as far as marketing and expanding globally is that all three companies are flexible and adaptable. They all utilize new technological ways of marketing such as social media, which has become a vast playing field for promotional marketing and spreading the word in general. There are many companies that have the opportunity to expand globally, however to be successful after the globalization will require a company to continue finding new ways to reach people and keeping up with the ever changing technology so they remain innovative instead of becoming obsolete. These three companies are very adaptable and must be to keep up with changing consumer tastes, views, and opinions. I would state that the most intense part of my research was definitely learning about Apples manufacturing in Foxconn. Learning about the treatment of the employees and the high number of suicides at this major Apple manufacturing supplier was saddening. Apple also claims most of the negative media coverage about Foxconn is false, making this topic even more controversial. I do believe that these employees should be treated better, despite what Apple says. Apple needs to decide whether they believe this is ethically acceptable or not. If not, they then need to analyze the increase in costs that providing human rights improvements would bring. If these costs become to high, they should look elsewhere to manufacture these parts. While I do understand this would be a massive change for the company and effect many different aspects of their business strategy, I think it is crucial for them to do something to improve the treatment of their overseas employees working in the manufacturing plants. Such an innovative company should not be mistreating employees, especially to this extent. I am appreciative of the knowledge I gained from my research of these three extremely powerful and global businesses. I feel that I learned so much from analyzing everything from what strategies were applied, handling global expansion, and even mistakes made along the way and how they adapted quickly to fix them. I know better understand the importance of differentiation and effective market strategies. It is also important to realize that these successful companies faced many challenges and obstacles along the way but the key factor is to continuously find new and innovative solutions to these setbacks.

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