It is beyond all doubts that in the world today, the fast-food sphere is taking an important part in the overall restaurant and food industry. It is caused by the fact that people are very busy and often save their time by having meals in fast food restaurants. There is an intensive discussion all over the world about the harm of fast food for health that has been taking place for more than 20 years. However, the fast food industry still remains promising and prosperous through the years.
One of the most famous, well-known, and oldest fast food companies is McDonald’s. McDonald’s System, Inc. was founded in 1955; three years later, it sold 100 million hamburgers and became one of the most successful fast food companies (Our History, n.d.). Now, McDonald's is the world leader in fast food industry with more than 36,000 locations in over 100 countries that is running its business on the conditions of franchise (Company Profile, n.d.). Thus, the research paper aimes at the analysis of McDonald’s franchise peculiarities in the UAE and Qatar and their impact on global trends.
Peculiarities of McDonald’s Franchise in the UAE and Qatar
McDonald's is the premium franchising company in the world. Approximately 80% of McDonald's restaurants worldwide are running on the conditions of franchise. The United Arabic Emirates and Qatar are not the exceptions. McDonald's is also run as a franchise enterprise in these countries.
In terms of McDonald’s global expansion strategy, it is important to say that the company is not targeting to capture all possible markets. It focuses on the importance of the existing ones. It does not settle the terms when the new market needs to be opened. No firm date has been established for the opening of new markets (International Franchising, n.d.). In the process of franchising, McDonald's is seeking for the most effective locations in order to provide the customers with the convenient access to the company restaurants. The location may be situated in the neighborhoods as well as near the public places (Real Estate, n.d.).
McDonald’s restaurants in the United Arabic Emirates and Qatar are combined into the single group of McDonald’s Arabia that belongs to the Middle East group according to the company segmentation. The company has the same menu, peculiarities, and web-site design in the United Arabic Emirates and Qatar; although, they are different from the other geographic groups of McDonald’s restaurants. The Middle East is a large market for McDonald’s that operates about 1,200 restaurants in 16 countries (Attwood, 2015). The average sales of the Middle East market make $2 bn per year (Attwood, 2015). From the economic point of view, UAE is a strong, solid, and perspective market for McDonald’s due to the high economic development and large amount of tourists. On the contrary, Qatar is a less promising market but it still makes a considerable impact on the company’s profitability and prosperity.
Globalization is an important phenomenon that has been taking place in the world during recent years. Globalization means the worldwide integration in economic, financial, trade, and communication aspects (Business Dictionary). There is no doubt that McDonald’s has a considerable impact on the world globalization. It was the first company that made an attempt to spread the American love to fast food all over the world. Especially critical this issue is in the East countries that are rather considered about the national culture. However, through the years, McDonald’s has settled rather confidently on the food market of the Eastern countries. Thus, the fast food company has contributed considerably into world globalization in terms of food industry and added some similar characteristics to the different countries’ markets.
The globalization process of McDonald’s is rather important for the United Arabic Emirates and Qatar from the social point of view. First of all, due to the specific spicy national cuisine, the visitors of the Middle East countries are not always able to find food accounting to their tastes. In such case, there is a well-know McDonald’s presented on the Middle East food market with familiar French-fries and burgers. It is especially important for the UAE that has a large amount of tourists that make about 4% of GDP (World Travel and Tourism Council, 2015). In addition, not only US cuisine is brought to the Eastern market, but the peculiarities of food from all over the world. For example, the Chicken Mexicano burgers are presented in the Signature collection for the UAE and Qatar market along with being sourced from around the world (Signature Collection, n.d.).
Due to the economic criteria, McDonald’s contributes to national globalization through the settlement of the price level for the restaurant menu. The prices of McDonald’s are not the same in different countries, although they are orienting on the same price level. In addition, a great positive impact is made by McDonald’s in terms of food ingredients criteria standardization. According to franchising conditions, there are corporate standards that the companies need to meet in order to work under McDonald’s franchise. They are rather strict and demand high quality of products that are used in the fast food restaurants of the company. This fact is very important for the developing countries where there is no food requirements standardization.
Modernization is a critically important element of the technological development process. The research and development process is rather complicated and expensive. Not all companies have enough resources to conduct it in order to enhance service or product development. As for the McDonald’s franchise program, all modernizations that are adopted by the head office need to be launched in the franchising countries. As it is known, high quality ovens, coffee machines, and other equipment are used in McDonald’s fast food restaurants. Thus, American innovation and modernization are becoming widespread all over the world, including the United Arabic Emirates and Qatar favoring the countries’ technological development.
Along with globalization, westernization, and modernization, an important part is taken by the localization. This process incorporates the local Eastern criteria of the United Arabic Emirates and Qatar into the overall McDonald’s business. Due to the fact that the national Arabic cuisine is characterized by unique spices and hot taste of food, some peculiarities of Arabic cuisine are added to the usual menu of McDonald’s.
In addition, the McDonald’s food in the United Arabic Emirates and Qatar are also adapted to the Eastern market according to the religious reasons. There are no usual for American and European market burgers with bacon. On the contrary, the menu of the UAE and Qatar has the certain characteristic, namely Halal certified product. These are the products that are facing the requirements of Islamic Sharia law. Thus, there are the products McDonald’s adapted to the specific market of the UAE and Qatar according to localization conditions.
The process of westernization is especially significant for the Eastern regions. It makes the critically different regions, namely the West and the East, much closer. McDonald’s presence on the Middle East market, particularly in the United Arabic Emirates and Qatar, has made a considerable impact on the westernization process in these countries. First of all, the westernization process takes place in cuisine. The introduction of the American food peculiarities has been delivered to the Eastern marker. Moreover, these trends have been admired by the inhabitants of the United Arabic Emirates and Qatar and included into everyday menu. In addition, due to the effective launching of McDonald’s and other American companies in the UAE and Qatar, Western trends in running business have been acquired by Arabic business world. It is a considerable impact on the globalization of business world and mutual economic development of Western and Eastern world.
McDonaldization Process in the UAE and Qatar
McDonaldization is a specific term that has been recently came into the usage meaning the process of fast food popularization. McDonaldization is a current phenomenon that takes place all over the world due to the increasing popularity of fast food restaurants. The same trend is characteristic to the market of the UAE and Qatar. The number of fast food restaurants is rapidly growing. The number of the existing ones is increasing due to the launching of new fast food companies on the market. However, it is important to stress that not only Western food is coming to the market of the UAE and Qatar, but they are also launching their national cuisine fast food restaurants and spread them all over the world.
Thus, taking everything into account, it is important to highlight the considerable impact of McDonald’s as a franchising company on the food market of the United Arabic Emirates and Qatar. All of the important global processes such as globalization, modernization, localization, westernization, and McDonaldization are taking place on the researched market due to the presence of McDonald’s on it. All of these elements affect considerably the conditions on both domestic and foreign markets.