Globalisation Success Stories

McDonald's India globalisation

By Ravi Kumar and Dr Divya Bhutiani

IN OUR recent article Globalisation — One Size Does Not Fit All we discussed several examples of companies like Walmart  and Tesco who burnt their hands entering global markets and withdrawing, suffering financial losses,.

And companies like LG Display, who faced several operational difficulties initially,  improved its performance considerably through efforts to increase cross-cultural understanding between Korean and its Polish employees.

Well, the good news is that there are examples of companies who have understood what it takes to be successful outside their home countries, even before they enter.

With respect to customising their product and service line according to the local needs and preferences of the consumers, two successful examples that come to mind are McDonald’s and 7-Eleven.

In India, considering the cultural and religious beliefs of the local consumers, McDonald’s added several vegetarian options to its menu and refrained from beef and pork, making it one of the most popular fast food chains in the country.

Similarly, Japanese convenience store 7-Eleven in Indonesia has transformed itself into a café where young people spend their evenings with their friends and surf the internet. 7-Eleven understood that Indonesian customers were unique compared to other Southeast Asian countries and like spending relaxing time with their friends, hence, would need more than just grab-and-go convenience.


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CostCo globalisation
Costco did its research before entering the South Korea market, as did McDonald’s when it opened in India (top). Photos: Shutterstock — Matyas Rehak and Jonathan Weiss.

Planning To Enter Successfully

Another extremely successful example of globalisation is Costco, the American membership-only wholesale retailer. The company spends around two years on average understanding the local context and planning before they actually start their foreign store operations.

During this period, to find the best location to open their big-box stores, they conduct extensive research on minute details starting from local consumer’s income and job profiles (including international exposure, especially the US), their lifestyles (including home ownership and cars they drive), as well as their tastes and preferences.

This enormous amount of market research has proved beneficial for the company in each of its ventures outside the US.

For example, its extraordinary success in South Korea (where WalMart and Carrefour withdrew) is well known — its Yangjae store in Seoul nets the highest revenue per square foot in the world! Before it opened its Busan store in 2009, it already had tens of thousands of people in the community become paying members and their store opening created a major traffic jam.

Costco is in the list of Forbes 2017 top 50 happiest companies to work for – they are known for their generous salaries and benefits, and bonuses paid based on team performance (e.g. bakery team acting like intrapreneurs) and store performance.

These are invaluable lessons to take on board for companies venturing offshore.


Prof. K. Ravi Kumar is the Shaw Chair Professor and Associate Provost (Special Projects) at Nanyang Technological University. Dr. Divya Bhutiani is a ‎Postdoctoral Research Fellow at Nanyang Business School’s Centre for Business of Culture (BoC).

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