Adam Galea – McDonalds Thailand
We had the opportunity to visit with the McDonalds Thailand, a franchise company that owns and operates all of the McDonald’s restaurants and food outlets in Thailand. This visit gave great insight into how an American rooted company adapts to franchising in another country. Additionally, we learned of some obstacles and challenges experienced when adapting an American product to the taste of a local culture and business practices while remaining true to the original product. As well, we got a glimpse into how an overseas franchisee conducts business with an iconic American brand.
Each culture around the world comes with its unique dietary tastes and popularity of specific food dishes. Thailand is no exception with its strongly seasoned flavors, heat and demand for seafood based products. What stuck out to me was how the McDonalds franchise was able to address these demands through ingredient changes and additional product offerings such as congee for breakfast or noodles during the day. It was shared how this variety is needed to not only attract the younger generation but also encourage the entire family to come. Even with the local specific menu adds, the familiar core items such as a Big Mac, french fries and chicken nuggets are still well represented. Staying true to the core brand, this franchisee often has to import key ingredients which are subjected to import taxes.
In our meeting we learned more about the business challenges these international franchisees face. Specifically in Thailand, one challenge faced is the need for low cost items to meet the income levels of his consumer while balancing the increase in expense from import taxes, resulting in the highest cost products for the lowest priced items.
With all of the challenges a franchisee faces overseas there come some liberties that domestic franchise owners may not have available to them. The ability to test products and promotions to expand business and stay competitive are often driven by corporate offices. What was clear to me was how an 11 hour time difference and half the world in distance allowed this franchise owner to pilot different promotional items and even expanding beyond the food industry with the McDonalds name.