Fast food investment in Barbados: the experience of McDonald’s
Publication date: 20 September 2024
Abstract
Learning outcomes
Specific teaching and learning objectives include to identify factors influencing market expansion decisions and recommend appropriate entry modes, understand factors in the international business environment that contribute to success or failure of international businesses in developing countries, evaluate strategies enabling international businesses to sustain market presence in developing countries and overcome local competition, analyze the concept of local responsiveness in international business operations and suggest strategies for internationalizing domestic companies from developing countries.
Case overview/synopsis
The McDonald’s case examines the challenges associated with market expansion by global brands. The case occurs during the early-globalization era in the 1990s. Barbados, a developing country, is the site for potential expansion. Prospective investors, the Winters, are desirous of establishing a McDonald’s in Barbados. They need to thoroughly analyze the previous experience of McDonald’s against the host country’s current international business environment, e.g. political, economic, cultural and competitive environment. This case analysis provides a framework for understanding the multifaceted reasons behind McDonald’s exit from Barbados, considering the complex interplay of political, economic, sociocultural, technological and legal factors in the international business environment. The case equips the instructor and students to explore the risks of international expansion, particularly in developing country markets. The case study on McDonald’s failure in Barbados highlights the need to thoroughly examine one’s market entry strategy and available information on the host market and be more locally responsive regarding tastes and preferences. The case study also presents essential lessons for firms and planners from developing countries. Local firms innovated and enhanced their operations in response to the threat from the entry of the global fast-food giant. Yet, they did not seek to internationalize once McDonald’s exited the Barbadian market. The case study, therefore, considers strategies firms from developing countries could utilize to penetrate markets from developed countries.
Complexity academic level
At the undergraduate level, the McDonald’s Barbados case can be used in international business classes to highlight risks in the international business environment and the need for a carefully planned and executed market entry strategy.
Supplementary materials
Teaching notes are available for educators only.
Subject code
CSS5: International Business.
Keywords
Acknowledgements
The authors thank Professor Patricia McDougall of the Kelly School of Business, Indiana University, and the USAID-funded Job Opportunities for Business Start-ups Project for their support in writing this case. We are also grateful for research assistance from Mikaela T. Hinds, a student of Management with International Business at the University of the West Indies Cave Hill Campus.
Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision-making. The authors may have disguised names; financial and other recognizable information to protect confidentiality.
Citation
Young Marshall, A.O. and Walkes, A. (2024), "Fast food investment in Barbados: the experience of McDonald’s", , Vol. 14 No. 3. https://doi.org/10.1108/EEMCS-01-2024-0028
Publisher
:Emerald Publishing Limited
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