Thinking Citizen Blog — McDonalds Expands in China, While Other US Companies Retreat
Thinking Citizen Blog — Tuesday is Economics, Finance, and Business Day
Today’s Topic: McDonalds Expands in China, While Other US Companies Retreat
After a series of posts on economic thinkers from Daniel Kahneman to John Maynard Keynes, Joan Robinson, and Henry Hazlitt, we take a very sharp turn this week to consider the expansion of the iconic US fast food chain in China. Will the strategy succeed or fail?
Any bets? Remember that since 2017, McDonalds’ China operations are 52% owned by the Chinese government!!!!
Experts — please chime in. Correct, elaborate, elucidate.
MCDONALDS PLANS TO DOUBLE ITS RESTAURANTS IN CHINA BY 2028 TO OVER 10,000!!!!
1.”One of its challenges is a burgeoning Chinese rival called Tastien, which caters to local appetites with inexpensive burgers made of Peking duck, a spicy tofu or fish-flavored pork in addition to beef. The interiors of its restaurants are decked out in red and feature slogans such as “made in China” and “Chinese stomachs love Chinese burgers.”
2. “Not to be outdone,, Chicago-based McDonald’s has been offering new creations such as wraps made with chicken and pickled bamboo shoots, and promotions that have included Coca-Cola-flavored chicken wings and a sandwich made of Spam luncheon meat and Oreo cookie crumbs.” Yum!
3. “The company has created quirky promotions appealing to younger customers that have gone viral on social media. One is a combo meal that comes in a “cat box” made for felines to play in. In some stores the chain has unveiled exercise bikes equipped with trays, allowing riders to much their meals while pedaling to wirelessly charger their mobile phones.” Top that!
THE BIGGEST US FAST FOOD CHAIN IN CHINA IS YUM CHINA AND STARBUCKS IS ALSO BIG
1. Yum China “operates more than 14,000 KFC, Pizza Hut, and Taco Bell outlets in the country.” The first KFC store in China dates back to 1987.
2. Yum Brands spun off its China unit in 2016 as a separately listted company after increasing competition and food-safety concerns hit revenue.”
3. Starbucks has 7,000 outlets in China and plans to expand but Chinese competitor Luckin Coffee now has twice that.
MCDONALD HAS A 74.6% SHARE OF THE CHINESE BURGER MARKET — UP FROM 71.5% IN 2018 (below Tastien, Chinese competitor)
1. In 2017, McDonalds sold off “an 80% stake in its China, Hong Kong, and Macau operations… to a group that included Chinese state-owned enterprise Citic and US private-equity firmi Carlyle Group.”
2. “As part of the $2.1 billion deal, Citic held 52%, Carlyle 28%, and McDonald’s was left with 20%.”
3. “Now McDonald’s is repurchasing Carlyle’s 28% stake, increasing the burger chain’s ownership to 48%.”
NB: “The move is contingent upon what McDonald’s in November called “customary regulatory approvals.”
APPENDIX — A little background on McDonalds
1. Founded in 1940 by the McDonald Brothers in San Bernardino, California.
2. Bought out by Ray Kroc in 1955.
3. Now: 41,800 outlets in 118 countries serving over 70 million customers per day.
NB: Second largest private employer in the world: over 2 million. Walmart is #1.
McDonald’s Supersizes China Bet as Corporate America Pulls Back
Fast food in China — Wikipedia
QUOTE OF THE MONTH
“Make your own Bible. Select and collect all the words and sentences that in all your readings have been to you like the blast of a trumpet.”
- Ralph Waldo Emerson
My spin — then periodically review, re-rank, and exchange your list with those you love. I call this the “Orion Exchange” because seven is about as many as any human can digest at a time. Game?
ATTACHMENTS BELOW:
#1 A graphic guide to justice (9 metaphors on one page).
#2 “39 Songs, Prayers, and Poems: the Keys to the Hearts of Seven Billion People” — Adams House Senior Common Room Presentation, (11/17/20)
NB: Palestine Orion (Decision) — let’s exchange Orions, let’s find Rumi’s field (“Beyond all ideas of right and wrong, there is a field. Meet me there” Rumi, 13 century Persian Sufi mystic)
THE LAST FOUR YEARS OF POSTS ORGANIZED THEMATICALLY INTO FOURTEEN BOOK-LENGTH PDFs:
PDF with headlines — Google Drive
YOUR TURN — Please share:
a.) the coolest thing you learned this week related to business, economics, finance.
b.) the coolest thing you learned in your life related to business, economics, finance.
c.) anything at all related to business, economics, finance.
d.) anything at all
