Hello buddy, kindly find your paper attached below. Let me know if you have any question or need any edit. Thank you

Running head: MCDONALD’S IN TUNISIA

McDonald’s in Tunisia
Student Name
University
Course Title
Date

1

MCDONALD’S IN TUNISIA

2

Table of Contents
1.

Overview of McDonald’s ................................................................................................... 3

2.

A Contextual Overview of Tunisia ..................................................................................... 4

3.

Elements to Consider in McDonald’s Expansion to Tunisia .............................................. 6
3.1. Elements Related to the Country ..................................................................................... 6
3.1.1. Political Environment ............................................................................................... 6
3.1.2.

Religious and Cultural Factors ............................................................................. 7

3.2.

Elements Related to the Fast-food Industry in Tunisia ............................................... 9

3.3.

Porter Five Forces Analysis ....................................................................................... 10

3.4.

Supply of Raw Materials ........................................................................................... 11

3.5.

Strategy to Enter the Tunisian Market ....................................................................... 12

MCDONALD’S IN TUNISIA

3
McDonald’s in Tunisia

Developing or strengthening a successful business is an effort which requires time,
energy, financial means, and, above all, strategies. This reality is what multinational
companies have clearly understood, and it is the basis of their international expansion. In fact,
even with the time and all the required funds, it is almost impossible to get success when
opening a branch in a new market without appropriate strategies. The purpose of this
assignment is to discuss the key elements that a multinational company has to consider and
analyze when deciding to expand its activities to another country. The multinational company
selected for this assignment is McDonald’s, the American giant of the industry of fast-food
restaurant, and the country to penetrate is Tunisia. In northern Africa, McDonald’s is present
in Morocco and Egypt but the company has never opened even one restaurant in Tunisia.
Tunisia could represent a very interesting new opportunity for McDonald’s because of the
numerous similarities that the country shares with markets such as Morocco or Egypt, in
which McDonald’s already operates. This paper is built around the key elements that
McDonald’s needs to consider or analyze when deciding to expand its activities to Tunisia.
1. Overview of McDonald’s
McDonald’s is one of the best examples which illustrate how powerful
internationalization can be when it comes to financial growth. Indeed, McDonald’s, the
American fast-food giant, operates around 35,000 restaurants in approximately 100 countries.
From Bermuda to Iran to Island to Bolivia, McDonald’s is a company which has acquired a
very significant experience when it comes to strategies to penetrate new markets (Edmondson
et al., 2017). The company employs more than four million individuals from different
nationalities and different cultures. Although McDonald’s is an American-based company, the
American market only accounts for 47 percent of the company’s annual revenue (Edmondson
et al., 2017). This means that the remaining 63 percent comes from foreign branches. The

MCDONALD’S IN TUNISIA

4

company’s annual revenue was $22.8 billion during the fiscal year 2017 while its market
capitalization was estimated at $134.5 billion the same year (Edmondson et al., 2017). Such
tremendous results are the fruits of a very unique strategy. Indeed, among the 35,000
restaurants that the company operates across the world, McDonald’s owns only 19 percent of
them. The remaining 81 percent are franchised restaurants (Edmondson et al., 2017).
Franchising is the central pillar of McDonald’s global expansion. Under McDonald’s
franchising approach, there are two legal options. These options are the conventional
franchise and the license agreement. Under the conventional franchise, McDonald’s owns the
location and provides capital for it. On the other hand, the franchisee contributes to the capital
necessary for acquiring seats, equipment, and décor between others (Edmondson et al., 2017).
When it comes to the license agreement, the licensee owns the location and provides capital
for its acquisition. With such a strategy, McDonald’s succeeded to build a huge network of
restaurants across the world with almos...