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Using Extract A, assess two likely reasons why US fast food companies such as McDonald’s choose to locate restaurants in the UK - Edexcel - A-Level Business - Question 1 - 2022 - Paper 3
Question 1
Using Extract A, assess two likely reasons why US fast food companies such as McDonald’s choose to locate restaurants in the UK. Extract A Benefits of McDonald’s to... show full transcript
Worked Solution & Example Answer:Using Extract A, assess two likely reasons why US fast food companies such as McDonald’s choose to locate restaurants in the UK - Edexcel - A-Level Business - Question 1 - 2022 - Paper 3
Step 1
Reason 1: Boosting Revenue and Customer Base
Answer
One significant reason why McDonald's chooses to locate in the UK is the potential for revenue growth. With over 1,250 restaurants in the UK, McDonald's can draw on a large customer base. The presence of numerous franchisees allows the brand to penetrate various market segments, thereby increasing sales and boosting overall revenues. This strategy enables McDonald's to maximize its market presence and ensure customer accessibility in diverse locations.
Step 2
Reason 2: Entrepreneurial Skills of Local Franchisees
Answer
Another reason is the availability of local entrepreneurs who possess the necessary skills and qualities to run successful franchises. The UK has a varied pool of talent with experience in business operations, which can enhance the performance of each franchise. By empowering local entrepreneurs, McDonald's not only fosters community relations but also benefits from their knowledge of local consumer preferences and market dynamics, which can improve profitability.