One major consideration for multinational firms as they expand is whether they need to adapt their products to the tastes and needs of customers in new locations. Here are two recent examples of firms taking on this challenge.
This Economist article discusses the expansion of Burger King in China (the firm intends to open 250-300 stores in China over the next five years). Other fast food chains such as McDonald’s and KFC have adapted their menus considerably in response to different customs and preferences in China (and elsewhere). Burger King has added some chicken and some chili to its offerings. Do you think that will be enough? How do these menu changes impact on the costs of the firm?
Another experienced internationaliser is Australian shopping centre giant Westfield. As I have discussed in a chapter (for a book called The Internationalisation Strategies of Small-Country Firms: The Australian Experience of Globalisation), the firm has extensive competitive advantages in property selection, design, branding and retailer management. They have successfully transferred these skills to home of shopping malls, the USA, and now have began a large expansion in Britain. This week they opened the first large shopping centre in London. In doing so, they are attempting to change the habits of British consumers (and Londoners in particular) as High Street shopping has been the norm rather than driving (or commuting) to malls. Despite launching in very tough times for retailers, the opening seems a success. The next big London project for Westfield is part of the 2012 Olympic site in East London. How long until Westfield dominates the British mall scene too?