The Learning Business Research Proposal LB5235: Practical or Research Project On The Challenges of Fast Food Restaurant Chain when Dealing with International Customers -A case study on McDonald’s, Australia The Learning Business Research Proposal LB5235: Practical or Research Project 1. Introduction Globalization develops the need for businesses to expand into new countries across the world. International market opens new opportunities for expansion and growth of domestic businesses. International expansion of restaurants always comes with a host of challenges due to lack of international market research. Even if a restaurant has well known image, it has to face many difficulties in expanding its business overseas. In this research project, we will explore the various issues faced by America’s fast food restaurant McDonalds in Australia with international multicultural customers. McDonald’s is among world’s top most fast food restaurants. To maintain itself to this position, it has to compete with other fast food competitors more efficiently. Thus the problem formulation of this study will be how the big leading fast food restaurant chain carries out its growth strategies for dealing with the challenges of international customers from China, India, Sri Lanka, Italy, etc. at same place. International marketing research or awareness of various issues at international level like environmental differences, cultural differences, food habits, customs and traditions, marketing strategies, target market, staff, customer’s preferences, taste, health issues, food system, etc. will be helpful for a restaurant for more successful and profitable business. 1.1Need for the Study The main purpose and aim of this study is to explore different challenges faced by a well developed fast food restaurant in foreign country. Despite the increasing interest in the area, there is very little research done on customer perceptions of food and service in fast food restaurants. There are some points that need to be more clearly described and in depth. The articles or other research papers have not described the issues faced by McDonalds while dealing with multicultural society in Australia. In this project, we are going to research and consider all challenges, strategies and international research benefits from a new perspective. 1.2 Research objectives or research questions 1) What are main challenges faced by fast food restaurant McDonalds when dealing with international customers in Australia? 2) What strategies can be used by this restaurant to beat its competitors and satisfy its customers? 3) How market research will be helpful for the fast food chain seeking expansion in Australian market? 2. Literature Review There are many research papers, books, online WebPages and articles describing various issues faced by McDonalds in international market. As per Tony Royle (2000), McDonald’s faced problem of finding best location for its branch in foreign country along with operation relating problems. International marketing research helps global marketer in understanding foreign market (Farrell, 2015). McDonalds’ spend a lot of money on research and development for minimizing risk factors at new place. It modified itself as per different ethnic groups (Brown, 2014). Now, McDonalds is world’s best fast food chain as it has resolved all these issues. It has different products and ingredients in different countries with people having different food habits and cultures. This study indicates, MacDonald’s is away from troubles in present and will maintain itself at same position in future. However, there is a gap in what is visible and actual reality. This gap will be analysed in current research project. Satisfying Australian multicultural international customers is a great issue for McDonald’s and can lead to more trouble in present and near future for it. 2.1 Fast Food Restaurant Chain: It is also known as Quick Service Restaurant within industry. As per Gary Gardner, (2015) fast food restaurants are chain outlets that primarily offer drive-through, counter, take away or delivery food services. These restaurants serve fast food with negligible table service. There may be eating arrangements at restaurants, but most of the food is served as take away. Fast food restaurants are usually division of a restaurant chain or franchise operation that supplies standardized ingredients and/or partly cooked foods and provides to every restaurant through controlled supply channels. MacDonald’s is America’s top fast food chain with franchises across the world. 2.2 International Customers in Australia: More than a quarter of population in Australia is immigrants from foreign countries. In early time period, people came mostly from UK and Europe. Later on, people from whole Asia especially India, Japan, Vietnam, China etc. and outside of Europe started visiting to Australia. These immigrants are on different visas like students, family visa, work visa, tourist visa, investor visa, temporary or permanent resident visa, etc. Most of the foreigners are now permanent residents and citizens of Australia. Hence, Australia is growing as a country of diverse population with diverse cultures. In June, 2016, 28.5% of Australia's estimated resident population is foreigners (Australian Bureau of Statistics, 2017). All these foreigners are international customers using products and services available in Australia. Porter’s ‘Generic strategies’ is a simple method which can be functional to any business or industry irrespective of its nature and its size. In this model Porter has recommended three strategies to stay ahead of competitors. These strategies are: cost leadership, differentiation and focus. Cost leadership and differentiation are one of the main factors that help in achieving competitive advantage. Cost leadership imposes several burdens on the company to keep up its position. Too much attention on cost leads to inability to see the required product and marketing changes. Differentiation can be risky to brand image. It can add more cost to differentiated firm due to technological changes or simply due to inattention, which results in high prices of products. For large cost savings, customers sacrifice some of features and image of differentiated firm. Focus involves yet another risk like differences between desired product between target market and whole market becomes narrows (Porter, 2008). The combined growth of mutually localised and internationally flexible capabilities surely signifies one of the main challenges being faced by MNCs like McDonalds. Brandenburg and Stuart (1996), give more importance on creating the brand value. The maintenance of competitive advantage is more imperative than its creation. Kaplan (2000) argued that businesses must show up with a diverse product from rest of its rivals. This will be helpful for McDonalds in enjoying benefit in opposition and also keep up it for longer time period (UK Essays, 2015) Porter further added that a business must have an expertise in one particular field and not more than one. To expertise in a particular field McDonalds has to give up focusing on other areas of the business and make more by directed on a single part (UK Essays, 2015).McDonald can use any one of such methods to achieve competitive advantage over their competitors. Along with it the business has to modify and update itself with current state of affairs of the market and opponent businesses in order to retain its competitive place into the market (Porter, 1985). 2.3 Challenges for McDonald’s in Australia 2.3.1 Increased competition: Australian fast food chain is highly competitive with local as well as international competitors. Hungary Jack’s, KFC, Dominos Pizza, Nando’s, Pizza Hut, Subway, Oporto, Red Rooster, Eagle Boys Pizza, and many other newer players have been intensifying the competition. Westcott (2014) said that in Australian market, demand for Asian and Italian takeaway is growing along with juice and salad bars. 2.3.2 Satisfying Multicultural Society: Australia is multicultural society. It is the most challenging target market for McDonald’s. It is facing troubles in satisfying the tastes and demands of all its international customers with different food habits, customs, cultures, religions, tastes, health and ages at same location. For Example, Indian Hindu customers in Australia are complaining for lack of variety in vegetarian items in McDonald’s menu. Every week, the demand for vegetarian food is rising and for a fast food chain not to include the veggie option in the menu is a massive missed opportunity for new customers. In a growing market, people have a lot of choices for non-vegetarian food. They will go elsewhere. But, vegetarian options are very few. McDonalds’s is cutting itself short if it doesn’t have a veggie option on the menu and missing out on the market. (Brown, 2016) 2.3.3 Overcomplicated menu In struggle of satisfying more customers, McDonald’s is continuously introducing new items. Its menu size has increased by 75% in last 10 years. McDonald’s decision to include more products to an already-packed menu has not been appreciated by its workers. Staff from across Australia has criticized the company's decision to provide breakfast food for whole day. According to them, such complicated menu creates cramped and unhygienic kitchens (Bungard, 2016). Service speed, quality and cleaning process has suffered a lot. Across New South Wales, health inspectors found unclean and unhygienic kitchens in McDonald’s restaurants. The worst filthy kitchen in inner west of Sydney was fined $24000 (Devlin, 2017). 2.3.4 Health Issues Gary (2015) said that excessive consumption of fast food produce in diet with high saturated fats and low vegetables and fruits. This results in increase in many health issues like Obesity, hypertension, coronary heart diseases, diabetes and several types of cancer. Now, public is becoming more health conscious; keeping themselves away from fast food as much as possible. 2. Research Design Collection of appropriate data and information depends upon the research design. It helps to collect, analyze, disseminate and utilize information for the purpose of improving the satisfaction of the case study company (Kumar, 2008.) The research designs are of two types: Quantitative (emphasizes words) and Qualitative (collection of numerical data).The research methodology chosen in this study is quantitative approach. Quantitative research focuses on gathering numerical data and generalizing it across groups of people or to explain a particular phenomenon. (Muijs, 2011) The reason to choose this method is because quantitative method is useful to quantify opinions, attitudes and behaviours and find out how the whole population feels about a certain issue. Tools, such as questionnaires or computer software, are used to collect numerical data. The Quantitative research design, including a questionnaire is used in this proposal. Questionnaires will be included for respondents of different countries. For survey, there are a variety of questions listed in these questionnaires, consisting personal information of subjects like age, gender, nationality etc.; questions are about the services of restaurant like if food is nutritious, food variety and taste, quality meets expectation, cleanliness, employees are friendly, the changes that they want to see in McDonald’s food and service, etc.; and some questions about restaurant attributes like if they will recommend it to friends or will visit again and many more. Besides this, secondary data would also be used. In this proposal, qualitative method will also be used along with quantitative method to have a deep understanding of perceptions of international customers of McDonald’s in Australia. We will observe behaviour of international customers, staff and competitors’ of McDonalds’ for finding their difficulties and strategies. 3.1 Data Collection Primarily, the data will be collected from secondary sources like magazines, websites, electronic books, online research papers, books, newspapers, articles on this subject, annual reports, etc. Some primary sources can be included like questionnaires or surveys, observations, discussions, etc. For the purpose of this data collection, 50-60 international customers of McDonalds would be surveyed in Brisbane, which would include university international students, family visitors, tourists etc., of all ages and sexes. . The most of the subjects are unknown to researchers. The probability of selecting a subject is unknown, so non probability sampling method would be used in this research proposal. Furthermore, it is a convenient way to bring together a sample with little or no cost (Babbie, 1990). Researchers can go to McDonalds’ in Brisbane and question those international customers leaving the establishment after having food over there or other subjects could also be surveyed, who have previously experienced McDonalds’ food. 3.2 Data Analysis Methods Data analysis means description and summarization of data, identification of relationships between variables, comparison of variables and identification of difference between variables. As it is a paper questionnaire, customers responses are transferred manually into a spreadsheet and for this purpose a variety of high-quality software are available. Microsoft excel is one of the most user friendly software and is capable of running basic descriptive statistics as well as a range of more complex statistical analyses. After calculating people’s response, data is presented through table and graph. 3.3 Ethical Issues Within the perspective of research, ethics refers to the appropriateness of the researchers behaviour in relations to the right of those who become the subject of his/her work, or affected by it (Saunders, 2009). Due to consider about ethical issues, name, salary, address and phone number of respondents will not appear in research report. Main point is all Data ensure that will be kept as a confidential. During the questionnaire it is very important that the respondents are not harmed in any way possible and monitoring for any potential harm should be taken into consideration. The use of offensive, discriminatory, or other unacceptable language needs to be avoided in the formulation of questionnaire or discussions, etc. This study must be adhered to ethical principles and information attained through questionnaires should be used only for the research project purpose to evade issue of encroachment. Works of other authors used in any part of the project will be acknowledged with the use of APA referencing. It is really important that outcome of the research are honestly analysed and produced, thus not creating any misrepresentation. The highest level of objectivity will be maintained in discussions and analysis throughout the research. 3. Timeline Week Activity of Research 1st week  Made a group of two and decide to use Quantitative research method along  Select the topic- The Challenges of Fast Food Restaurant Chain when Dealing with International Customers -A case study on McDonald’s, Australia 2nd week  Research the journal articles, books to find needed literature review and found relevant information 3rd week  Analyse data on the collected data by comparing information from journals articles  Consult Lecturer to make sure that we were on right track  Start working on research proposal 4th week  Write down introduction, literature review and research design for proposal  Check draft with lecturer 5th week  Write down ethical issues and timeline for research proposal  Final submission for proposal at end of this week 6th week  Prepare list of questions for questionnaire/survey 7th week  Conduct survey and collect data from different respondents through questionnaire  Observe Participants/Respondents 8th week  Data entry and analysis  Write Results and Discussion  Obtain approval from lecturer 9th week  Prepare Final Draft  Checked draft with lecturer 10th week  Revise the project report  Final submission of project report 5. 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