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BTEC Business Level 3 Unit 39 - Assignment 1 M1 All criteria met for this piece of work; gained a distinction overall for this unit.
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M1Advantages and Disadvantages of McDonalds Trading in India
Advantages
There are various advantages of McDonalds trading in India; the main advantage of trading for
McDonalds is that there is less limitations on trading which means that the goods that are imported
and exported may not have restrictions although some of the goods may not be able to be traded
due to quotas and trade barriers.
Cheap resources is a great advantage to McDonalds because this means that the resources that they
require will cost them less because the resources are ‘close to hand’ due to the fact that India has
many resources that McDonalds may need. The resources will be cheap because McDonalds do not
have to outsource for them, as well as this, McDonalds will not have to import resources because
they can acquire them by purchasing them in India. This benefits McDonalds because India is able to
sell the resources to McDonalds for a cheaper price which means that McDonalds can purchase
more of the resources; as well as this, it enables McDonalds to save more money by purchasing in
bulk.
An advantage of McDonalds trading in India is that they will be able to get access to cheap labour
which means that they can easily find employees to work within the McDonalds restaurant; this is
also an advantage to India because more people will have the opportunity to be employed which
means that unemployment levels will decrease. Furthermore, the money gained from the wages
that the employees will make will allow them to purchase more goods from stores as well as luxury
items which means that the economy will benefit from this.
Another advantage of McDonalds trading in India is that they will not have to pay tariffs which
means that the goods that are traded may not have to be paid for due to the Free Trade Agreement;
this is a benefit because it enables McDonalds to trade their goods without paying tariffs which
would increase their expenses. The Free Trade Agreement allows McDonalds to trade freely with
other countries which is a benefit because they can develop a relationship with countries and also
save themselves money rather than paying for goods to be traded.
Disadvantages
Cultural differences
The main disadvantage of McDonalds is that India will have major cultural differences as opposed to
other countries; an example of this is beliefs. Beliefs are a disadvantage to McDonalds because they
have to consider it due to the fact that India has a strong presence of culture; this means that
McDonalds have to ensure that their products do not offend the population by offering an
alternative and making it clear to the customers. An example of this is the consumption of beef and
pork, McDonalds will have to adjust their menus to accommodate their customers to ensure that
there will not be any disrespect to customers and their culture.
Shopping habits
Shopping habits are also a disadvantage for McDonalds because the customers may not be
interested in the type of products that McDonalds offer due to the fact that the customers may view
the products as a luxury rather than a necessity; this means that the products will not be purchased
by customers because they will be more likely to purchase products that they require as opposed to
luxury items.
Assignment 1 Unit 39
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