In this series of articles I started several weeks ago, I have been sharing some insights into the various ways that the Coca-Cola McDonald’s Customer Services Group built a solid, long-term strategic partnership with McDonald’s.
To be truly a strategic partner, you have to be prepared to share. Before you can do that, you need to understand your customer’s business and be able to identify areas of real value. At Coca-Cola we did that. Back in 1994 I was appointed by Coca-Cola to steward our business with McDonald’s for Eastern Europe, Central Asia, Middle East, Africa and India. Based in Vienna, I had over 30 countries to oversee and most of them, apart from Germany, were developing countries. My main responsibilities were to increase sales and profits and police pricing with our biggest global customer. But at the core, the objective was to extend the strategic partnership beyond U.S. shores and provide service that would continue to build trust and respect.
In 1994, McDonald’s was in 67 countries. By the time I left Coca-Cola in 2004, McDonald’s was in 117 countries (almost double), of which 25 opened in my area. That was 50% of all the global new openings. Because of this, over 70% of my time was spent in helping McDonald’s open in these new countries. Why should Coca-Cola be involved in helping McDonald’s open new countries? Well the obvious answer is that it presented new sales opportunities for us. But there were other reasons too. McDonald’s helped teach people to drink beverages with ice and introduced the concept of larger sizes in markets that had only seen the small bottles or cans. McDonald’s helped introduce new forms of packaging the syrup that we then used in the rest of the marketplace and, through their volume, helped drive economies in the Coke system.
So, I hear you say, how did you help them? I understand the reason, but how could you possibly help? Since I asked it myself, I’d say that I think this is a good question! The Coca-Cola Company, at that time, was operating in over 200 countries. So we were already in all the countries they planned to expand to. We had established bottler and distribution systems with global offices. So although the various strategic initiatives I mention here were important to us, the real opportunity in helping McDonald’s open new markets was to grow the strategic partnership and to add real value to our customer.
We actually had a new country opening plan. First we showed McDonald’s around a potential new market. Then we provided them demographic data and introduced them to potential licensees and locations. Finally we were present at the first opening to present a special commemorative cake.
One of these relationships was with Andreas Hacker, who was in charge of the McDonald’s operation for Central Europe and Asia. He had very ambitious plans. He already had great success to support these ambitions by opening McDonald’s restaurants in Czech Republic, Poland, Slovenia, Bulgaria, Latvia, Estonia, Romania, Slovakia, Croatia, Lithuania, Belarus, Ukraine and Moldova in less than 6 years! He declared he wanted to extend the McDonald’s operation as far as the Chinese border or Hadrian’s Wall. To do this, he would have to start opening in countries that he and his team had never visited, let alone think about having to create a supply chain. So what were these countries and where were they? How did they do that, and how did they go about it. Well, with our help. Over the next few articles I will go deeper into the various roles we played in helping McDonald’s open in new countries by using examples and sharing some stories.