MCDONALD’S IN INDIA

Ayush Khare
Nandish Parashar
INTRODUCTION

• In Oct 1996, McDonald’s opened first Outlet in Vasant Vihar, New Delhi.
• In 2001, there were 34 Resturants and it is currently having more than 400 Resturants in India.
• It focuses young people, children & young parents.
GROWING INCOME

• Average Annual Growth was 1.2% in 1970 and increased to 7% by 2010.

• GDP is expected to doubled at this rate in 18 years.
• 20% rich people contribute 40% income of the nation.
• Low income people were reduced from 14.9 million household in 1989-90 to 7.6 million in
2001-02 (urban) and 69 million in 1989-90 to 58 million in 2001-02.
• People having high disposable income.
POPULATION GROWTH &
URBANIZATION
• India added 181 million people between 1990-2001 and currently having 1.37 billion people.
• India will out perform other country as the population and will continue to grow for next 50
years, proportion of working age people will into 2020s.
• 70% affluent urban Indian live in Mumbai, Delhi, Ahmedabad and other metro cities.
• Nowdays both men and women work.
• Urbanization caused revolution to food industry , introduction of Delhi Waiters on Wheels
which supply food at your door steps.
INDIA’S ECONOMIC LIBERALIZATION

• McD effort to enter India started in 1990 after entry in China.

• In 1980 public sector was given most importance and had rigid economic rules during 1965-
1980.
• In June,1991 India faced payment crisis and inflation rate reached to 17%.
• Govt. tackled the problem by new economic policy headed under PM Narasimha Rao of
Congress .
• KFC & Pizza Hut rushed in 1990 after liberalization but McD took 6 years to plan, find
consumer taste, supply chain arrangement.
MC DONALD’S ROAD MAP FOR INDIA
• EMPHASIS ON LOCAL MANAGEMENT
• 50:50 JV was formed in Mumbai & Delhi.
• In Mumbai, Amit Jatia managed and in Delhi ,Vikram Bakshi handles operations of McD.
• Politically correct strategy
• Avoid religious hunting- Aloo tikki was introduced for first time.
• Avoid political confrontation
• Employment opportunity was created as one restaurant can create 100 jobs.
• GREEN SENSITIVITY
• McD Started Campaign of “keep your city clean” & “we love green”.
• Sport activity in Vadodara , June 2005 as “Olympics Day Run”.
• Baked and toasted products were introduced into menus.

• CORPORATE CITIZENSHIP
• Community related projects towards children, McD Spotlight was introduced in which Art
Competition for 5th to 10Th standards.
• World Children Week was inteoduced to raise funds from 14th to 20th Nov.
• Blue Dot for Education of a girl child.
• Millennium Pune Festival (talent search program) for children between 8 to 15 years.
• PRICING
• 50% of income is spent on food and beverages by Indians.
• PPP (Purchasing Power Parity) is calculated across country to provide with Big Mac Index.
• In small cities McD has a reputation of expensive restaurant so it reduced its price were
recuded to attract new customers in small cities.
• In March 2004, McD Launched Happy Price Menu in which burger was sold at Rs 20 with
increased 25% of customers.
• 80-20 Menu ; 80% visual And 20% descriptive.
• Supply chain helps to maintain cost.
• SUPPLY CHAIN MANAGEMENT
• Objective
• Operationalize its globally practiced QSCV(Quality, Service, Cleanliness,Value)
• Flexibility in pricing
• Launch new Product when necessary
• 95% of raw material from 38 local suppliers.
• Logistics use the ERP.
• LOCATION
• Mumbai & Delhi have metro culture so they were.aware of McD.
• Distribution center will drive down transaction & opportunity cost.
• It opened only within 500 km Radius of its distribution center.
• McD partnered with railway & bus station and petrol pump(BPCL).

• CULTURE SENSITIVITY
• Trend Of Quality products and spending on food & entertainment.
• 70/30 Dynamic
• McD transforms product according to local people preferences.
• McD tested the veggie burger in 1994 in London before launching in India.
• Veg Surprise was introduced for non veg people who turn vegetarian during festive season
(Paneer Salsa Wrap).
• FAMILY CENTRIC AND CHILDERN CENTRIC STRATEGY
• McD targets children as their clients.
• Happy Meal with logo toys.
• Fun zone, Birthday parties in McD.
• McD Offers promotion; purchase of large combo meals and get music show tickets (Music
Meal in April 2005).
• Lounges for senior Citizens to relax.
• Mcd scatch card to win prizes was introduced.
• Home delivery service.
• CHALLENGES AHEAD
• 5-7 years to reah break even because of expensive process control equipment & prime
location.
• It takes 12-13 yrs to reach break even in any new country.
• 20% of Young Indian prefer McD (Age 8 to 24 Yrs)
• American Culture gets in way of working.
• Political issues affect (Godhra Train carnage)
• Always customers need new products.
• Expansion problem due to distribution center.
• McD have a image of expensive resturent.
• McD cannot increase price of its products.