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Analysis of the Case of McDonalds in India

When McDonalds enter a market that doesnt really fit their typical kind of market' such as what happen in India, they tend to do a complete modification of the menu to fit the local tastes. In India, cows are considered sacred, so serving ground beef for burger patties would put out business for good. Instead of serving beef, they serve veggie burgers, tofu or lambs. To gain the acceptance of the locale, McDonalds has to meticulously source out raw materials and segregate the vegetarian and non-vegetarian costumers. Compared to other fast food chains like KFC and Domino Pizza, McDonalds has done better in capturing a part of the Indian taste and become a major player in the Indian fast food arena.

The key central issue of the readings is how McDonalds get to dominate the fast food arena in India. Despite the fact that they didnt get too much attention from customers in their early years of service, they still managed to get into the top and be patronized by most of the people in India. How McDonalds did it was a long process. They customized everything even their menus and adopted with the Indian environment without changing the quality they offer. There are also some other food chains who tried to enter the Indian market and one of them was KFC. It became hard for KFC to enter the food arena in India. KFC tried but it just didnt get to achieve McDonalds level.

McDonalds went for customization in India since their marketing strategies fail to sell the Indian market. Following their fundamental consistency rule which offers products of uniform size, price and equality in all the markets is not working or effective. McDonalds and Domino must consider Five Porters analysis as they entered the Indian market. First are their buyers. In case of McDonalds, they have problems regarding the willingness to pay of Indians as they foresee their prices as expensive. They dont serve vegetarian foods which cant cater possible customers which doesnt eat meat. Domino on the other hand, had a difficulty having brand identity as they are confused how to serve or market their primary product, pizza if it is a meal or snack. Their home delivery service hasnt caught the Indians. Both firms faced difficulty of having competitive rivalry since there are already existing food

chains in India (diverse competitors) and they had problems in product differentiation on how to make their product distinct. In the case of McDonalds, cleanliness and fast service is not enough to be distinct among competitors. Facing other factors such as substitutes, barriers to entry and suppliers, aside from being individually unique, they must be knowledgeable enough that India itself also has a unique market environment. For Domino, they gave their pizzas a special Indian taste by region (southern and northern Indian regions) as McDonalds made their taste for India in general and they also varied the names of their products as they made their menu more diverse and more appealing to the Indian taste.

Analysis of the External Environment (Porters Five Forces A nalyis)

Threat of new errant India has opened doors to foreign fast food players just recently MEDIUM

Bargaining Power of Suppliers There are a lot of suppliers available in the market LOW

Competitive Rivalry HIGH

Bargaining power of Buyers There are only few fast food joints in India MEDIUM

Thus, the industry is moderately attractive.

Threat of substitutes Not a lot of Options available MEDIUM

Source: slideshare.net/ aparnapriyadarshini/india

Evaluation of the SWOT Analysis

Failure of KFC in Indiar When Yum Restaurants India opened the first Kentucky Fried Chicken (KFC) outlet in Bangalore in the mid-1990s, locals protested about the brand's multinational origins. As the ensuing months proved, it wasn't only KFC's parentage that was too foreign; the chicken wings and wraps it offered were too alien for Indian taste buds. In just a few years, Yum closed all its KFC restaurants in India, and did not re-launch the brand until 2004. This time, though, the company was more market-savvy. It introduced a vegetarian menu that included rice meals, wraps and side dishes -- the most extensive meat-free menu across the chain's worldwide operations -- and, like McDonald's, stuck to eggless mayonnaise and sauces. Even its trademark chicken dishes were given a local flavor with the use of Indian spices and cooking techniques. However, in the succeeding years, KFC scaled back its expansion plans after major protests. KFC was also accused of using illegally high amounts of MSG and frying its chicken in pork fat (India's 150 million Muslims don't eat pork). Activist groups protested outside the restaurant in Bangalore, holding placards reading 'Quit India' and 'Stop Playing Foul'. KFC now has just one restaurant in India.

Recommendation India is a country of tradition and culture, its tradition and culture is like a pearl necklace where every beautifully white pearl represents customs like respecting elders, joint family tradition, and strong religious perspective that even extends to their food habit. Home cooked foods are not only a preference but are also a matter of pride for most Indians. There are approximately 22,000 registered restaurants in India. In addition, there are more than 100,000 dhabas (small roadside food stalls) that sell a variety of foods in cities and on highways. With this in status quo, McDonalds has really a wide range of competitors and needs to adjust to certain factors that would affect its existence in India thats why certain recommendations requires ample consideration for it to work as an effective fast-food chain in the said country. To uphold

the McDonalds philosophy of Quality, Service, Cleanliness and Value (QSC&V) as its guiding force behind its service to the customers, all McDonalds suppliers should adhere to Indian Government regulations on food, health and hygiene while continuously maintaining their own recognized standards. McDonalds worldwide is well known for the high degree of respect to the local culture and this is one advantage that the chain could use. McDonalds should further develop a menu for India with vegetarian selections to suit Indian tasted and culture. Keeping in line with this, McDonalds should not offer any beef and pork items in India. McDonalds should also re-engineer its operations to address the special requirements of a vegetarian menu. At the same time, vegetable products should be prepared separately, using dedicated equipment and utensils. Furthermore, only vegetable oil should be used as the cooking medium. This separation of vegetarian and non-vegetarian food products should be maintained within its branches throughout the various stages of procurement, cooking and serving. Through these concerns, pursuing sensitivity to local taste having no pork or beef in sold goods and vending such products in affordable prices, McDonalds would exponentially increase its population of customers. Promoting a family dining experience through innovative practices, we will see a better and wider McDonalds company serving the people of India.