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1.
INTRODUCTION & HISTORY
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In 1955, Kroc knew that the key to success was through rapid expansion; thus, thebest way to achieve this was through offering franchises. Today, over 70 percent of McDonald's Restaurants are franchises. In 1986, the first franchised McDonald's opened inthe United Kingdom. Now, there are over 1,150 restaurants, employing more than 49,000people, of which 34 percent are operated by franchisees. Moreover, there are over 30,000these
Introduction:
When the Dick and Mac McDonald opened their first restaurant in San Bernardino,California in 1948, they never could have imagined the extraordinary growth their companywould experience. From modest beginnings, they found a winning formula selling highquality products quickly and low-cost. It was not until 1955 when Ray Kroc, a salesman fromChicago, became involved in the business that McDonald's really began to flourish. Krocrealized the same successful McDonald's formula could be exploited throughout the UnitedStates and beyond with the use of franchising. A franchise is an agreement or license to sell acompany's products exclusively in a particular area, or to operate a business that carries thatcompany's name.restaurantsin more than 119 countries, serving over 47 million customers around theworld. In 2000 alone, McDonald's served over 16 billion customers. For perspective, thatnumber is equivalent to providing a lunch and dinner for every man, woman, and child in theworld! McDonald's global sales were over $40 billion, making it by far the largest foodservice company in the world.Now McDonald’s Corporation USA is the ninth most valuable brand in the world. InOctober 1996, McDonald’s opened its first Indian outlet in Vasant Vihar, an affluentresidential colony in India’s capital, New Delhi. As of November 2004, McDonald’s hasopened a total of 58 restaurants, mostly in the northern and western part of India. WhileMcDonald’s opened 34 restaurants in five years (by 2001), 58 restaurants in eight years (by2004), it is now planning to add more than 90 new restaurants in the next coming years.Although the initial scenes of crowds lining up for days outside the McDonald’s restaurantsin Delhi and Mumbai are no longer seen, Indian consumer response to McDonald’s productsstill remains very strong.McDonald's India is a joint-venturecompany managed by Indians. McDonald’sIndia, a subsidiary of McDonald’s USA, hasexpanded its presence in India via 2 jointventure companies – Connaught Plazarestaurants and Hardcastle restaurants.McDonald’s (India) has a 50 per cent equitystake each in both joint venture companies.Connaught Plaza restaurants managesoperations and expansions across NorthIndia (Delhi, Jaipur and Punjab) – led by Vikram Bakshi – and Hardcastle restaurants, whichis headed by Amit Jatia, manages operations and expansions across Western India (Mumbai,Pune, and Gujarat).
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The growth of McDonald’s in India is not as rapid as in other countries. How didMcDonald’s do it? How did a hamburger chain become so prominent in a cultural zonedominated by non-beef, non-pork, vegetarian, and regional foods such as
chola bhatura,kababs, bhaji, idli, samosa, dosa, vada, sambar, bhelpuri,
and rice? The answer to thisquestion lies in McDonald’s carefully planned entry and expansion strategy in accordancewith India’s changing political, economic, and cultural landscape in the 1990s.Six years prior to the opening of the first McDonald's restaurant in India, McDonald'sand its international supplier partners worked together with local Indian Companies todevelop products that meet McDonald's rigorous quality standards. Part of this developmentinvolves the transfer of state-of-the-art food processing technology, which has enabled Indianbusinesses to grow by improving their ability to compete in today’s international markets.McDonald's constructs its restaurants using local architects, contractors, labour and - wherepossible – local materials. McDonald's hires local personnel for all positions within therestaurants and contributes a portion of its success to communities in the form of municipaltaxes and reinvestment.The above aspects of McDonald’s do not get covered and highlighted by the newshungry press. But when the false news of using beef allow in the French fries hit the market,the press did not leave a chance to exaggerate it. Despite the fact that right form thebeginning; no beef ingredients have been used in any of the products in India.The marketing agency of McDonald’s, Mudra comes to its rescue in such times. Theadvertisements created by Mudra are a rage all over the nation, especially amongst thechildren. Who can forget the little kid who gets nervous in the school competition, butbecomes happy again when his father takes him to McDonald’s?McDonald’s India has tried not to leave any stone un-turned in its objective to satisfythe Indian customer. But in Amit Jatia’s words,
“Customers are generally not forgiving.”
According to the survey conducted, customers demand low prices, more seating space, morevariety, home delivery, and the list is endless.The fundamental secret to McDonald’s success is the way it achieves uniformity andallegiance to an operating regimen with proper marketing strategy. McDonald’s India has toadhere to many rules and regulations laid down by the parent company, and it still has tocater to the Indian customer and his needs.
McDonald’s India is a case study on how to mixconformity with creativity.
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2. PHILOSOPHY & VISION
Every company has a Vision or Mission Statement. A vision statement should beshort, clear, vivid, inspiring and concise without using jargon, complicated words orconcepts. It represents the corporation guiding principles. It subtly indicates the businessesthe firm will pursue and the customer needs it will seek to satisfy. The vision statement alsoallows the employees to clearly adhere to the standards set up by the business unit and work in as per the guidelines framed by the company.
2.1 McDonald’s Vision Statement –"McDonald's vision is to be the world's best quick service restaurant experience. Beingthe best means providing outstanding quality, service, cleanliness, and value, so that wemake every customer in every restaurant smile."
The McDonald's philosophy of Quality, Service, Cleanliness and Value (QSC&V) isthe guiding force behind its service to the customers. McDonald’s India serves only thehighest quality products. All McDonald’s suppliers adhere to Indian Government regulationson food, health and hygiene while continuously maintaining their own recognized standards.All McDonald’s products are prepared using the most current state-of-the-art cookingequipment to ensure quality and safety. At McDonald’s, the customer always comes first.McDonald’s India provides fast friendly service- the hallmark of McDonald’s that sets itsrestaurants apart from others. McDonald’s restaurants provide a clean, comfortableenvironment especially suited for families. This is achieved through McDonald’s stringentcleaning standards, carefully adhered to.McDonald’s menu is priced at a value that the largest segment of the Indianconsumers can afford. McDonald’s does not sacrifice quality for value – rather McDonald’sleverages economies to minimize costs while maximizing value to customers. The maineffort of McDonalds’s service is to make customer the whole sole beneficiary through itsstringent standards maintained all over the world.
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