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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
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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)











Source: slideshare.net/ aparnapriyadarshini/india



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

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

Competitive Rivalry
HIGH
Threat of substitutes
Not a lot of Options
available
MEDIUM
Threat of new errant
India has opened doors to
foreign fast food players
just recently
MEDIUM

Thus, the industry
is moderately
attractive.
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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.
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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.