MC DONALD’S STRATEGY

BEHIND ITS SUCCESS

WORLDWIDE AND IN INDIA
By-
STUTI
(A3221519282)
MEGHA GAUTAM
(A3221519281)
 MCDONALD’S INTERNATIONAL STRATEGY:
ADAPTING AROUND THE WORLD
 McDonald’s was started in San Bernardino, California in 1940. The international business started as a fast food
restaurant by brothers Maurice and Richard McDonald. From being a restaurant the owners turned the business into a
hamburger outlet before exploring the franchise business. They started using the logo named Golden Arches in 1953
and later in 1965 Ronald McDonald was introduced as the official mascot of McDonalds and is recognised as the same
till date. After joining the company in 1955, Ray Kroc purchased the McDonald’s chain. Its new headquarters is located
in Chicago, Illinois. And all of this forms the basis for the McDonald’s international strategy.
 In terms of revenue, McDonald’s is considered as the biggest restaurant chain in the world. As of 2017, it has 37,241
fast food restaurants around the world. While its main menu offerings consist of hamburgers and fries, the fast food
chain serves other items, including milkshakes, soft drinks, desserts, breakfast fare, products made with chicken and
wraps.
 Like other fast food restaurants, McDonald’s as an international business also faced some challenging times. Still, the
company was able to withstand the drawbacks, making it one of the most successful fast food franchises in the world.
 How McDonald’s Adapts To Different Cultures- The key factors for McDonald’s fast food restaurants success in
different countries are adaptation as well as innovation. The company comes up with a variety of services and products
catering to the needs of a consumer market that is widely diverse, basing their offerings on consumer
demographics, local and economic factors.
 
McDonald’s International Strategy For Marketing Success
 Despite being a fast food chain that mainly serves beef hamburgers and French fries, aside from the new additions, it is surprising that
various countries accepted the international food franchise. McDonald’s has outlets in all the continents, operating in more than 100
countries.
The Secret To The McDonald’s International Strategy Success- McDonald’s is an example of a company that gained tremendous
benefits from globalization. Of course, it is largely due to the dual marketing plan of the company:
1.     Standardization strategy- Anywhere the company operates, it offers identical food products such as McFlurry, McNuggets,
McChicken, Happy Meal or Filet-O-Fish. The plan provides the company with a strong image. The strategy is a time and money saver for
McDonald’s as it helped build economies of scale.
2.     Adaptation strategy- The strategy can be compared to localization. With this strategy, McDonald’s adapts to the needs of the
consumers as required by the cultures of specific countries. Adaptation works very well for McDonald’s. The strategy enables the fast food
chain to have a wider reach worldwide. The strategy does require higher communication and production costs. Aside from the winning
strategies, the company’s marketing mix is likewise flexible, in order to tailor it to the local market requirements in terms of location of
distribution, promotions plans and pricing.
 McDonald’s is able to adapt its menu and business plans to each culture. It shows that it respects the differences between cultures and
adheres to the country’s policy when they develop additional items for their menu. The company does product tests and experimentation
through the addition or removal of food items based on local trends and popularity among consumers.
 In the U.S. McDonald’s offers McRibs for a limited time. In Japan, the Teri Tama Burger is a spring menu item while the Tsukimi Burger
is offered in autumn.
 The localized marketing plans work great for McDonald’s. For the Japanese market, it adjusts its name for katakana (used for foreign
words) by using the name Makudonarudo, which not only sounds attractive but also quite appropriate. Because the appetite of the
Japanese differs from the Americans, the serving sizes of burgers, fries and drinks in Japan are smaller.
 Mcdonald’s adaptation through collaboration and
innovation worldwide
 The company’s marketing research is exhaustive, providing it with all the means to engage and embrace a wide variety of
cultures while still maintaining its strong brand image. McDonald’s Golden Arches logo is easily identifiable wherever you go.
It’s very interesting how it adapts to different cultures, which is a valuable lesson in marketing. Here are some examples:
1. Germany- Because Germans love to eat meat, its burgers combine Nürnberger sausages with beef. And it’s a known fact that
Germans love their beer with food, so McDonald’s outlets in Germany also serve beer.
2. Indonesia- The majority of the population in Indonesia is Muslim, therefore, McDonald’s adapted to the eating needs of the
population by replacing pork with fish. McDonald’s outlets in Indonesia are Halal and since Indonesians prefer rice over
bread, they serve rice as well, together with some spicy meals that locals prefer.
3. Morocco- In Morocco, pita bread sandwiches are available. The outlets also use traditional spices such as coriander and
cumin. McDonald’s offers special menu for Ramadan. They call it f’tor (end of fasting) and the meal consists of a Big Mac,
milk, dates and traditional Moroccan soup.
4. Japan- Japanese cuisine is very different from the rest of the world. In the initial stage, McDonald’s in Japan retained the
menu for the U.S. market. But slowly it replaced and added menu items to cater to Japanese preferences. The company
introduced Green Tea ice cream, Rice Burger, Seaweed Shaker and Teriyaki Burger. The Japanese McDonald’s franchise also
added shrimp burgers, shrimp nuggets, milkshakes flavored with green tea and breakfast meal with hotdogs, mustard,
ketchup and relish.
5. Switzerland- The McRaclette is only served in McDonald’s outlets in Switzerland. It is a beef sandwich with raclette cheese,
unique raclette sauce, onions and gherkin pickles.
McDonald’s Presence In Different Countries
 As a global brand, it is understandable that McDonald’s present worldwide. According to the
company’s website, it operates in 101 countries as of January 2018, serving 69 million consumers
each day. It employs 1.9 million people. Its revenue reached $22.8 billion in 2017.
Achieving Global Adaptation
 A global brand like McDonald’s is able to achieve global adaptation successfully by hiring the best
people for the job. Thorough market research, detailed and objective analysis and planning should
go together to ensure complete knowledge of the market and consumers. There should be potential
demand, assessment of various issues, from cultural, economic, legal, work practices and import
guidelines. Localization is vital for a global company to ensure that it adapts to the local market,
which McDonalds has done very well. Effective communications is essential. Thus a global
company should work with a professional translation services provider, to ensure the accurate
translation of documents, including advertising and marketing slogans and menus.  
 MCDONALD’S IN INDIA
Demographic analyses of India in the 1990s showed that less than 8% of India’s population could
possibly be targeted by McDonald. The key reasons for such a low target group were-McDonald’s
focus on the urban market where less than 30% of India lived, the low income levels in India which
would make McDonald’s unaffordable to most, and food habits in India that would take years to
transform to western tastes. Although the Indian economy opened up in 1991, entry into many
sectors was controlled by the government with restrictions on Multi National Company (MNC)
operations and investments. The infrastructure in the country was under developed especially the
roads and the power sectors. There were many pressure groups in the country opposed to foreign
investments, and a socialist or Swadeshi mind set prevailed in many sections of society in the early
nineties.

In October 1996, McDonald’s opened its first Indian outlet in Vasant Vihar, an affluent residential
colony in New Delhi. As of November 2004, McDonald’s has opened a total of 58 restaurants,
mostly in the northern and western part of India. While McDonalds’s opened 34 restaurants in 5
years (by 2001), 58 restaurants in eight years (by 2008), it is now planning to add more than 90 new
restaurants in 3 years.
McDonald’s Road Map for India
Emphasis on Local Management

McDonald’s has given the adage “think global, act local”, a concrete shape in India. The company’s
localization strategy is clearly manifest in the critical area of management. McDonald’s decided to set up two
joint ventures on a 50:50 basis with two local entrepreneurs in Mumbai and Delhi. In Mumbai, Amit Jatia’s
company, Hardcastle Restaurants Private Ltd, was selected to manage western region. In Delhi, Vikram
Bakshi’s Connaught Plaza Restaurants Private Ltd was chosen to own and manage restaurants in northern
region.

“Politically Correct” Strategy

McDonald’s was faced with two challenges of the Indian Market:
1. How to avoid hurting religious sensibilities of the Indian consumers;
2. How to avoid political confrontation with the Indian government and political activists?

Since India is majority Hindu, revere cows as sacred and 150 million of Indian Muslims do not eat pork, beef
and pork have been a “complete no-no” from the start. Instead, McDonald’s intorduced a mutton based
“Maharaja Mac” in India, as opposed to its flagship beef-based Big Mac elsewhere. Other items- McAloo
Tikki Burger- were added too.
 Green Sensitivity

In India, there is a vocal group of environmental and animal activists who oppose the entry of fast-food chains like
KFC and McDonald’s. According to the campaigns, junk food of these chains destroy ecological balance and cause
severe behavioral disorders because of their fatty and unhealthy foods. To counter such negative campaigns, it has
instituted a special fund to support green movements in India. In Mumbai, it sponsored various community- related
activities- such as “Keep your city clean”. McDonald’s has pledged to help one million people gain new skills and
open the door to jobs by 2030, including introducing a youth worker into every restaurant by 2024 and supporting
3,000 apprentices by 2025.

 Pricing

In 1996, to penetrate the market in New Delhi, McDonald’s set their price by studying a local food chain (Nirula).
McDonald’s pricing decision involves analysing of demand, competitor pricing, costs, a product’s life-cycle and
balancing quality with value.
Back in September 2009, McDonald’s reduced its menu prices by almost 25% specifically for its lunch and dinner.
McVeggie and McChicken also decreased to Rs. 85 from Rs. 110 and 120 respectively. Lowering prices in such times
was surprising and did not make sense. However, the management in India believed that adjusting its menu prices
would help customers choose McDonald’s as a lunch and dining destination as well.
The major reasons for McDonald’s India’s success:
System – they had an effective and efficient system in place that exploited the minimum wage labour available;
they employed young teenagers who are just looking to make some money and get basic job skills
Convenience – their store is everywhere; found in major shopping centres, district, freeway, highway, and at
almost every corner
Familiarity – the associations with the Golden Arches, the Big M, Ronald McDonald, happiness and fun
Menu – they have the most diverse menus; it targets all ages from kids, middle-aged to grandfathers/mothers

Conclusion
Overall McDonalds has come a long way. From facing constraints including beef ban, lack of poor infrastructure
and storage, vegetarian population, political issues, to becoming the most preferred fast food brand, it surely has
won the hearts of Indians. It is widely accepted because of its affordable price, quality standards and adhering to
the cultural aspects of the nation. It has done everything to establish itself in the Indian market. Now, it is one of
the most loved fast food places for families, employees, college students and even old generation. It has
successfully targeted all the age groups.
McDonalds has already won the trust of customers, all it has to do is keep updating itself according to the recent
trends and changes to adapt it to the changing markets and keep on gaining profits.
ANALYSIS OF THE
FAILURE OF THE
COMPANY FORD
By-
Bhawna Gautam
(A3221519250)
Soumya Sharma
(A3221519265)
 FORD INDIA
• Ford India Private Limited is a subsidiary of Ford Motor Company for its operations in India. Ford India Private Limited's
headquarter is located in Sholinganallur, Chennai, Tamil Nadu. Ford also has integrated manufacturing facilities in Sanand, Gujarat.
After the entry into Indian market, Ford has spent more than $2billion dollars. Ford has now decided to move out of Indian market
as it failed to catch up pace with the competition and other global economic factors that led to reduction in demand.
• Ford India Private Limited began production in 1926 as a subsidiary of the Ford Motor Company of Canada. The initial Ford India
company was liquidated in May 1953 as a result of severe import restrictions having been enacted.
•  Ford re-entered the Indian market in October 1995 as Mahindra Ford India Limited (MFIL), a 50-50 joint venture with Mahindra
& Mahindra Limited. Ford increased its interest to 72% in March 1998 and renamed the company Ford India Private Limited. The
total investments made by Ford Motor Company since it set shop in 1995 stands at $2 billion as of April 2012.
• To enhance affordability, Ford has introduced many pioneering initiatives such as Service Price Promise, which allows customers to
calculate their vehicles’ periodic maintenance cost even before booking the service. Ensuring customer convenience, Ford has
appointed Retail distributors to sell Ford Genuine parts across the country.
• In 2019, the company started talks with Mahindra & Mahindra to establish a new joint venture, but as of April 2021, those plans
had been cancelled.
• In September 2021, the company announced its intent to end all domestic manufacturing in India. However, CBU units like
the Ford Mustang will still be imported to India.
 Two Different Automakers But Ford’s failure, Hyundai’s dream run…

• Both Ford and Hyundai has started their venture in1996 and Hyundai was not at as a known as
of Ford . And 25 years later, the story is very different. Hyundai Motor India has grown to become the
second largest player in the country.
• Companies like Maruti and Hyundai Motor are focused on launching new models, or variants
of their existing cars at regular intervals, while Ford had long gaps between new launches, to
its disadvantage. For example, by the end of 2022 Maruti and Hyundai are planning to launch
eight and nine models, respectively. On the other hand, Ford has a total of just three cars
planned in the same time period.
• Hyundai has the second-largest share of the Indian car market and is another example of a
foreign auto maker that managed to crack India with its strategy of offering more features than
Maruti at a slightly higher cost.
• Ford also failed at widening its network of service centers in India, with smooth after-sales
service a key consideration for many Indian buyers when picking a car.
 How Did Ford Motor Company Fail in India?

• India is a very different market compared to the US where size and engine power matter the
most. Indian consumers prefer fuel efficiency, low cost of ownership and re-sale value.
• Ford understood that a bit late. It is also guilty of taking Indian consumers for granted. Its first
car in India was Ford Escort, a product that was consigned to scrap yards in other markets
• It was under-powered too and failed miserably. It caused a bad first impression among the
customers.
• In 2019, Ford announced an alliance with another Indian automaker, Mahindra & Mahindra,
aiming to cut costs for developing and producing vehicles. However in 2020, the partnership
collapsed and Ford decided to go solo in emerging markets, including India . The gamble to go
solo clearly did not play out well for Ford.
 Changes That Resulted In The Failure For Ford Motor Company.

The probable reasons are adverse circumstances, reluctance to redress the complaints of consumers and dearth of good
leadership.

• Firstly, Mahindra washed its hands off. With Ford Motor Company taking over 72 per cent ownership. Mahindra,
which still does not have a good car, made attempts to retain the relationship with Ford. Even though Mahindra,
which still does not have a good car, made attempts to retain the relationship. Ford was left alone.
• Secondly, bad publicity about high maintenance cost. While the cars are best, it is difficult for many Indians to afford
the high cost for maintenance and spare parts. There were similar problems in the beginning. Though there were
attempts at some rectification, it didn't come to the notice of the common man.
• Thirdly, the intense competition in the market. Ford could not put up with stiff competition. When they realised that
it was difficult to hold on for long with Ecosport and Endeavour, Ford failed to introduce new models in the market.
• Fourthly, lack of leadership and tactics. Ford did not have a vibrant leadership in the last days.
• Fifthly, drastic setback in exports. Ford which is the biggest car exporter of India had recorded 65 per cent drop in
exports last year. The demand for models manufactured in India came down in Europe and America and COVID-
related factors also contributed to the crisis.
• Sixthly, loss. Ford India has incurred a loss of $200 crore during the last decade. Ford, on the other hand,
struggled to get its product strategy right.

• A much larger investment and continued poor volumes meant that losses began to pile up. Ford tried to align
with other manufacturers like M&M but that did not work.

• With India not becoming a manufacturing hub for it, Ford chose to pull the plug and cut its losses. It forgot the
basic premise of business success ,put consumers at the centre of the decision making and paid the price for it.
 Conclusion

• From the information available about the company Ford, we can conclude that in the past years
there have been certain internal activities that have contributed to such a step being taken.
• As mentioned above, the company has taken many initiatives in the past some years, like doing a
tie-up with Mahindra, to regain the consumer trust and rebuild the company. However, it is quite
evident that they failed to do so.
• A few of their cars like the eco-sport or Endeavour have performed really well but that’s not
enough for a company to survive.
• It was also observed that they incurred a lot of laws upon the investment that they have made in
India so far. They also couldn’t compete with the other companies in India and hence, the only
feasible step for them was to stop the manufacturing activities.