Mcdonalds_in_India

MC DONALD’S CASE Introduction: What is Mc Donald’s' It’s a chain of fast food restaurant introduced in 1940 by Dick and Mac McDonald and expanded and modified by Ray Kroc. The based values of McDonald’s is serving products to its customer with good quality, fast, clean and very well controlled from the first part of the production’s chain [Quality, Service, Cleanliness and Value (QSC&V)]. To clear it, as last part of the chain, McDonald’s guarantees to the customers that the products served had a series of norms defined by the company in order to quality and food safety satisfaction. For example; The Big Mac burger is made by a specific process. The bread has to be toasted for 30 seconds at 218 degrees and the meat for 43 seconds at 177 degrees. These standards are imposed by the company which hires partners to control them. A lab company controls the food safety at twice in a month for each restaurant. A mysterious company checks if the service values are met. The job of McDonald’s is to reach daily the objectives fixed by the company. And these values are the same all over the world. In India, in the United States or in France. The only difference between McDonald’s in these countries, for instance, is the adaption of some products relative to the country’s culture. History: Introduced by Dick and Mac McDonald, McDonald’s started like a barbeque typical drive-in featuring a large menu and car hop service. In 1948, the barbeque was closed during 3 months to renovation and the original menu was applied with burgers, French fries and milk-shakes for 15 cents. The McDonald's concept was introduced in San Bernardino, California and it was modified by their business partner Ray Kroc who later bought out the business interests of the McDonald's brothers in the concept and went on to found McDonald's Corporation.; for red color and white tiled building with the Golden Arches reproduced by the architect Stanley Menson in 1953; and expanded over the United States. The University of Hamburger was open 1961 in the McDonald’s restaurant’s basement. Graduates receive Bachelor of Hamburgeology degrees. Hamburger University has emphasized consistent restaurant operations procedures, service, quality and cleanliness. It has become the company’s global center of excellence for McDonald’s operations training and leadership development. February 24, 1961, Hamburger University's first class of 14 students graduated  • Today, more than 5,000 students attend Hamburger University each year  • Since 1961, more than 80,000 restaurant managers, mid-managers and owner/operators have graduated from this facility At McDonald’s, the training mission is supposed to be the best talent developer of people with the most committed individuals to Quality, Service, Cleanliness and Value (QSC&V) in the world. Its strong commitment to the training and development of the People has resulted in many “firsts” and honors, including being… • The first restaurant company to develop a global training center • The only who has received college credit recommendations from the American Council on Education (ACE), the United States’ oldest and most recognized unifying body for higher education • Continually recognized for excellence in training Ray Kroc once said, “If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent.” Hamburger University continues to promote that philosophy, everyday. From its initial roots, today McDonalds is a powerhouse of the food service retailer industry. With over 30,000 restaurants spread around the globe, McDonalds serves in excess of more than 52,000,000 people in over 100 countries each day. In addition to this they hold the leading share in the globally branded quick service segment of the fast food industry. Global Environment – PESTEL POLITICAL ENVIRONMENT : ← The armed forces have to be kept prepared and well equipped to repel any external threat ← Political activists were coming in front of McDonald’s to criticize their menu against vegetarians, as a result, McDonald’s added to the menu the tantalizing ‘McAloo Tikki’ Burger (breaded potato and pea patty) to lure India’s middle class and political activists ← Human Right/Trade Union ← Availability of real estate is crucial for success in the retail business. Getting quality real estate was an issue. McDonald's either does outright purchase or enters into long lease of 25 years. Rent control laws, housing societies unwilling to enter into long term leases and required clearances from multiple authorities made acquisition of real estate a difficult proposition ← At the federal level, India is the most populous democracy in the world. While many neighboring countries witness frequent coups, Indian democracy has been suspended only once. ← Nevertheless, Indian politics is often described as chaotic. More than a fifth of parliament members face criminal charges. ← As with many developing nations, corruption is widespread in India (India is ranked 85 out of a 179 countries in Transparency International’s Corruption Perceptions Index). Corruption has taken the role of a pervasive aspect of Indian politics and bureaucracy ← At the federal level, India is the most populous democracy in the world. While many neighboring countries witness frequent coups, Indian democracy has been suspended only once. ← Nevertheless, Indian politics is often described as chaotic. More than a fifth of parliament members face criminal charges. ← As with many developing nations, corruption is widespread in India (India is ranked 85 out of a 179 countries in Transparency International’s Corruption Perceptions Index). Corruption has taken the role of a pervasive aspect of Indian politics and bureaucracy ← At the federal level, India is the most populous democracy in the world. While many neighboring countries witness frequent coups, Indian democracy has been suspended only once. ← Nevertheless, Indian politics is often described as chaotic. More than a fifth of parliament members face criminal charges. ← As with many developing nations, corruption is widespread in India (India is ranked 85 out of a 179 countries in Transparency International’s Corruption Perceptions Index). Corruption has taken the role of a pervasive aspect of Indian politics and bureaucracy ← Problems with real state ECONOMICAL ENVIRONMENT: The economy of India is the twelfth largest economy in the world by market exchange rates and the fourth largest by purchasing power parity. The gross domestic product (GDP) is a basic measure of a country's overall economic performance. It is the market value of all final goods and services made within the borders of a country in a year. It is often positively correlated with the standard of living though its use as a stand-in for measuring the standard of living has come under increasing criticism and many countries are actively exploring alternative measures to GDP for that purpose. ← The GDP of India is 1,237,000 (last estimated in 2008) ← The GDP (Purchasing Power Parity) is estimated at $3.297 trillion U.S. dollars in the year 2008 ← The GDP- real growth rate in India in 2009 is 6.1% ← The GDP per capita in India in 2008 was 1100 ← Unemployment rate in India: 6.8% in 2008 ← Inflation rate in India: 8.3% ← Foreign direct investment rose to about $16 billion from just $5.5 billion ← India’s per capita income is expected to reach 1000 dollars ← Corruption in India ← Hindu rate of growth is a controversial and derogatory expression used to refer to the low annual growth rate of the economy of India before 1991, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%The slow India growth rate is better attributable to India's government regulatory policies (sarcastically called Licence Raj) rather than to a specific religion or to the attitude of the adherents of a particular religion. The economy was characterized by extensive regulation, protectionism, and public ownership, leading to pervasive corruption and slow growth. Since 1991, continuing economic liberalization has moved the economy towards a market-based system. A revival of economic reforms and better economic policy in 2000s accelerated India's economic growth rate. By 2008, India had established itself as the world's second-fastest growing major economy. However, the year 2009 saw a significant slowdown in India's official GDP growth rate to 6.1% GDP Composition by sector in 2008 was 53.4% Service, 29% Industry and 17.60% Agriculture and the labor force which was 523.5 million in 2008 was divided into 60% Agriculture, 28% Service and 12% Industry. SOCIAL-CULTURAL ENVIRONMENT: ← India Population: 1,166, 079,217 in July 2009 ← Age structure: • 0-14 years: 31.1% (male 190,075,426/female 172,799,553) • 15-64 years: 63.6% (male 381,446,079/female 359,802,209) • 65 years and over: 5.3% (male 29,364,920/female 32,591,030) (2009 est.) ← Population Growth rate: 1.548% in 2009 ← Muslims populate the world, representing 23% of an estimated 2009 world population of 6.8 billion. With 60% in Asia and 20% of Muslims living in the Middle East and North Africa ← Muslim people don’t eat meat, pork In India, religions are divided by Hindu which are 80.5% of the population followed by Muslim 13.4%, Christian 2.3%, Sikh 1.9% and others 0.1%. Many Hindus embrace vegetarianism to respect higher forms of life. Vegetarianism is propagated a satvic (purifying) lifestyle. Estimates of the number of lacto vegetarians in India (includes adherents of all religions) vary between 20% and 42%.The food habits vary with the community and region, for example some castes having fewer vegetarians and coastal populations relying on seafood. Some Hindus avoid onion and garlic, which are regarded as rajasic foods. Some avoid meat only on specific holy days. Observant Hindus who do eat meat almost always abstain from beef. The cow in Hindu society is traditionally identified as a caretaker and a maternal figure and Hindu society honors the cow as a symbol of unselfish giving. ENVIRONMENTAL: ← The rapidly growing population and economic development are leading to the environmental degradation in India through the uncontrolled growth of urbanization and industrialization, expansion and massive intensification of agriculture, and the destruction of forests. ← Water shortages, soil exhaustion and erosion, deforestation, air and water pollution afflicts many areas. ← Downstream, the untreated water is used for drinking, bathing, and washing. ← Indian cities are polluted by vehicles and industry emissions. Road dust due to vehicles also contributing up to 33% of air pollution TECHNOLOGICAL ENVIRONMENT: ← The effect of the technologically inclined services sector— which includes the IT industry in India—accounting for 40% of India's GDP and 30% of export earnings as of 2006, while employing only 25% of its workforce. ← The share of IT (mainly software) in total exports increased from 1 percent in 1990 to 18 percent in 2001. LEGAL ENVIRONMENT: ← Cow-slaughter is legally banned in almost all states of India except in two states: the states of West Bengal and Kerala. Cows are routinely shipped to these states for slaughter, even though it is illegal to transport cows for slaughter across provincial borders. However, many illegal private slaughterhouses also operate in big cities such as Mumbai. While there are approximately 3,600 slaughterhouses operating legally in India, there are estimated to be over 30,000 illegal slaughterhouses. The efforts to close them down have so far been largely unsuccessful. ← Licence Raj, also the Permit Raj refers to the elaborate licences, regulations and the accompanying red tape that were required to set up and run businesses in India between 1947 and 1990.The Licence Raj was a result of India's decision to have a planned economy where all aspects of the economy are controlled by the state and licences are given to a select few. Up to 80 government agencies had to be satisfied before private companies could produce something and, if granted, the government would regulate production ← Protectionism is the economic policy of restraining trade between states, through methods such as tariffs on imported goods, restrictive quotas, and a variety of other restrictive government regulations designed to discourage imports, and prevent foreign take-over of local markets and companies BEEF FRIES CONTROVERSY One person decided to ask the manager of McDonald’s in India if the was some beef in the oil for making the french fries, and the manager said yes, there is a little bit ← Mc Donald’s french fries contained beef (7% cottonseed oil and 93% beef tallow) ← Use vegetable oil to make the fries in the future ← Unique flavour ← How to keep the customers who were accustomed to beef-flavoured fries' SUPPLY FORCES: ← McDonalds had been working on its supply chain even before it opened its first joint in the country ← Special system: Cold Chain ← Local sourcing Suppliers : ← Trikaya Agriculture: iceberg lettuce ← Vista Processed Food: chicken and vegetable ← Dynamix Diary: cheese ← Amrit Food: UHT milk and frozen dessert Radhakrishna Foodland: distribution and cols storage(for Delhi and Mumbai) ← Mc Cain: French Fries SWOT ANALYSIS: STRENGHTS ← World known brand & logo ← Easily adapted products to different cultures ← Hamburger University/Training ← Global locations ← Assembly line style ← Serve well known brand name (like Nestlé, Heinz) ← Nutrition information (The first restaurant of doing that) ← Inspections checks for its food safety (more than 2000) ← Certified Suppliers WEAKNESSES: ← Less able to compete with fast food pizza chains ← High employes turn over led to money spent in training ← Capitalize on organic food ← Problems with fluctuations in operating and net profits ← Low product awareness and absence of infrastructure and supply chain OPPORTUNITIES: ← Top order & delivery system (Delivery based on computer less or more products) ← Upscale restaurant design (Same design everywhere, less money spent with architect) ← Allergen free food ← Possibility for workers to obtain stock options (every month employees can put 300 Euros with interests which goes to McDonald’s and they can have it for their marriage) ← Organic food (Big Mac with complete bread, 10% less calories) THREATS: ← Parents criticism ← Sued for having unhealthy food ← Documentary Super Size Me & M6 ← Any contamination of the food supply ← Competitors ← High investments and population couldn’t pay high prices ← No availability of real state MARKETING MIX – 4 P’s ← PRODUCT: ❑ Menu especially for India with vegetarian selections to suit Indian tastes and culture ❑ Vegetarian and non-vegetarian burgers ❑ Committed to source almost all of its products from within the country. ❑ McDonald’s does not offer any beef or pork items in India ❑ The sauces and cheeses are also 100% vegetarian ❑ Serves onlu Chicken and Fish in India ← PRICE: ❑ McDonald’s menu is priced at a value that the largest segment of the Indian consumers can afford. ❑ Price lower than Pakistan and Sri Lanka and 50% lower than the US ← PROMOTION: ❑ Prime focus is on targeting children with happy meals and toys ❑ Used Medias like TV Advertisements, hoardings, bus shelters, billboards ❑ Sponsor many TV programs like: ‘kaun Banege crorepati’, Children shows ❑ Uses 80-20 Menu boards (80% visual and 20% descriptive) ❑ Descriptions of the burgers on paper mat ❑ Collaboration by Coke, MTV, Hungana, Sony music ❑ Very cachy punch line « Aap ke zamane mein, baap ke zamane ke daam  » to attract middle and lower class consumers ← PLACE: ❑ McDelivery system MARKETING PLAN: ← McDonald's plans to open another 40 restaurants across India, bringing the total to close to 200 ← Expands its segmentation as it tries to lure the middle and low-income class ← Invests to renovate its restaurants that customer can surf web, download emai, image as well as listen to music while they are enjoying their McDonald Try to roll out new products at gain more new customers CONCLUSION: ← McDonald brand has a strong position in India market with the appearance in 30 cities. ← McDonald India is the leader in the fastfood market in India. ← McDonald has succeeded in adapting to India culture. RECOMMENDATIONS: ← MCDonald should primarily focuses on pricing in India. Try to cut price as much as possible to attract more customer from middle and low income class. ← Focus on the social and charity activities to help the children in India. ← Open Ronald McDonald House Charities in India. ← New products that adapt culture and taste of Indian ← Becareful with what you eat ← Try to eat less grease, less salty and make exercises often