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McDonald’s – Business Strategy in India

Case Study Abstract
This case study discusses how McDonald’s India managed to buck the trend in a struggling economy, its early years and business strategy to get more out of its stores in India. The case also briefly discusses how McDonald’s adapted to local culture in India, its localization and entry strategy, its strong supply chain and pricing strategy. Table of Contents

1.Introduction
2.McDonald’s entry into India
3.Exhibit I: McDonald’s – Country – Entry Year
4.The Indian Market – Top 10 per cent of the busiest markets globally 5.Localization Strategy
6.McDonald’s JV in India
7.Initial Challenges – ‘Culturally Sensitive’ Food
8.Understanding Indian Customs and Culture
9.An Indianized Menu, Re-engineered operations and no beef burger 10.Competition – Major Competitors in India and Globally
11.McDonald’s – Quick Facts
12.Time line of McDonald’s in India
13.Pricing Strategy – The Rs-20 trap and ‘Purchasing Power Pricing’ 14.Kiosks at store entrances for customers in a hurry
15.Home Delivery – McDonald’s Delivery Service or McDelivery 16.Out-of-home Breakfast – International McDonald’s format with local taste 17.McDonald’s Supply Chain Management (SCM)
18.Unique cold chain
19.Cutting costs
20.Exhibit II: McDonald’s Suppliers in India
21.Exhibit III: The Menu at McDonald’s India
22.Exhibit IV: McDonald’s – Early History and Growth
23.Exhibit V: Principles to McDonald’s business success
24.Questions for Discussion
Case Study Keywords: Fast-food Retailing, McDonald’s India, Joint venture, Amit Jatia, Vikram Bakshi, localization strategy, pricing strategy, McIndia, quick service restaurants, cultural adaptation, local culture, supply chain management, SCM, McDelivery, unique cold chain Case Questions for Discussion

1.McDonalds has become the poster brand for recession-resilient business. What is McDonald’s doing right in India? What elements of its business strategy are working for it and how does it manage to get more out of its stores? 2.Does local adaptation contribute to business growth in a country? Explain McDonald’s efforts to adapt to the local culture in India. What challenges did McDonald’s face in India? 3.Have you ever visited a McDonald’s store? Compare and contrast your experience with another quick-service restaurant or fast-food joint you visited earlier. How can McDonald’s improve? Should it alter its strategy? Case Updates/Snippets

World’s leading food service retailer – McDonald’s has more than 32,000 restaurants serving over 50 million customers each day in more than 119 countries. McDonald’s competitors in India – McDonald’s competes with fast food chains like Pizza Hut, Domino’s Pizza, Papa John’s, Nirula’s and KFC in India. McDonald’s Supply Chain – McDonald’s has a dedicated supply chain in India and sources 99% of its products from within the country. The company has strong backward integration right up to the farm level. Quick service restaurants in India – By October 2009, McDonald’s India had more than 170 quick service restaurants in India. Domino’s Pizza, which began operations in India in January 1996, has over 275 stores across 55 cities in the country. KFC has 46 restaurants across 11 cities in India. (KFC is one of the 5 brands owned by Yum!. KFC is a $12 billion global brand and a leading quick-service restaurant (QSR) in many countries.) Nirula’s, one of India’s oldest food chains (completed 75 years in service in March 2009), has a network of around 62 outlets in five states across Northern India. Nirula’s, established in 1934 has interests in hotels, restaurants, ice cream parlours, pastry shops and food processing plants. Nirula’s was the first to introduce burgers in India. Food Industry in India – In India, food industry and particularly informal eating out market is very small. In India, over quarter of a million customers visit McDonald’s family restaurants every day. The...
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