McDonalds in India

Topics: Supply chain management, Food processing, Food Pages: 2 (1225 words) Published: October 31, 2014

With India’s business environment showing potential for growth in the early 90s due to economic liberalization, population and income growth, MacDonald’s (MD) has adopted an international strategy by tapping into the market in India to expand their business. MD relative success has come from their willingness to ‘think global, act local’ in its transnational strategy, taking India’s macro-environment into consideration in carrying out their business. The 4 factors are as follow: Firstly, the main geographical consideration is the inefficient food chain between farmers and consumers. With about 20% of food production wasted mainly due to poor transport facilities and infrastructure, MD spent years setting up a well-established supply chain. Six years before opening its first outlet in India, MD has been working with local suppliers to develop products in greater yield and higher quality. MD does so by transferring its state-of-art food processing technology to suppliers. For instance, MD shared its advanced technology i.e. drip irrigation with Trikaya and post-harvest technology i.e. large cold storage facility. The installation of ERP software on Radhakrishna Foodland has allowed them to maintain tight ‘delivery-on-time’ schedules by anticipating demand in each outlet. Trucking fleet with different refrigeration installed has been set up to deliver multiple types of supplies within short notice. With meticulous supply chain management, MD has successfully minimized cost, increased quality control and achieved higher customer satisfaction. Improved transportation and food processing technology have served to increase India’s agricultural productivity and the profits of farmers which in turn lead to increased GDP in the nation. Also, MD chose to open its stores initially in Delhi and Mumbai regions to take advantage of richer population residing in these city areas and location of the 2 distribution centres in these 2 metros. This thus led to lower transaction...
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