McDonald’s in India

Jugal Thakkar 10DM-067

Karan Agarwal 10DM-072
Komal Tehlan 10DM-078
Kritika Bhargava 10DM-
080
Prajnasmita Rout 10DM-078
Karan Agarwal 10DM-131
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 About McDonald’s
• Started in 1940, with a restaurant opened
by brothers Richard and Maurice
McDonald in San Bernardino, California
• Ray Kroc in 1955, founded the McDonald’s
Corporation, and 5 years later bought the
exclusive rights to the McDonald’s name.
By 1958, McDonald’s had sold its 100
millionth hamburger

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 About McDonald’s
• Vision : uniformity of services and
standards across the globe
• Philosophy : principle of 3-legged tool –
one leg McDonald’s, second, the
franchisees, third the suppliers
• World’s Leading food service retailer
• 31,000 restaurants in 119 countries
• Serves more than 50 million customers
each day

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Reasons for Franchise
• Resolves the problem of
monitoring and the cost thereof
• Franchisee invests his own money,
hence maximizes profits and
indirectly enriches the chain
• franchising does not involve capital
• establish an effective distribution
network as quickly as possible

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Why is India a favorable destination?
• Huge Sub-continent
• 4 times the population of the US
• Middle Class estimated at 300 Million
• Per Capita GDP $ 400- but at PPP- $2540
4th largest economy- ahead of France,
• Russia, UK, Asia’s 3rd largest-Behind China & Japan
• Size of ‘Eating Out’ market- substantial
• India’s food expenditure- $77 Bn / world $ 4000
Bn (2%)
• Highly fragmented food market
• Millions of roadside stalls / carts- major market
share
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Entry into the Indian Market
• Only < 10% population-possible target market
• “We want to first concentrate on metros, then open
branches in other cities. We want to set up outlets only
in cities where we can ensure the quality of products”
• Phase I- Focus on cities of relatively high incomes
where citizens are exposed to western food & culture
• Phase II- Move to smaller satellite towns (Gurgaon,
Pune)- Positive spillover effect of reputation; Jaipur &
Agra- To attract foreign tourists
• Phase III- Malls, Multiplexes, Highways, Stations &
airports

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McDonald’s in India
• Launched in 1996
• Joint venture company manged by
• Amit Jatia – MD Hardcastle Restaurants Pvt
Ltd – owns and spearheads McDonalds in
west and south India
• Vikram Bakshi – Connaught Plaza Restaurants
Private Limited – owns McDonald’s in north
and east India
• Has completed 12 Years in India
• Over 160 restaurants

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McDonald’s in India
• It took four years to develop its unique
cold chain management system which
has brought about a veritable revolution
in food handling, immensely benefiting
the farmers at one end and enabling the
customers to get the highest quality of
products, absolutely fresh and at a great
value

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Local Sourcing is the Key for Truly
Indian Products
• All products sourced from within the
country
• Has developed local Indian
businesses that supply the highest
quality of products required
• For eg : fresh lettuce – Pune, Delhi,
Nainital, Ooty
• All suppliers – HACCP certified

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Respect for Indian customs and
culture
• Vegetarian menu to suit Indian tastes and culture
• First country where McDonald's doesn’t offer beef or
pork products keeping in mind the customs
• Re-engineered its operations to address special
requirements of vegetarians
• Vegetable products are prepared separately, using
dedicated equipment and utensils
• Separation of vegetarian and non vegetarian products is
maintained throughout various stages of procurement,
cooking and serving.
• Only vegetable oil is used as the cooking medium

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Employer of Opportunity
• Average McDonald’s restaurant
employees 50-60 employees from
crew to restaurant manager
• Has world class training inputs
• Currently employees 4000 Indians

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Quality, Service, cleanliness and
Value QSC&V
• Menu priced at a value that the
largest segment of Indian
consumers can afford
• Leverages economies to
minimize costs while maximizing
value to customers

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Community Partnership
• Children’s painting competition across cities
Maintaining gardens, parks, heritage structures
Effluent treatments, Pulse Polio, recyclable paper
bags
• ‘Litter Patrols’ to ensure a cleaner neighborhood.
• Huge donations to Latur/ Bhuj / Gujarat
earthquakes
• Co-Sponsor of Inter-School Science Quiz
Competition.
• 2002, tie up with Nalanda Foundation - education
of the underprivileged Girl-Child

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Supply Chain Management

• Spent 6 years and Rs. 450 Crore to set up

the food supply chain before opening its
first restaurant in the country
• Has pioneered the cold chain
management system whereby saving
food losses due to wastage at various
levels, especially due to lack of proper
infrastructure for storage and
transportation

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 Potato farming in Gujarat – sourcing the right potato –
• McCain Foods Pvt Ltd partnered McDonald’s to work with farmers in
Gujarat (especially the towns of Deesa and Kheda) to interact with
agronomists and field assistants to demonstrate best practices – irrigation
systems, sowing seed treatments, planting methods, fertilizer application,
storage methods etc
• Farmers benefit through incremental monetary gains

Radhakrishna Foodland – Distribution Partner –

•Has facilities and infrastructure specifically created for
McDonald’s requirements and has adopted new systems to
satisfy McDonalds demands
•Distribution Centre (DC) – responsible for procurement,
quality inspection program, storage, inventory
management, deliveries to restaurants and data collection ,
recording and reporting – ensures that products that arrive
at McDonald’s restaurants from suppliers all over India are
fresh and as per quality standards
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Trikaya Agriculture – supplier of fresh iceberg lettuce
Has introduced new farming techniques and widened
geographic areas of production. Agricultural suppliers to the
companies employ most current farming practices – resulting
in better cropping patters, greater yields, higher farm income
and increased jobs in rural farming sector.

Vista Processed Foods Pvt Ltd – supplier of

Chicken and Vegetable products –
Has world class infrastructure and support
services – hi tech refrigeration plants for
manufacture of frozen foods, cold storage
rooms, latest food processing technology,
both vegetable and chicken lines are
segregated.

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Dynamix Dairy – Supplier of Cheese
In Baramati, Maharashtra – dedicated quality
program for milk procurement and invested
significantly in setting bulk coolers at all milk
collection centers in Baramati area, at accessible
locations. Also, electronic testing and measuring
instruments are provided at these facilities to
maintain quality standards. Dedicated R&D to
educate milk producers with latest equipment in
modern dairy has also been put into place.

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Production Adaptation
• Product Adaptation-The Indian Challenge
• Much higher degree of adaptability
• 40% Vegetarians –Vegetarian selections to suit
• Indian taste
• Maharaja Mac replaced Big Mac, Chicken Patty
• instead of Beef
• Respect for local culture- Special Indian menu,
• No beef or pork items in India
• McAloo Tikki Burger, Veg Salad Sandwich,
McMasala

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Production Adaptation
• Common Menu- Chicken Nuggets, Fillet-O- Fish,
fries, sodas, shakes
• Garlic free sauces to get in “hard core”
vegetarian customers
• Re-formulated own products using spices favored
by Indians
• Eggless sandwich sauces, Soft serves & McShakes
• Freshest chicken, fish and vegetable products
Only vegetable oil used as a cooking medium

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Challenges faced by McDonald’s in
India
• Grim power situation in Delhi, Bangalore
• Economic problems :, deregulation since
1991, but swadeshi mindset continues. MP
comments on MNC sector :we want
computer chips, not potato chips
• Pressure group
Anti- Western / MNC factions
Health activist
Animal welfare activists
• Beef controversy in the year 2000
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 Prospects
• As the standard of living and purchasing power is
increasing in smaller towns as well, McDonald’s
can look towards these untapped markets
• With the maximum population between the age
of 15 to 35, and their shift towards globalization,
the target market is increasing
• McDonald’s can look towards building
collaborative relationships with major players
providing complementary services
• McDonald’s can look at the options of opening
food carts

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 I’m lovin’ it

Thank You!

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