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?
McDonald’s made a very meticulous and calculated entry into India. Instead of getting the first mover advantage, McDonald’s purposely delayed their entry into India. In the early 1990’s many of the U.S. based fast food chains made their entry into the Indian market with some of the more notable competitors being KFC and Pizza Hut. McDonalds deliberately postponed their entry until 1996 to research various aspects of the Indian market. Much emphasis of their research was placed on Indian consumer tastes, product development, and it’s supply chain.
The research that McDonalds did helped them execute a strategic plan of entry. This plan is summed up succinctly in their written strategy, “think global, act local.” As a part of their strategy McDonalds set up two joint ventures on a 50:50 basis with local entrepreneurs from Mumbai and Delhi. The West and South regions are managed by Hardcastle Restaurants (Amit Jatia) and the East and North regions are managed by Cannaught Plaza Restaurants (Vikram Bakshi). This localization strategy was imperative to adapting McDonald’s to the distinct Indian culture and allowed them to strengthen the back-end of the supply chain. In implementing the localization strategy they made a conscious effort to hire local people, purchase from local suppliers, architects, contractors, and materials when possible. Both their joint venture and localization efforts made it easier for McDonalds to be integrated into the Indian culture.
While McDonalds has been in India the company has been diverse with their pricing strategy. McDonald’s used a purchasing power pricing strategy which has allowed it to attract customers from all socioeconomic status.Vikram Bakshi, one of the Joint Venture