Seminar: McDonald’s in India

Topic Number: 14

Principles of Business

Overview

In 1996, McDonald’s opened its first restaurant in India in a bid to capitalise on the huge potential of this marketplace. Since then they have been on a significant growth trajectory opening hundreds of stores across India. However, their path was not easy and they have learnt a number of significant lessons along the way about launching into an international market such as India.

In this seminar, we will explore how McDonalds was able to move into the Indian market and achieve profitability. We will initially look at the economic and political rationale for McDonalds to enter the Indian market. This will be followed by an analysis of their roadmap into India.

We will explore how they developed their strategy looking particularly at how they overcame a number of cultural sensitivities they were faced with. Finally, we will explore why they positioned themselves as a family and child centric restaurant in India.

3

Learning outcomes of this seminar

• Determine and describe the economic and political rational for McDonalds to enter the Indian market

• Articulate their roadmap to launch and grow

• Critically evaluate and articulate how they overcame a number of cultural sensitivities they encountered

• Justify why they positioned themselves as a family and child centric restaurant in India

Agenda for this seminar

Explain the steps they took to overcome a number of these cultural sensitivities

Critically evaluate how they positioned themselves as a family and child centric restaurant in India

Explain the roadmap and key considerations McDonalds had when moving into India

Explain the economic and political circumstances that attracted McDonalds to India

Structure for the session

You will have 15 minutes to

discuss each question

We will have a de-brief at the end of each 15 minutes to hear your thoughts on each area

Feel free to ask questions but please do not have separate conversations ‘we are all in

this together’!

McDonald’s in India: The Skeptics

India has a very ancient food culture. We are not going to

change to American patterns of consumption. McDonald's will never become part of mass

culture in India because most people can't afford to eat there

Vandana Shiva, Director of the Research Foundation for

Science, Technology and Ecology

And yet…

…So why have they been successful?

View video: http://www.youtube.com/watch?v=8TbiaEuAReE

Explain the economic and political

circumstances that attracted McDonalds

to India

Economic Liberalisation in India: Start of the McDonalds journey

Economic liberalisation is generally defined as the loosening of government regulations in a country to allow for private sector

companies to operate business transactions with fewer restrictions. In relation to developing countries, this term refers to opening of their

economic borders to multinationals and foreign investment.

Why did this happen in India in 1991?

A balance of payments crisis in 1991 which pushed the

country to near bankruptcy

India central bank had refused new credit and foreign exchange reserves had

reduced to the point India couldn’t finance 3 weeks

worth of imports

The Rupee devalued and economic reforms No FDI & FII Investments

India’s Economic Profile

Source: i-pri.org

India’s Economic Profile

Source: www.csumba.org

Explain the roadmap and key

considerations McDonalds had when

moving into India

Key Milestones

Source: McDonalds, 2014

Key Milestones

Source: McDonalds, 2014

Key considerations – Emphasis on local management

Source: The Times of India, 2013

Key considerations – Politically Correct Strategy

How to avoid religious sensibilities?

How to avoid political confrontations?

Source: McDonalds, 2014

Key Considerations – Equal Employment

Source: McDonalds, 2014

Key Considerations – Giving Back

Go Green Traffic Safety

Civic Voting World Children Day

Illustrations: Wikipedia, 2014

Explain the steps they took to

overcome a number of these cultural

sensitivities

McDonalds in India: McProduct

Source: McDonalds, 2014

McDonalds in India: McPrice

Source: McDonalds, 2014

McDonalds in India: McPlace

Source: McDonalds, 2014

McDonalds in India: McPromotion

View video: http://www.youtube.com/watch?v=21wsqNqqqsg

McDonalds in India: McPromotion

Source: McDonalds, 2014

Critically evaluate how they positioned

themselves as a family and child

centric restaurant in India

McDonalds The Family Restaurant

Source: McDonalds, 2014

What makes India unique?

Focus on extended family

Children center of household

Busy professionals

Source: McDonalds, 2014

Family Initiatives

Source: McDonalds, 2014

Family Initiatives

Source: McDonalds, 2014

End of Seminar

Note: This recording is for your personal use only and not for further distribution or wider review.

© Pearson College 2013