McDonald's - Business Strategy in India

Case Study

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March, 2009. © www.casestudyinc.com

 Table of Contents

1. Introduction ............................................................................................................................. 3

2. McDonald’s entry into India .................................................................................................... 4

2.1. Exhibit I: McDonald’s – Country – Entry Year ................................................................... 4
2.2. The Indian Market – Top 10 per cent of the busiest markets globally................................ 4

3. Localization Strategy............................................................................................................... 5
3.1. McDonald's JV in India ....................................................................................................... 5
3.2. Initial Challenges - 'Culturally Sensitive' Food.................................................................... 5
3.2.1. Understanding Indian Customs and Culture ...................................................................... 5
3.2.2. An Indianized Menu, Re-engineered operations and no beef burger ................................ 6

4. Competition – Major Competitors in India and Globally ......................................................... 7

5. McDonald’s – Quick Facts ...................................................................................................... 8

6. Exhibit II: Four Pillars of McDonald’s success in India ........................................................... 8

7. Timeline of McDonald's in India .............................................................................................. 9

8. Pricing Strategy - The Rs-20 trap and ‘Purchasing Power Pricing’ ...................................... 10

9. Kiosks at store entrances for customers in a hurry .............................................................. 10

10. Home Delivery - McDonald’s Delivery Service or McDelivery.............................................. 10

11. Out-of-home Breakfast - International McDonald’s format with local taste .......................... 11

12. McDonald’s Supply Chain Management (SCM)................................................................... 11

12.1. Unique cold chain ................................................................................................................. 12

13. Cutting costs ......................................................................................................................... 12

14. Exhibit III: McDonald’s Suppliers in India ............................................................................. 13

15. Exhibit IV: The Menu at McDonald’s India ........................................................................... 14

16. Exhibit V: McDonald’s – Early History and Growth .............................................................. 16

17. Exhibit VI: Principles to McDonald’s business success ....................................................... 16

18. Questions for Discussion...................................................................................................... 17

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“We are increasing our headcount to 7,000 from 5,000 at a time when most companies
are either cutting costs or reducing employee numbers. Currently, we do not see any
reason for raising prices of our food items as the commodity prices, especially edible oil
prices, have eased and our back-end supply-chain is strong enough.”
- Amit Jatia, JV partner & MD (west & south region), McDonald’s India in 2009.

“Having created a strong brand, McDonald’s can now monetize the time and footfalls
from its stores by increasing both the value purchase and incidence of purchase.”
- Purnendu Kumar, Associate Vice-President, Retail consultancy Technopak.

“In such an economic environment, it is better to be aggressive. It is the right business

thing to do. There are some disadvantages when you have a highly visible brand. But we
want to be leaders and the only way we can do it is to continue to invest in our stores.”
- Amit Jatia, MD, McDonald’s India on the expansion programme in 2001.

1. Introduction

Year 2008 and early 2009 saw the world in recession with economic growth slowing
down in most countries. Analysts felt that the global slump was so harsh that even no-
frills dining would feel the pinch if conditions did not recover. In such a scenario, when
most companies were either cutting costs or reducing employee numbers, McDonald's in
India planned to increase its headcount by 2000 people for its restaurant operations in
2009. McDonald’s runs 160 restaurants1 with 6,500 crew members and 650 store
managers in India (2008 figures) 2. The fast-food retailer even avoided increasing prices
in spite of mounting pressure on input costs in 2008. Its same store sales saw double
digit growth for the last five years. In 2009, McDonald’s India plans to open around 40
restaurants3. How does the company see value in expansion in a market ridden with
troubles?

“This is a great time for retailers mainly because the real estate prices have come to a
level wherein they are negotiable. Even high street locations have become affordable,”
says Amit Jatia, JV partner & MD. In the last quarter, from October to December 2008,
while exclusive restaurants saw a drop in business, McDonald’s grew 14 per cent. The
chain’s global sales exceeded analysts’ estimates and grew 7.1 per cent in January
2009. It’s revenue in Asia, the West Asia and Africa surged by 10 per cent. One of the
key factors was its initiative to improve sales, without stretching the infrastructure too
much.

Tim Fenton, McDonald’s president for Asia, the Middle East and Africa, even remarked
in an interview4 - “It’s a time to gain market share, we will not cut back on anything, we
will accelerate if anything.” This case study discusses how McDonald's managed to buck
the trend, its early years and business strategy to get more out of its stores in India. The

1
Barring two, they are all company owned.
2
McDonald’s on a hiring spree in India, Swetha Kannan, 05 March , 2009, Business Line, Sify.com
3
McDonald’s opened 30 restaurants in 2008 and 20 in 2007. The company invests Rs 100-120 crore year-
on-year on expansion plans.
4
McDonald's may accelerate Asia expansion, Bloomberg / Beijing February 13, 2009.

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case briefly discusses how McDonald’s adapts to local culture in various fast food
markets, its localization and entry strategy, its strong supply chain and pricing strategy.

2. McDonald’s entry into India

Fast-food retailer McDonald's with its chain of quick-service restaurants is regarded as

the largest fast-food retail network in the world. It has become a household name,
particularly for its burgers and French fries. After successfully opening stores in China,
McDonald’s began efforts to enter India in the early 90’s. While, the Indian market was
as big as China’s (almost 300 million consumers), the dawn of economic liberalization in
India was another factor prompting McDonald’s entry. The early 1990s saw a number of
U.S.-based fast food chains like KFC and Pizza Hut entering the Indian market.
McDonald’s delayed its entry into India until 1996. It spent the interim in researching
various aspects of the Indian market - planning, studying Indian consumer tastes,
product development, and supply chain. It opened its first outlet in 1996 in New Delhi. Its
first outlet in Bombay (now Mumbai - India's financial capital and its largest fast food
market, where competing outlets are often a few feet apart) caused a stir with crowds
lining up for days outside the restaurant to tuck into its mutton burgers and French fries.

2.1. Exhibit I: McDonald’s – Country – Entry Year

Country Entry Year

U.S. 1955
Canada 1965
Costa Rica 1970
Japan 1971
Singapore 1979
Russia 1990
China 1990
India 1996
Pakistan 1998

2.2. The Indian Market – Top 10 per cent of the busiest markets globally

The Indian industry is fragmented, with a few sizable national chains, hundreds of small
regional players and thousands of mom-and-pop operations. In India, McDonald’s began
operations over 12 years ago in 1996. India ranks amongst the top 10 per cent of the
busiest markets globally for McDonald’s. Each of the 155 stores has an average of 2,750
walk-ins and in all the stores serves 180 million customers every year. In 2006, the
company announced plans to invest roughly Rs 400 crore in expanding into the eastern
parts of the country alongside setting up 25 outlets in places such as Benaras, Amritsar,
Patiala, and Kolkata among other tier-II cities. In 2007, the company announced plans to
invest Rs400 crore in next three years to increase presence in the smaller towns and
cities and was looking at doubling its sales every three years. McDonald's also planned
to introduce the McCafes concept in India in 2007.

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3. Localization Strategy

3.1. McDonald's JV in India

Traditionally, McDonald's operates with local partners or local management in each

country it sets up its stores. McDonald’s strategy is to think global and act local. This
was evident when McDonald’s decided to set up two joint ventures on a 50:50 basis with
two local entrepreneurs5 in Mumbai and Delhi. The company clearly chose business
plans underlining India-centric management strategies. For west and south India,
McDonald's India is a 50:50 joint venture between McDonald's and Hardcastle
Restaurants – (Amit Jatia, JV partner & MD). For east and north India, the food retailer
has a tie up with Vikram Bakshi's Cannaught Plaza Restaurants. Amit Jatia and Vikram
Bakshi are responsible for running McDonald's in India. In the past five years,
McDonald’s made a joint investment of around Rs 1,000 crore. This includes investment
in strengthening back-end supply-chain6 to ensure uninterrupted supply of inputs.
McDonald’s also employs local people in its restaurants, purchases from local suppliers
and constructs its restaurants using local architects, contractors, labor and - wherever
possible – local materials.

Region 50:50 joint venture with

Hardcastle Restaurants
West and South India
(Amit Jatia)
Cannaught Plaza Restaurants
East and North India
(Vikram Bakshi)

3.2. Initial Challenges - 'Culturally Sensitive' Food

3.2.1. Understanding Indian Customs and Culture

Two key initial challenges facing the company in India were how it could avoid hurting
religious sentiments and political confrontation. Typically, McDonald’s has been a target
for anti-Americanism7. Foreign-based fast food chains like KFC had faced trouble earlier
(in 1996) with politically organized agitations8. In 2001, analysts feared that McDonald's
chain of 30 restaurants (which occupied prime space in the main cities of Bombay and
Delhi) could be vulnerable to protestors seeking to vent their anger on the United States
over war in Afghanistan. McDonald’s had to come up with a politically correct strategy if
it had to be successful. Beef and pork had to be avoided as India’s majority Hindus (80%
of India’s population) revered cows and 150 million of Indian Muslims do not eat pork. An
additional challenge was suiting to the Indian consumers’ taste. Other U.S. companies

5
Amit Jatia and Vikram Bakshi - They invested about Rs 4.0 billion in the first 30 restaurants.
6
For its back-end supply-chain, the company has tied up with French company McCain for french fries,
besides Vista Processed Foods and Dynamix Dairy for buns and dairy products.
7
McDonald’s has become a target for anti-American sentiment around the world from a culture perspective.
There have been incidents of bombs being thrown at restaurants in Paris, Mumbai (formerly Bombay) and
Indonesia (in 2002).
8
In January 1996, farmer activists attacked and damaged a Kentucky Fried Chicken store in Bangalore,
saying KFC represented western food habits which are not needed in India. A bottling plant owned by the
worlds No 1 soft drinks company, Coca-Cola Co, was bombed in Andhra Pradesh in 2001.

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had found the Indian market a tough one to crack and the cultural and culinary
differences too wide to bridge. Indians generally preferred spicy tandoori and curry food.
So it was better to make the items spicy or not at all.

3.2.2. An Indianized Menu, Re-engineered operations and no beef burger

“We made a commitment far back in 1995 about no beef or pork. We have a nice
vegetarian menu and we don't even use eggs in ice cream or mayonnaise.”
- Amit Jatia, MD, McDonald’s India in 2001.

“We understand Indian culture because we were born in it. Physical separation of
vegetarian and non-vegetarian products is maintained right from the farm to the
customer”
- Vikram Bakshi, MD, McDonald's India (North and East).

McDonald’s introduced a menu which completely excluded beef or pork. The menu
(approx. 75%) was Indianized and specifically designed to woo Indian customers.
Instead of the flagship beef-based Big Mac (popular elsewhere), McDonald’s introduced
a mutton-based “Maharaja Mac” in India. For the middle class, the menu included
McAloo Tikki Burger (breaded potato and pea pattie).
(Refer Exhibit II – ‘The Menu at McDonald’s India’ on page 13 and 14)

The menu McDonald's developed also included vegetarian selections to suit Indian
tasted and culture. Some of the operations were re-engineered to address the unique
requirements of a vegetarian menu. Some key features are listed below:

• 100% vegetarian cheese and cold sauces.

• Separate preparation of Vegetable products using dedicated equipment and
utensils.
• Only vegetable oil used as a cooking medium.
• This separation of vegetarian and non-vegetarian food products maintained
across various stages of procurement, cooking and serving.
• All stores maintain two separate burger-cooking lines, one vegetarian and one
not. Workers in the vegetarian section wear green aprons, and workers from the
non-vegetarian section are forbidden to cross over without showering first9.

[In May 2001, a right-wing Hindu group attacked a McDonald's outlet in Bombay after an
ethnic Indian lawyer sued the company in the United States for selling French fries
flavoured with beef tallow. McDonalds said it used beef tallow in the United States but
denied using beef in any of its products in India10. The company has reaped success in
India despite not selling a single beefburger. McDonald's responded with signs outside
all its Indian outlets saying ''No beef or beef products sold here,'' but the public relations
injury took a while to heal.]

9
Tastes of India in U.S. Wrappers, Saritha Rai, April 29, 2003, The New York Times.
10
McDonald's India plans expansion despite war fears, November 7, 2001, Rediff.com

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4. Competition – Major Competitors in India and Globally

Major Competitors Globally

Burger King Corporation
Wendy's International, Inc.
CKE Restaurants, Inc.
Jack in the Box Inc.
Sonic Corporation
Checkers Drive-In Restaurants, Inc.
White Castle System, Inc.
Whataburger, Inc.
YUM! Brands, Inc.
Doctor's Associates Inc.
KFC

Major Competitors in India

Jumbo King
Pizza Hut
KFC
Domino’s Pizza
Narula’s
Subway
Café Coffee Day
Hyderabad House
Barista
Ohri’s
Baskin Robbins

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5. McDonald’s – Quick Facts

McDonald’s: Quick Facts

Company McDonald’s India
Launched 1996
Revenues Net profit of $4.3bn for 2008 globally
Employees More than 6,500
Industry Quick service restaurants, Fast Food Retailing
Operations Across all major Tier- I and II cities in India
Total Stores Around 160 (All company owned except two)
Major Competitors • KFC, Subway, Narula’s, Café Coffee Day
Market Positioning • McDonald’s menu is priced at a value that the largest segment of
the Indian consumers can afford
Company Vision • Quality, Service Cleanliness & Value (QSC&V)
• The McDonald's philosophy of QSC&V is the guiding force behind
its service to the customers
Business/Growth • Leverage economies to minimize costs while maximizing value to
Strategy customers
Key Executives • Tim Fenton, McDonald’s president for Asia, the Middle East and Africa
Name, Designation • Amit Jatia, JV partner and MD, West and South India
• Vikram Bakshi, JV partner and MD, North and East India
• Abhijit Upadhye, Director - Supply Chain, Menu Management &
New Business Channels
Website http://www.mcdonaldsindia.com

6. Exhibit II: Four Pillars of McDonald’s success in India

Fresh food

Limited menu Affordable Price

Fast service

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7. Timeline of McDonald's in India

Year Timeline of McDonald's in India

1996 McDonald’s opened its first Indian outlet in New Delhi.11
McDonald’s opened 34 restaurants in five years. They invested about Rs
2001
4.0 billion in the first 30 restaurants.
McDonald's India plans expansion despite war fears. The expansion is set
2001
to increase the number of outlets to 80 at a cost of Rs 3.5 billion.
A right-wing Hindu group attacked a McDonald's outlet in Bombay after an
2001 ethnic Indian lawyer sued the company in the United States for selling
French fries flavoured with beef tallow.
McDonald’s opened its first dessert kiosk at Faridabad in the outskirts of
2003
Delhi.
2004 McDonald’s introduced home delivery for the first time in New Delhi
2004 McDonald’s has opened a total of 58 restaurants12
In November 2004, McDonald’s entered South India with its first restaurant
2004
in Bangalore – a city also known as the Silicon Valley of India.
2006 Across-the-board promotions to 60 per cent of the 5,000 employees.
Began considering a franchise model for its North India operations by 2008
2007 for a deeper penetration into the country's growing food and beverages
market.
2007 McDonald's has 61 outlets in North India
2007 McDonald's planned to introduce the McCafes concept in India
2008 McDonald’s introduces the out-of-home breakfast concept in India.
2008 Tie-ups with BPCL and HPCL
McDonald’s rolls out its latest in-store promotion for kids the ‘Spiderman
2009
Happy Meal’ across 11 Indian cities.
2009 Expansion plans to open 40 new restaurants by year-end.
McDonald’s runs 160 restaurants in the country. McDonald's has 15 outlets
2009
on express highways.

11
Store located in Vasant Vihar, an affluent residential colony in India’s capital,
12
Mostly in the northern and western part of India

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8. Pricing Strategy - The Rs-20 trap and ‘Purchasing Power Pricing’

“Our clear strategy is to bring the customers in initially and provide a range of entry-level
products so that they can try new items and graduate to the higher rungs. Thus, if a
customer starts with a McAloo Tikki Burger (breaded potato and pea pattie), what he
graduates to finally is a vegetarian burger. Or, if a customer starts with a Chicken Kabab
burger, what he graduates finally to is the McChicken.”
- Vikram Bakshi, McDonald’s managing director of the Northern region in India

McDonald’s has followed “purchasing power pricing” strategy13. Even though India ranks
as among the top 10 per cent of the busiest markets for McDonald’s globally, it ranks low
in terms of earnings. This is because a quarter of the sales are at the lowest price point
of Rs 2014. McDonald’s strategy has been to increase sales volume of its products by
making its products available at an affordable price. The reason McDonald’s brought
down its prices is because even though McDonald’s was able to get a larger share of
rich and upper-middleclass population, it was not that successful at effectively tapping
the middle-class and lower middle-class segments. This has prompted some analysts to
say that McDonald’s has fallen into the Rs-20 trap. In earlier years, McDonald’s had
launched quite a few campaigns emphasizing this price. Going back on this price could
attract negative feedback from customers. However, from another perspective, the low
prices could result in a boon in times of economic recession as customers want more
value for money, even in food as well.

9. Kiosks at store entrances for customers in a hurry

McDonald’s recognized the need of customers who were in a hurry. A customer who
only wants an ice-cream or a beverage does not have to wait in a regular queue.
Accordingly, McDonald’s opened its first dessert kiosk at its Faridabad15 store in 2003.
The kiosks are at the entrance. McDonald’s has since started ice-cream and beverage
kiosks at 23 stores. These kiosks have added 10 per cent to the sales of the stores. The
enhanced cost works out to 10-12 per cent of the total cost16.

10. Home Delivery - McDonald’s Delivery Service or McDelivery

Heavy traffic and parking woes are common in India and put off customers from visiting
the stores directly. While most other quick-service restaurants in India offered home
delivery (and some even offered it for free), McDonald’s did not have this service for
customers. This was an opportunity for McDonald’s to increase its revenues at an
incremental cost by leveraging its stores to deliver food in the vicinity. Typically, stores

13
Purchasing power pricing or the customer’s ability to pay - called so by Amit Jatia, the company’s
managing director in the Western region.
14
In 1997, the company cut prices on its vegetable nuggets from Rs 29 to Rs 19, and the soft service ice
cream cone from Rs 15 to Rs 7. In September 2001, McDonald’s offered its enormously popular shudh
shakahari (pure vegetarian) Veg Surprise (a veggie burger) for Rs 17. In March 2004, McDonald’s launched
a Happy Price menu under which it sells four of its burger products at Rs20 each.
15
City in the outskirts of Delhi.
16
How McDonald's is trying to get more out of its stores.

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that did home delivery saw sales grow as much as 12 per cent. In 2004, McDonald’s
introduced home delivery for the first time in New Delhi. Thus McDonald’s Delivery
Service or simply McDelivery came into existence. McDonald’s even ran a call centre for
this purpose. A customer could order on the phone and the meal would be delivered
within 30 minutes. In congested areas/lanes the delivery is done on bicycles. As per
estimates, the company expected to increase its turnover 6 per cent by providing this
service to customers. McDonald’s does home delivery only in Asia.

11. Out-of-home Breakfast - International McDonald’s format with local taste

In 1973, McDonald's lead the way with breakfast fast food with the introduction of the
Egg McMuffin. Subsequently, McDonald’s had good results with breakfast offerings
globally. A full breakfast line was added to the menu in about five years time. By 1987
one-fourth of all breakfasts eaten out in the United States came from McDonald's
restaurants. In Europe17, it accounts for 25 per cent of its turnover. In South East Asia,
breakfast fetches McDonald’s 12-15 per cent of its total revenue.

A research on breakfast habits carried out in large Indian cities in 2008 by McDonald’s
indicated that 18 per cent people in cities preferred eating out of home, driven by
convenience and variety. The research also revealed that out-of-home breakfast in
Mumbai was high during the whole week and in Delhi it peaked during weekends.

In December 2008, McDonald’s ran a pilot at some of its stores in Delhi and Mumbai
offering breakfast. It already had an international breakfast menu that could be brought
to India. But, it had to be adapted to Indian tastes. Some of its offerings like the
vegetarian wedge and non-vegetarian wedge were suited to Indian taste. It came out
with a special egg and cheese sandwiches18. Customary Indian items like paratha and
samosa were intentionally kept out of the menu as the company felt that the company
felt that the customers would not want Indian stuff. The price of the breakfast menu was
thus set between Rs 20 and Rs 99 which the Indian consumers could easily afford.

12. McDonald’s Supply Chain Management (SCM)

“The efficient supply chain that we have put in place is the backbone of the whole
business. We had to ensure the right ingredients at the right quality and at the right time.
And the key challenge is to ensure that none of these ingredients runs out of stock in
any of our outlets at any point of time.”
- Abhijit Upadhye, Director - Supply Chain, Menu Management & New Business Channels,
McDonald’s India.

The most important reason for McDonald’s pricing flexibility is its well-established supply
chain. Before setting up the first restaurant in Delhi in 1996, the company spent almost
six years and Rs 500 crore along with its Indian supplier partners on establishing a
supply chain which ensures efficiency and speed in distribution.

17
In Europe, McDonald’s began offering breakfast in the 1980s.
18
80 per cent of McDonald’s sale in India is sandwiches

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12.1. Unique cold chain

McDonald’s India sources almost 200 ingredients from over 40 suppliers spread all over
the country. In a year, McDonald’s consumes a minimum of 4.6 crore buns, 17 lakh
bottles of sauce, 1,200 tonnes of iceberg lettuce, six crore patties and hundreds of
tonnes of dairy products and other ingredients. The huge increases in volume sales and
food processing technology have been helping the company to offset its cost.

With a unique cold chain19, the company has been able to cut down on its operational
wastage as well as maintain the freshness and nutritional value of raw and processed
food products. This includes procurement, warehousing, transportation and retailing of
perishable food products, all under controlled temperature. The setting up of this
extensive cold chain distribution system was possible thanks to the cooperation from
international suppliers in transferring technology, and in some cases, investing to form
joint venture companies which today are an integral part of the McDonald’s cold chain.20

13. Cutting costs

Some of McDonald’s efforts to cut costs in its stores:

• Salaries as well as new appointments have been frozen.

• International travel has been cut 85 per cent, domestic travel 50 per cent.
• Phone allowances have been cut by half.
• Paper cups used at water dispensers have been replaced with glass tumblers.
• Within stores, wastage of raw material and finished products has been brought down
from 2 per cent to 1 per cent.
• To make sure that the vendors get sizeable orders, on which prices can be negotiated
better, McDonald’s has restricted their numbers. About 90 per cent of the supplies come
from 27 vendors.
• To get over high real estate rentals in the past, McDonald’s locked in landlords with a
revenue share of less than 10 per cent for 25 years and more. Almost 90 per cent of its
stores have followed this model. Real estate experts wonder if this is the right strategy to
follow now that rentals have crashed.
• In 2007 and 2008, when commodity prices shot up globally, Bakshi offered the vendors
that the extra price could be spread over three years. While this stopped him from
bleeding during those years, it has kept him from dropping prices now when commodity
prices have tumbled.
(Source: Excerpted from Bigger Bites - How McDonald's is trying to get more out of its stores
- Bhupesh Bhandari & Suvi Dogra, Feb 2009.)

19
A cold chain refers to the warehousing, transportation and retailing of products under controlled
temperatures. Such a chain is necessary for ice creams, frozen vegetables, processed meats, dairy and
bakery products. While frozen foods need sub-zero temperatures up to -20°C, products like butter, which
require chilling, need about 0-4°C.
20
Excerpted from ‘Behind the big bite’, The Hindu Businessline, April 03, 2008

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14. Exhibit III: McDonald’s Suppliers in India

McDonald's sources food products form local companies:

Fresh Lettuce comes from Pune, Delhi, Nainital and Ooty
Cheese from Dynamix Dairies, Baramati, Maharashtra
Fresh Buns from Cremica, Phillaur, Punjab and Mrs. Bector and Sons, Khopoli,
Maharashtra
Sauce from Bector Foods, Phillaur, Punjab and Hindustan Lever Limited-Best Foods
Division, Thane
Chicken Patties, Vegetable Patties, Pies and Pizza McPuff™ from Vista Processed
Foods, Taloja, Maharashtra
Dairy Products from Amrit Food, Ghaziabad, UP

(Source: McDonald’s India official website)

(Source: http://www.rediff.com/business/1999/apr/29mac5.jpg)

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15. Exhibit IV: The Menu at McDonald’s India

The Vegetarian Fare at McDonalds India

McVeggie
The McVeggie sandwich starts with the oh-
so-familiar sesame seed bun. In between
the bread, you'll find a vegetarian patty that
is made from peas, carrots, green beans,
red bell pepper, potatoes, onions, rice, and
seasoning. This vegetarian burger is
garnished with lettuce, and has
mayonnaise made without eggs spread
thickly on the bread.

McAloo Tikki
Potatoes (aloo in Hindi) are a popular filling
food item in India. McDonald's in India's
McAloo Tikki sandwich includes a patty
made out of potatoes, peas, and spices. It
also includes tomato slices, onions, and
vegetarian mayonnaise.

Paneer Salsa Wrap

Paneer is referred to as cottage cheese in India. McDonald's Paneer Salsa Wrap starts with a
small slab of paneer that has been dredged in a coating that is a cross between Mexican and
Cajun in flavor. It is fried and the paneer patty is wrapped in flatbread and topped with a salad
mixture that includes lettuce, red cabbage and celery and then is finished off with vegetarian
mayonnaise, salsa and cheddar cheese.

Crispy Chinese
McDonald's in India's Crispy Chinese sandwich is crispy, but very China. It's more an
Indianized Chinese. Nevertheless, this vegetarian patty is topped with a creamy Schezwan
sauce and lettuce which makes it a nice addition to the Indian vegetarian menu.

Veg McCurry Pan

If you are in the mood for something similar to pizza, but don't want a tomato-based sauce,
McDonald's Veg McCurry Pan is a good choice. It starts with a rectangular shaped crust that
is topped with a creamy sauce (made without eggs), and vegetables including broccoli, baby
corn, mushrooms and red bell pepper. It is then baked until the crust is crisp and the toppings
are hot and bubbly.

Pizza McPuff
The vegetarian Pizza McPuff also starts with a rectangular shaped crust, but instead of a
creamy sauce is flavored with a tomato-based sauce and then is topped with carrots, beans,
bell peppers, onions, peas and mozzarella cheese.
* partial list
(Source: What You Can and Can't Get at McDonalds India..., by Noreen, February 26, 2009, Indiamarks)

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 The Non-Vegetarian Fare at McDonalds India

Chicken Maharaja Mac

The Indian version of the Big Mac at McDonalds in
India, is the Chicken Maharaja Mac sandwich which
is made with 2 grilled chicken patties and is topped
with onions, tomatoes, cheese and a spicy
mayonnaise.

McChicken
The McChicken in India is almost the same as its
cousin by the same name in other McDonalds
around the world. It contains one breaded and fried
chicken patty and is topped with lettuce and
vegetarian mayonnaise. It is similar in size (but not
taste) to the spicy chicken sandwich on the dollar
menu at McDonalds restaurants in the U.S.

Filet-O-Fish
The Filet-O-Fish sandwich at McDonalds in India is
the only sandwich item on the menu that is exactly
the same as the Filet-O-Fish sandwich you might eat
at a McDonalds in the U.S.

Chicken McGrill

The Chicken McGrill sandwich starts off with a thin

grilled chicken patty that is embellished with cilantro
mayonnaise, onions and tomatoes and is served on
a toasted bun.

Chicken McCurry Pan

Chicken McCurry Pan is the same as its vegetarian
version. It starts off with a rectangle of dough and is topped with a tomato-curry sauce, spiced
with thyme, basil, and oregano. It is finished off with chicken, bell peppers, and cheese and is
baked till crisp and bubbly.
* partial list
(Source: What You Can and Can't Get at McDonalds India..., by Noreen, February 26, 2009, Indiamarks)

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16. Exhibit V: McDonald’s – Early History and Growth

Year Event
1948 The first McDonald's restaurant opens in California. (Richard and Maurice McDonald)
1954 Ray Kroc gains the rights to set up McDonald's restaurants in most of the country.
1955 Kroc opens his first McDonald's restaurant in Illinois
1955 McDonald's Corporation is incorporated
1958 34 restaurants
1959 More than 100 restaurants
1961 Kroc buys out the McDonald brothers for $2.7 million.
1965 McDonald's goes public.
1967 First foreign restaurant in British Columbia, Canada.
1968 The Big Mac is born
1972 More than $1 billion in annual sales
1973 Breakfast items introduced on the menu, with the debut of the Egg McMuffin.
1975 The first McDonald's drive-thru window
1976 McDonald's had served 20 billion hamburgers with sales exceeding $3 billion.
1979 Children's Happy Meal (a combo meal for children featuring a toy) is introduced
1985 One of the 30 companies that make up the Dow Jones Industrial Average.
1991 Number of countries with McDonald's outlets - 59
1991 9,000 McDonald’s units in U.S.
1996 McDonald’s enter India
1997 12,500 McDonald’s units in U.S.
1998 Number of countries with McDonald's outlets - 114
2002 First quarterly loss since going public.
(Source: Compiled from various sources)

17. Exhibit VI: Principles to McDonald’s business success

Seven Principles to McDonald’s Business Success Globally (early years)

No kickbacks from suppliers, any supplier rebates went to the
Honesty and integrity
franchise owners, not the company
Strong relationships needed by three partners for the company's
Relationships
success: owners/operators, suppliers and corporate staff.
Standards High standards to set the company apart from competitors
Company leaders knew how to impress their subordinates with their
humility and energy. Top officials visiting franchises would pick
Leading by example
rubbish off the grass and join in at the grill if there was a rush of
customers
McDonald's staff were taught to be willing to risk failure and to admit
Courage
mistakes
Communication It’s not how often you communicate that is important, but how well.
McDonald's likes to inspire employees by rewarding them for their
Recognition
work.

(Source: McPrinciples to supersize business success, Harvey Schachter, March 4, 2009, The Globe and Mail -
Ideas from the book, ‘Everything I Know About Business I Learned At McDonald's’, written with journalist Adina Genn, Mr.
Facella takes us inside the organization to look at the heart, soul and principles that have made it an international hit.)

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18. 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?

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