Mcdonalds Essay,Full

Assignment,Research,Mcdonalds in
Asia,Mcdonalds in India,
Mcdonalds History,Full Assignment on Mcdonalds in India,Full assignment on
Mcdonalds,Mcdonalds logo,research on Mcdonalds,Mcdonalds successive
organisation,Mcdonalds competition,Pest analysis of mcdonalds,porter five forces on Mcdonalds
,standardisation vs adaptation on Mcdonalds,performance of Mcdonalds ,SWOT analysis of
Mcdonalds ,I love Mcdonalds,Why I Like Mcdonalds,Mcdonalds and Asia,Mcdonalds future in
Asia,Mcdonalds History in India,Mcdonalds future,Threats to Mcdonalds,Religions on Mc

Friday, 7 September 2012

Mcdonalds in India full Assignment

History of mcdonalds
Mcdonald is the world famous fast food restaurant.The idea of
mcdonald’s was introduced by two brothers Mac (Maurice) and
Dick (Richard) Mcdonald in California.their father Patrick
Mcdonald in 1937 was having a hot dog cottage called as
Airdrome restaurant near the airport.In 1940 the restaurant was
renamed as Mcdonald’s Famous Barbeque.In 1940 both brothers
came to a conclusion that most of their profit comes from selling
hamburger so they made their menu very simple by selling only
Hamberger,cheeseburger,soft drinks French fries and apple
pie.in 1954 a turning point came in mcdonald’s brother
history.Ray kroc a seller of Multimixer milkshake visited
mcdonald and he liked the idea of mcdonald.Mcdonalds
corporation was build in those times and as a result kroc started
expanding their business by opening franchises for
mcdonalds.1960 mcdonald’s advertising campaign “look for the
golden arches” gave mcdonald’s sale a big boost.1965 mcdonald
corporation went public.in 1968 mcdonal open its 1000th
restaurant.1974 mcdonalds started their business in UK and
Newzealand.in 1980 mcdonalds was facing very big
competition from its rival Burger King and Wendy but
mcdonald with its innovation was experiencing boost in its
sales.in early and mid ninties mcdonalds was having decline in
their sales and as a result they start improving their
business.taste was improved and some new menu items were
introduced.Mcdonald introduced first Kosher Mcdonald in
Jurusalam and Halal mcdonalds in india(1995 and 1996
respectively).mcdonald start creating healthy image and
invested heavily on refurbishment in 2000’s.today mcdonald’s
has more than 33000 outlets and is operating in 125 countries.it
is the world leading brand in fast food.
Mcdonald started their business in india in 1996.they start their
business in india’s capital New delhi.they choose a busy
residential area Vasant Vihar.Mcdonald India is 50-50
partnership between Mcdonald USA corporation and Two
Indians (Amit Jatia Hardcastle Restaurant ltd Mumbai and
Vikram Bakshi Cannaught plaza restaurant Delhi).Mcdonald as
of now has 210 stores in india.majority of Indians are hindu and
cows are sacred to them.for mcdonalds to sell beef was almost
impossible.the second majority population is muslim and they
eat Halal food.It was a big challenge for mcdonald’s as there
were many protest against mcdonalds.So Mcdonald changed
their menu according to local community for example they
introduce Maharaja Mac instead of Bic Mac.their menu is full of
some spicy products as we know that Indians use spice in their
dishes in abundance.About 75 % of the menu of mcdonald’s has
been indianised and specially designed to woo Indians.
Mcdonald’s passed through some tough times but eventually
managed to survive in that different culture and different
religious belief.Mcdonald by now has a big presence in India
and are trying to extend this ahead.over all mcdonalds serve
more than 47 million customers every day.
MACRO INVIRONEMT
PEST analysis:
Now I am doing PEST analysis of Mcdonalds.PEST analysis
will give us deatails about Political,Economical,Sociocultural
and Technological analysis and effects of these analysis on
Mcdonald’s.I will be comparing both environments in USA and
India.
POLITICAL INFLUENCES:
These are some influences a company doesn’t have any control
of.USA politically is well suited for business of
Mcdonalds.Mcdonlad is very popular in USA.But government is
trying to control marketing of fast food because of health
concern such as cholesterol,cardiovascular and obesity
issues.Good relations in terms of creating jobs and tax revenue
for government is a must to succeed in any market.India is very
rich country in terms of politics.The world largest democracy is
present in India.But being nationalist country they create some
difficulties for foreign entries.Bhatiya Janata party is one of the
leading Hindu national party and they are against fast food
chains as they want to see only vegetarian restaurants in their
country.Their party members always protest against fast food
using meat in their menu.Big risk for Mcdonald’s is BJP.good
news is that trends in India are changing and young people like
to eat fast food.second good news is that India is changing
slowly from nationalistic society to liberal mind set up and
Congress party in power is the main prove of liberal
society.Mcdonalds expanded very fast in the last decade.

ECONOMICAL INFLUENCE:
Economical variables such as currency
exchange,employment,Interest rate,tax ratio and need of
international supply.Most of the organisations depend on foreign
supply of raw metarials for their products making.Currency
exchange also have a great impact on any organistion.USA has a
High tax ratio,Low unemployment developed country,dealing in
internatonal currency (Dollars).Business for Mcdonalds in USA
is already established and low risked but for india high
unemployment rate,dealing in Rupees as currency and millions
of people living below poverty line is a concern for
Mcdonalds.but India is having a booming economy,low tax rate
and availability of labour in abundance and development of
middle class society in India is a positive sign for Mcdonald’s
future.
Sociocultural influences:
Culture and society has a big impact on any organisation
sales.Mcdonals in USA is serving a liberal society.religion has
not much effect on Mcdonald’s.culture is very much simple.But
in India society is very versatile.though India is heavily
populated but still Hindu’s don’t eat meat,Muslim only eat Halal
and they don’t eat pork.In India religion has a very big impact
on society.For Mcdonald it is a big concern.But in India life
style is changing,earning power is increasing,middle class is
getting bigger in its size and people like to eat outside in
restaurants this has a very good impact on society.
Technological influence:
One positive benefit of globalisation was technological
advancement.Althogh Mcdond’s doesn’t use too many
complicated machines in their food production but still they
need highly competitive technology.technology is needed for
example in supply chain management,order taking,Inventory
control,easy and quick payment procedures .Use of technology
can make management more reliable,effective and cost saving in
short term as well as long term.Customers happiness after
getting what they are looking for on time and in a deciplinery
way make them come over and over again.in USA Mcdonalds
use very effective and expensive technology to be in a very
competitive position to their rivals.In india as franchises they
use high technology.they use very good till system,good and
deciplined order taking and well managed staff who knows the
proper use of technologies inside the store.
MICRO ENVIRONMENTAl ISSUES:
Competitive Intensity:
Competitive intensity of Mcdonald’s can be determined with
Porter’s five forces.Porter five forces is business strategy formed
by Michael E.Porter of Haward business school in 1979.he
determined five forces which actually determines attractiveness
of the market and competitiveness.these five forces are
1)Threats of new entrants
2)Threats of substitute
3)Bargaining power of customer
4)Bargaining power of supplier
5)Competitive rivalry with in organisation.
1)Threats of New Entrance:
Entry to a restaurant Business is very difficult.It is hard to make
a prominent brand name.there is high research and development
costs and high cost of entry.Strong brands already in
competition make it more difficult such as Mcdonald’s,Pizza
Hutt,Domino’s etc.New entrants face a very high competition in
the start of the business.In USA and India both Entrance of new
organisation is very difficult as explained above.
2)Threats of Substitute:
The substitutes in this industry are very high.people can choose
variety of products they can either choose Burger
King,KFC,Indian Cuisine,Indian local shops,Indian Vegetarian
restaurants.the same situation is faced by Mcdonalds in USA
and all over the world.
3)Bargaining power of customers:
Bargaining power of customes refers to pressure a customer can
exert on a business to get good quality of food,good customer
service and low price.Bargaining power of customer in this
industry is low.As Mcdonalds provide a standard service,one
price strategy and quality of food.Customers have low
bargaining power through out the world in food industry.
4)Bargaining power of supplier :
Bargaining power of buyer in this industry is low.situation can
change if the main ingredients are not available.But with
Mcdonalds simple menu and working with many supplier,they
are not facing a big threat.so the bargaining power is relatively
low.
5)Rivalry with in the organisation:
Fast food restaurant industry is very competitive.the competition
is so high as all the organisations want to get hold of customer
base.Food industy all over the world has the same criteria
because there are many small businesses operating in abundance
and also top brands.Mcdonald’s knows about the customers
taste and preferences all over the world.so they started Mccafe
(morning breakfast).so Mcdonald’s is providing quality food
from early morning till late night in order to get competitive
edge In the market.
Customer Characteristic:
India is the second most populated country in the world.It has 28
states and almost 4 times the population of USA.India has more
than one billion population.Three fourth of indian population
lives in Urban areas.though per capita income is very low in
india but still people like to spend on costly products and eating
out.out of millions of households in India 49% lives on low
income,30% lower Middle income,12% Middle income group,
5% Upper Middle income group and 4% high income
group.comparing this with USA where middle income group is
very high.consumers in India are highly family
oriented.Mcdonald’s targets high income earner,Middle income
earner and lower middle income earner in India.Indian consumer
are getting brand awareness through
internet,TV,Newpaper,Radio,Megazine etc.Middle income
group is getting bigger in size day by day as a result of
economic boost in India and that is very good news for
mcdonald’s.Indian consumers are now getting environmental
awareness.They like to use Eco-friendly products and
Mcdonalds is very helpful in terms of packaging,and
recycling.Family system gives a big chance for Mcdonalds to
get their sale rise as Indians are buying food in bulks.Indian
consumers are becoming very open minded which is a positive
sign for Mcdonalds.For Mcdonalds to succeed as they are
now,they should go to expand in urban areas as well as rural
areas and target middle and lower income earners and beside
this they should introduce certain products which can be
afforded by low income earners.customers like spicy foods and
Mcdonald has introduced many products which are spicy and
tasting according to the preference of Indians.
COMPANY ISSUES:
Competitive Strategies:
As we know fast food industry proved to be very competitive
industry.Mcdonald’s from its day first has always tried to have
strong competitive advantage over its rival.This is the only way
for Mcdonald’s to survive in globalised
environment.Mcdonald’s strong rivals KFC,Dominos,Pizza Hut
and Subway are also operating in India as well as USA.In the
fast food most important thing for some customers is how
quickly you take order and ready the meal for customer.KFC
and Jumbo King are offering very quick service to customers
and in this way taking customers from Mcdonald’s .Mcdonalds
has tried very well to overcome this advantage by making and
readying its food as quick as possible.Mcdonalds is trying to
improve its graph for customer satisfaction and they are
investing heavily through out the world including
India.mcdonalds uses Wi-Fi and they are trying to emphasise on
demographic characteristic of its customers in the area.Each
month mcdonald’s add some thing special in its menu.To check
Mcdonald’s quality and reliability administration has developed
a very unique idea of Gapbuster visiting Mcdonalds as mystery
customer.They are expertise who comes in the form of a
customer and after serving give credits scoring to the
store.Mcdonald has introduced McBreakfast from 6 am to 11
am.
Mcdonald’s in its competitive strategies is emphasising to target
customers in the new urban areas.Mcdonald’s Indian menu
offers very competitive strategy for Mcdonald’s.Vegetarian
products,Halal and non vegetarian foods for its customer is a
unique and successful idea in India.Kids like mcdonald’s in
India as they are giving free toys to customers who buy happy
meal deals.Mcdonald’s has actively invested in Discount
vouchers given as a leaflets,newspapers,Magazines certainly is a
good business strategy and it has boosted Mcdonald’s customer
number,Business and sales.
Diversification:
Mcdonald’s has diversified product range in India and all over
the world.Due to diversified nature of products Mcdonald’s is
famous among masses.They offer McBreakfast,Lunch and
Dinner,Coffee and many more diversified products.Now if
Mcdonalds move to fully new business for example Hotel
(McHotel) will be a concern.According to guardian news
moving to totally new business will damage the image of
Mcdonalds.If they are really interested they should do a
partnership with another company.As Burger King has done
it.landor marketing Director said move like this will certainly
change the fundamentals of the company.Diversification can be
revealed from Indian market.75 % menu has been
Indianised.Halal food for Muslims has been
introduced.Mcdonald’s happy price menu in India,the 5p’s and
flexible operating platform all shows Mcdonalds to be a
diversified organisation.
Organisational Structure of Mcdonald’s:
Mcdonald’s has a centralised organisational
structure.Centralised structure means the decision making comes
from top management in the hierarchy and people on the floor
are not contributing to the decision making.The decision making
system is very much Bureucratic.In centralised structure main
decisions are made by top level management.Mcdonald’s all
over the world has the same structure and they have to follow all
the decisions from the parents company as they are working as a
franchise.Most oof the fast food chains (for example
KFC,Burger King etc) have the same centralised
structure.Centralised structure has some advantages and
disadvantages.Advantages like Common policy all over the
world can easily be revealed and practised.other parts of the
Business are stopped from being too independent.central control
is easy to handle.it has great Economies of scales.specialisation
can be used greatly.Disadvantages include some time too much
bureaucratic organisation leads to extra layers in hierarchy.it can
reduce motivation in staff as we go down the hierarchy because
of lack of involvement in decision making process.Customers
are not benefited some times as there is a need of quick decision
making.
Standardisation Vs Adaptation:
Standardisation:
Mcdonald’s has a slogan.” Think globally and act
locally”.Mcdonald’s sell standardised product.the taste make
up,ingredients,looks,weight etc will be similar In one part of the
world to the other part of the world.Cheese Burger in United
Kingdom will taste similar to a cheese burger in USA.Think
globally and act locally can be proved in India as Mcdonald’s in
India has changed its menu list.Halal Burger and McVeggie
burgers have been introduced looking to the customers believes
in India. Similar experience has been exercised in Middle east
and Fiji. In Middle east eating of Bacon is banned by
government.Halal food is served in Middle east.McVeggie
Burger in India will taste the same in comparison to McVeggie
burger in Fiji.Mcdonald’s sell standardised products.All the
products should be looking,tasting,weighing and prepared in the
same way across the globe.McVeggie burger was prepared in
India after Research and Development was condcucted purely
in India.
Adaptation:
Mcdonald’s follows strategy of product adaptation.Mcdonald’s
slogan ”think globally and act locally” is the best example.the
best example for mcdonald’s adaptation strategy will be
India.Mcdonald’s cannot use beef Tallow to fry the fries and
burger cutlets (Cows are sacred due to religious belief of
Hindu’s).Bacon cannot be used in Middle east as they are
Muslim countries and it is against their religious belief to eat
pork.products are tailored according to the personal taste of the
country people where it operates.Due to adaptation Mcdonald’s
menu in various countries is different.
Motivation for Market entry:
Parent company of Mcdonald’s USA was aware of some facts
that motivated them to enter Indian market.some of them are
given below.The worlds second largest country by population
after china.India’s population is 4 times more then USA.India
call itself the most democratic nation in the world so it means all
the decisions are made by parliament and not one person or
dictator who can freeze assets for a company in any kind of bad
relations emerging.Brand awareness is improving day by
day,literacy rate is improving,middle class is getting
larger,econonomy of India is booming (now counted in BRIC ‘s
nations which means Brasil,Russia,India and China they are the
fastest developing countries and future economic
power),Unemployment is reducing,Laws are flexible for foreign
businesses.all these facts contributed to motivation of
Mcdonald’s to enter Indian fast food Market.
Modes of Market entry:
There are different ways a company can start opening their
business in another country.for example
Franchising,licencing,Joint Venture,wholly owned subsidiary
etc.But Mcdonalds entry to India involved join venture and
Franchising technique.
Franchising is the right a firm acquires from another firm that
allows them to do particular business activities, such as service
or selling the good , under the name of
a specific firm, e.g. McDonalds.in Franchising a company
follows strict rules from its parent company.mcdonald’s have
210 stores in India. Mcdonald’s all over the world has almost
85% of franchises.the benefit of franchising is that in short
period a company expands its business.the risk involved for
parent company to move into another country and invest heavily
can some times be too risky but when local people start doing it
by themselves,the risk level is minimised.quality control is
difficult with franchising.
Although Mcdonald’s indian is a 50-50 joint venture company
managed by indian.
Performance:
Much of retail is struggling in India but Mcdonald’s has been
seen unaffected and its planning on accelerating its expansion on
the Indian subcontinent.Mr Jatia who is managing half of the
indian franchises said number of customer is jumping 10% to 15
% each month compared to a year ahead.people of India are now
relying on Mcdonald’s.Mcdonalds adaptation policy has boosted
its sales.Mcdonald’s annual sale through out the world is $29
billion annually.Burger king is the second largest fast food
organisation in terms of sales and is strong competitive
rival.Due to company having a customised menu in India
Mcdonald’s is getting popular day by day.performance can be
measured in terms of outlets opened by Mcdonalds in the past
years.in 2010 and 2011 Mcdonalds opened 80 stores in India.In
2010 mcdonald’s sale improved by 30%.Vikram Bakshi MD
Mcdonald’s India said the total sale of $29 billion doller
Mcdonald’s india just accounts for 0.37% of the whole sale.but
the potential is so high and are expecting to get higher in
future.Although Mcdonald’s is facing certain problems like
roads are not in very good condition for transport,power supply
shortage etc but still sales rise and customer satisfaction shows
that Mcdonald’s in India is performing very well.
Short,Medium and long term strategies employed:
Strategy is a planning that is used by an organisation to achieve
its goal and objectives.short term strategy starts from a minute to
6 moths,medium account from 6 month to a year and long term
mean 5 years or more strategy.In short term Mcdonalds is trying
to bring in innovation and make customer satisfy.day to day
issues are planned to satisfy customers.New products are
introduced each month.in medium term they are trying to
maximise its profit and sales.In long run Mcdonald’s is planning
to open new branches across india and indian Mcdonald’s sale
which accounts only 0.37 % of overall sale of Mcdonald to be
taken to 0.50 percent and more in the coming years.
SWOT ANALYSIS
SWOT analysis is a strategic planning method used to evaluate
strength weaknesses,opertunity and threats involved in a project
or in Business.SWOT analysis will give us a quick review of an
organisation current status.
Swot analysis for Mcdonalds in India
Strength:
Mcdonald’s is a market leader in the fast food
industry.Mcdonald’s has a very strong brand image.Mcdonald
has expanded its business to more than 125 countries with more
than 33000 outlets through out the world.mcdonalds has one
competitive advantage and that is Strategic location.In India
they are located in busy shopping malls,Airports and busy drive
through.
Weaknesses:
Mcdonald’s has created very successful brand image but the
market segment is too focused on Kids.Mcdonald’s is often
related to unhealthy food and obesity.Employee turn over rate is
so high.these all are weaknesses of mcdonald’s in the world and
India in particular.
Opportunity:
Mcdonald’s can introduce healthy food consisting of low
calories items.they should put more efforts in Reseach and
Development.Management should try find ways to reduce food
wastage which leads to cost control.new products with different
variety should be introduced to capture the market.
Threats:
Mcdonald’s is facing major competition from its rivals KFC and
Burger King all over the world.In India local curry shops are
offering great challenge to mcdonalds.Company rapid growth
has made mcdonalds very velnerable to other contries economic
slowdown.Press associating Mcdonald’s with obesity destroys
Mcdonald’s image.mcdonald’s in the past has been sued for its
unhealthy products.mcdonald’s should try and solve these
problems by investing heavily and effectively in research and
development.
MARKETING MIX OR 4 P’s:
Price,Product,Place,Promotion are collectively called as product
mix.In order to meet organisational objectives product mix is
considered to be very vital.it should be viewed as coordinated
and interated package of benefits that shows the characteristics
of customers and and related place.
Product:
product is the physical product or service that is offered to a
customer.as we know that Mcdonald’s is very customer oriented
and all their products are customised according to the local
community.in order to succeed in market research has suggested
that customers are always looking for innovation and new
products.Mcdonald is famous for its product
innovation.Mcdonald’s has introduced new products,removed
old products and always looking for the better products so that
customers are satisfied.mcdonald’s india majority of products
are vegetarian products.
Price:
Price is a very important tools which identifies how reliable and
qualitative a product is.when a customer is buying some thing
He/she first draw in his/her own mind of what the product is
worth of.If the price of a product is very low customer think
quality is being promised.price should really ‘reflect brand and
its integrity.Mcdonald’s products are classified in two
categories,BA (Branded affordability) and BCV (Branded Core
Value products)an example of BA is McAllo tikka and chicken
Mcgrill burgers which cost consumer 20-30 rupees.BCV
products mainly include McVeggie and McChicken Burgers that
cost 50-60 indian rupees.
Promotion:
Promotion is a way by which company tries to communicate
with public and make them aware of what the company is
offering.One of the method is Advertisement.Advertisement is
conducted on TV,Cinema,Internet,magazines,Poster site,press
and radio.other ways of promotion includes direct mail,loyalty
scheme,door drops and merchandising.Mcdonald’s is unique in
the way they do promotion.In order to capture the market
Mcdonald’s india has promoted well to improve its
sales.Although advertising is expensive but the return is so
high.Mcdonalds spends big part of its budget on promotion.
Place:
Place plays very important role in launching a product and
making it successful.Mcdonald’s has expanded through out in
India Urban areas.Mcdonald is currently targeting urban areas as
we know that big part of population is living in urban
areas.place doesn’t only include physical location but it is
includes all the processes that eventually leads to product ending
in customers hand.Place plays very important role in getting
priority over the rivals and place should be selected after
research on the local demography,income level and customers
preferences.Mcdonalds in india chooses a particular place after
long research and checking local area’s demographic
characteristics,income level etc.this is the reason Mcdonalds is
very successful in india.
CONCLUSION:
Mcdonald’s is considered to be the King of the fast food.To
achieve this greatness Mcdonald’s has tried hard for ages to
prove itself in the competitive environment of Fast food.The key
factors in success of Mcdonald’s in my view is
innovation,customisation,good management and above all best
Marketing strategies adopted by Mcdonald’s.Mcdonald’s in
India has a very bright future because of the customers
bank,customised approach from Mcdonalds towards its
customers and above all the strong brand Image.