Mcdonald’s in India Essay

McDonalds in India McDonalds uses a multidomestic dodging in India. This can be seen from its use of local suppliers, its adaptive pricing strategies and the removal of the fraternitys representative product, the Big Mac, and replacing it with a set about of new products specifically catered to the Indian culture and preferences. Unlike in other countries, a large proportion of Indians do not eat pork or beef, and many others argon vegetarians. It is therefore practically impossible for McDonalds to succeed with its international line of products such as the big Mac, which focuses on beef products.Moreover, with severally household spending more than 50% of income on food and beverages, and more than 70% of the population earning less than $2,000 annually, the societys usual target shargon of the middle-class households is unable to afford its products. Hence, it can be seen that McDonalds needs a high level of responsiveness and adaptation to the Indian market. In addition, th e company opted to enter the market as joint ventures with local managers, clearly showing no need of global integration, but rather, emphasis on local adaptability. attractive force of the Fast Food Industry in IndiaFactor Conditions in India Indian goal Affecting the Demand of Specific Foods Inefficient Food Chain and distribution Systems Chance Government Policies Porters Diamond Model Attractiveness of the Fast Food Industry in India Factor Conditions in India Indian Culture Affecting the Demand of Specific Foods Inefficient Food Chain and Distribution Systems Chance Government Policies Porters Diamond Model McDonalds strategy is highly impelling in India. McDonalds success thus far in India is attributable to the factors as analysed in Porters Diamond Model.An most-valuable factor for the success of McDonalds was its reliable distribution channels for supplies from local suppliers. As the food chain and distribution channels in India were inefficient, and imports were taxe d at a staggering 65%, it was important that McDonalds obtain its raw materials from local suppliers, but at the same time ensure that the supplies were of good quality, and were delivered efficiently. This would be needed to ensure that the company maintains a high standard of quality, while at the same time ensuring low costs of production.Given the state of the agricultural sedulousness and the high import taxes in the country, setting up a reliable distribution channel for McDonalds creates a valuable resource that is rare, costly to imitate, and non-substitutable. It consequently creates a sustainable competitive advantage for McDonalds in India. Another important factor of success is the pricing adopted by McDonalds. Unlike in other parts of the world, the consumers in India are highly price sensitive to food, since more than half of their income is spent on food.Thus, it was important that McDonalds sets acceptable prices for their products in India. This was not an easy t ask, as the company had to set a price that was affordable to the Indians, but at the same time, not undercut its profit margin. Hence, the company relied heavily on local management for the operations of the business. Not only did it enhance the companys responsiveness to the local needs, it also allowed the company to rede the culture of the Indians better.Fitting the companys values into the culture of the country is especially crucial to the survival and success of McDonalds in India, since the very nature of food products McDonalds deals with may conflict with the cultural beliefs of Hindus, who make up the majority of Indian population. Besides seeking out opportunities, McDonalds has also successfully dealt with the threats, especially those of the environmentalist groups. As there were many vocal environmental and animal activists in India, they posed a substantial threat to the companys business.Further, these groups also campaigned that fast-food joints were anti-poor an d cater only to the rich segment. This was especially threatening to the company, since the majority of Indians were not well-to-do. In response, McDonalds products were aptly priced to be affordable to the general public. In addition, they introduced healthier products (such as the toasted McCurry Pan), an also actively participates in many community-involvement programmes, which are largely directed towards children. Since India is in the stage of population growth, the proportion of children is especially high.This strategy hence allows McDonalds to increase its popularity amongst households with children. Moreover, it also fits well with McDonalds culture of focusing on children. While McDonalds strategy in India has been effective thus far, there are challenges it proceeds to face. Currently, McDonalds is situated only in a few metropolitan cities, where the crowds are more familiar with American products, and are willing to try these products. However, with the development of India, McDonalds has to expand to other cities to reach out to the rest of the nation.With the highly regional culture of the country, it has to continuously develop its products which are able to cater to the unique preferences of the consumers. This is important to the companys continued success in the country. Besides, the company also has to ensure that it continues to garner political support. As the country has many activists groups and extremist religious groups, it is important that McDonalds has the support of the government in order to ensure that the operations are able to continue in times of chaos.