Mcdonald's in India
McDonald’s in India
McDonald’s uses a multidomestic strategy in India. This can be seen from its use of local suppliers, its adaptive pricing strategies and the removal of the company’s representative product, the “Big Mac”, and replacing it with a range 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 are vegetarians. It is therefore practically impossible for McDonald’s to succeed with its international line of products such as the big Mac, which focuses on beef products. Moreover, with each 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 company’s usual target segment of the middle-class households is unable to afford its products. Hence, it can be seen that McDonald’s needs a high level of responsiveness and adaptation to the Indian market. In addition, the 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.
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
Porter’s 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
Porter’s Diamond Model
McDonald’s strategy is highly effective in India.
McDonald’s success thus far in India is attributable to the factors as analysed in Porter’s Diamond Model. An important factor for the success of McDonald’s was its reliable distribution channels for supplies from local suppliers. As the food chain and distribution channels in India were inefficient, and
McDonald’s uses a multidomestic strategy in India. This can be seen from its use of local suppliers, its adaptive pricing strategies and the removal of the company’s representative product, the “Big Mac”, and replacing it with a range 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 are vegetarians. It is therefore practically impossible for McDonald’s to succeed with its international line of products such as the big Mac, which focuses on beef products. Moreover, with each 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 company’s usual target segment of the middle-class households is unable to afford its products. Hence, it can be seen that McDonald’s needs a high level of responsiveness and adaptation to the Indian market. In addition, the 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.
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
Porter’s 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
Porter’s Diamond Model
McDonald’s strategy is highly effective in India.
McDonald’s success thus far in India is attributable to the factors as analysed in Porter’s Diamond Model. An important factor for the success of McDonald’s was its reliable distribution channels for supplies from local suppliers. As the food chain and distribution channels in India were inefficient, and