McDonald's in India - building an empire 

The fast-food giant
Here a Mac, there a Mac, everywhere ... A household name indeed. Not just around the world, but here in India, as well. With thirty outlets in just Mumbai and Delhi, and their India act in place, they plan to open another 50 outlets across the country by 2004.

Founded on a heritage of giving back to the communities they live in, McDonald's unique strategy of right pricing, local spicing and back-end investments have made them a runaway success wherever they go.

How it all began
McDonalds was founded in San Bernardino, California by two brothers, Maurice and Richard McDonald, in 1948. Ray Kroc, distributor of a 5-spindled Multimixer, had never seen so many people served so quickly when he pulled up to take a look. Seizing the day, he pitched the idea of opening up several restaurants to the brothers Dick and Mac McDonald, convinced that he could sell eight of his Multimixers to each and every one. "Who could we get to open them for us?" Dick McDonald said. "Well," Kroc answered, "what about me?" And so, Ray Kroc opened the first McDonald's restaurant in Des Plaines, Illinois, in 1955. First day's revenues-$366.12! No longer a functioning restaurant, the Des Plaines building is now a museum containing McDonald's memorabilia and artifacts, including the Multimixer!

Since then McDonald's have gone places. McDonald's is the largest and best-known global foodservice retailer with about 28,000 restaurants in 121 countries. A new McDonald's restaurant opens every 13 hours. Yet on any day, even as the market leader, McDonald's serves less than one percent of the world's population. 85% of the restaurants are independently owned and operated, with company-run stores making up the other 15%. 25% of all McDonald's stock is owned by employees, licensees, and suppliers.

The Indian Operation
McDonald's first outlet in Delhi opened in October 1996, was an instant hit. Reason: their near religious commitment to localisation of strategy in India. To cite an example, during Navratras, when even normally non-vegetarian Hindus turn veggie with a vengeance, McDonald's promptly launched the Veg Surprise, a veg burger laced with Indian spices. Priced at Rs17/-, the Veg Surprise was part of their 'Shudh Shakahari' offerings in the two religious months.

Think global, act local
McDonald's have strived to integrate into the Indian ethos from day one without losing out on their international attributes of fun, quality, consistency, value, convenience, quick service and of being a 'family restaurant'.

Managing Director of McDonald's North India operations, which is a 50:50 joint venture between McDonald's International and Connaught Plaza Restaurants Pvt Ltd says "We do not want to be seen as an MNC. If we are to be successful, we have to have an acceptable face that attracts a larger portion of the population".

Recipe for success
One of the first moves the company made was to have no beef or pork items, respecting the country's religious sentiments

Their products : McAloo tikki burger, chatpaty potato wedges, eggless mayonnaise laced with Indian mint chutney!
Supply chain: 95% of raw materials are locally sourced, allowing flexibility in pricing and new product development.
Pricing: Aimed at luring the Indian middle class. The Rs7/- ice-cream cone was started with zero margins to pull in crowds.
Brand positioning: The emphasis is on projecting McDonald's as a global brand relevant to the local community.
Management: Local partners in the two joint ventures are given full freedom to take critical decisions independently.

Even McDonald's feisty Indian competitors, Pizza Hut, Domino's and KFC, admire the Big M's 'glocal' strategies.

Their Vision
McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness and value, so that every customer in every restaurant smiles.

Look out for those golden arches!

Source: Business Today