NAME: Soboktageen Sohail

STUDENT ID: S-80072

CLASS: BBA-7B

COURSE: INTERNATIONAL BUSINESS

SUBMITTED TO: Dr. Sadaqat Hussain

DATE: 4th April 2023

Table of Contents
Assignment 1:.......................................................................................................................................3
1. Introduction.............................................................................................................................3
2. McDonald’s Location decisions in Pakistan...........................................................................3
3. Fast-Food industry in Pakistan and McDonald’s..................................................................3
4. McDonald’s Market Share in the Pakistani Fast-food industry...........................................4
5. McDonald’s Strategy in Pakistan...........................................................................................4
6. McDonald’s Menu in Pakistan................................................................................................5
7. Problems faced in Pakistan.....................................................................................................6
8. Co-Branding with Pakistani Businesses.................................................................................6
9. CSR Activities of McDonald’s Pakistan.................................................................................6
10. Conclusions..........................................................................................................................7
References.............................................................................................................................................8
 Assignment 1:
How International Businesses cater to Pakistani Culture.

Business: McDonald’s

1. Introduction
McDonald’s is a part of the ‘Fortune 500’ companies and the leading fast-food chain in the
world. Their revenues are in the region of $24 billion and they are present in 124 countries in
30000 locations.

McDonald’s came to Pakistan in 1998. The first location was opened in Gulberg, Lahore. The
second location was opened in Karachi in September 1998. McDonald’s currently has 72
locations in 24 cities of Pakistan. McDonald’s Pakistan is owned by the Lakson Group.
Lakson group is a conglomerate that has a portfolio of Tobacco, insurance firms and
consumer goods.

2. McDonald’s Location decisions in Pakistan

The location was the first point of contention for McDonald’s in Pakistan. They were torn
between opening a first location in Karachi or Lahore. Karachi is seen as a city that sets
trends for the whole country. On the other hand, Lahore is seen as the culinary capital of the
country. Both major metropolises have posh localities such as Clifton and Gulberg. After
much debate it was decided that the first location be opened in Gulberg, Lahore. Two weeks
later, McDonald’s opened it’s second location in Nazimabad, Karachi. Since then
McDonald’s has opened many locations in major cities of Pakistan. These include drive thrus,
the locations in mall food courts as well as full fledged retail outlets in the posh localities of
the country. (Raza Kamal, 2014)

3. Fast-Food industry in Pakistan and McDonald’s

In Pakistan, the food industry is divided into two segments.

 The Eastern (Desi) Food

 The Western (Continental) Food

Each of these segments is very popular in the Pakistani population. But over the years the
trend has shifted towards innovation and a change of taste. This has led the people to prefer
the fast-food outlets and the families as well as the youth look towards fast-food as an easy
meal that can be enjoyed in a rush or a weekend night outing. This trend over the years has
benefited McDonald’s a lot. The company has looked to exploit this trend by offering
attractive deals that cater to the Pakistani taste palette as well as is visually appealing. (Raza
Kamal, 2014)

4. McDonald’s Market Share in the Pakistani Fast-food industry

The market share of the Fast-food industry in Pakistan is around 13 percent. The three major
players in the Pakistani fast-food industry are:

 McDonald’s
 KFC
 Pizza Hut

McDonald’s has the least amount of outlets (72 outlets) out all three, and yet has the highest
market share at 43 percent. This can be attributed to the location decisions of McDonald’s.
The company is very picky in the areas they want to locate their outlets. Most of the times
these happen to be the most posh areas in the particular cities. This is due to McDonald’s
purpose, “Fast Food with Fun.” This attracts the fun seekers automatically. For example,
McDonald’s has opened a location on the sea view in Karachi. This has allowed the tourists
and people visiting Sea view to drop by McDonald’s while they are enjoying a fun day on the
beach. McDonald’s tends to open at recreational spots, where the families and individuals
tend to spend more when they are out to seek entertainment. (Raza Kamal, 2014)

5. McDonald’s Strategy in Pakistan

McDonald’s Pakistan has practiced a strategy of differentiation and look to set itself apart
from its traditional competitors such as Pizza Hut and KFC. McDonald’s has focused on
providing a complete experience to the customers instead of just providing good tasting food.
This has enabled McDonald’s to appeal to the families in Pakistan. Pakistani culture is
centered around the family as one unit. Thus, McDonald’s was able to become a family
restaurant. The people go there for recreation and having a good time out.

In fact, McDonald’s was the pioneer of fun play areas for children in Pakistan. This has since
then been a major attraction for the children and their parents. This has also been
supplemented by the Happy Meal. This always includes a toy or action figure from the latest
trending blockbuster Hollywood animated movies.

Meanwhile, the adults visit McDonald’s for the ambience and the environment. They can
have a great value to money meal as well as do their work. This is especially when the
customers visit malls and find McDonald’s outlets at food courts of Malls like Dolmen,
Centaurus, Giga, Packages Mall etc. McDonald’s provides many opportunities to the fun
seekers, and this all falls right into their strategy of “Food with Fun”.

McDonald’s has also launched a McDelivery app, whereby customers can order online from
their homes, offices or universities and their orders will be delivered to their door step. This
was initiated during the Covid lockdowns and since then has become extremely popular with
the people of Pakistan. (Raza Kamal, 2014)

6. McDonald’s Menu in Pakistan

McDonald’s has a very comprehensive Menu in Pakistan and it can be divided into Major
Segments. These are:

 Breakfast items: These are typically available from 7 am till 12 pm. These include
McMuffins, sausage wraps, hot cakes and Omelets.
 Beef items: These include items such as Big Mac, McRoyale (unique item to
Pakistan), and Quarter pounder.
 Chicken items: These include items such as McChicken, Spicy McCrispy (unique
item to Pakistan) and McArabia.
 Happy Meals: These are usually including a toy and offer options for beef, chicken,
chicken nuggets and fillet o fish.
 Dessert Menu: McDonald’s Pakistan has a dessert menu consisting of McFlurry,
Sundaes and the classic cone.
 McCafe: The McCafe menu includes hot drinks such as different types of Lattes,
Cappuccinos, Espressos and the Pakistani chai.

These menu items differ from the items in the other countries as these are tailored to
Pakistani taste buds as well have higher spice level.

The unique items that McDonald’s launched over the years are McDonald’s Bun Kebab,
McDonald’s Spicy Chicken Chapli and McDonald’s Chai. These are items that crafted
keeping in mind the Pakistani culinary culture. They provide a value for money meal and are
extremely popular among the local populace.

McDonald’s Pakistan uses Halal meats and items in their products and emphasizes on this
fact to avoid controversies like the ones faced by McDonald’s India. (McDonald's Pakistan,
2023)
 7. Problems faced in Pakistan.
The first problem faced by McDonald’s in Pakistan was convincing the people that the meats
used in their products are Halal. In 2005, McDonald’s had to combat the ‘bird flu’ and this
was followed by the ‘mad cow’. These diseases dealt a severe blow to the operations of the
company in Pakistan. In the recent years, especially since 2022. There has been a rising
inflation in Pakistan, and this has been coupled with the import ban by the Government of
Pakistan. This has resulted in rising material costs and has forced McDonald’s to raise its
prices in Pakistan. The result has been a major slump in sales for the company. The trained
workforce for McDonald’s operations was also difficult to find initially. This can be
attributed to the fact that there were little to no women workers available at the time. This has
gradually decreased as the society has become more accepting of women working in Fast-
food outlets. (Raza Kamal, 2014)

8. Co-Branding with Pakistani Businesses

McDonald’s has joint ventures with local Pakistani businesses and organizations such as
Ufone, PIA, and more recently Peshawar Zalmi (a local sports team). These co-branding
efforts have led to McDonald’s getting an impetus in their sales with deals that are offered to
the customers of these businesses.

The Zalmi deal is Rs. 599 deal that has been popularized during the Pakistani Super League.
This has been done in collaboration with a local cricket team called Peshawari Zalmi. This
led to a major spike in sales for McDonald’s during this time period. (McDonald's Pakistan,
2023)

9. CSR Activities of McDonald’s Pakistan

“If you’re going to take money out of community, give something back.”

McDonald’s Pakistan has material and monetary support to the needy. This includes
educational, sporting and charity programs. It also supports the Thalassemia society of
Pakistan. The Company provided free meals to healthcare workers during the peak of the
Covid pandemic. Free of cost meals were provided by McDonald’s Pakistan to law
enforcement members on duty in Major cities of Pakistan. McDonald’s also has an open
doors policy where the customers and the members of the society can visit their kitchens to
ascertain the level of cleanliness and hygiene practiced in them. (Dawn Images, 2020)
 10. Conclusions
McDonald’s has catered its operations, practices and the products to be in line with the
Pakistani culture and ensure the company provides a fun experience to its customers in the
country. This has not always been easy with their being doubts on the halal nature of their
products and also adapting the operations to the Pakistani social setting. Yet the company
remains a household name in the country and also the highest market holder in the fast-food
industry of Pakistan.
References
Dawn Images. (2020, April 7). McDonald's is out delivering smiles and free meals to Pakistan's real
life superheroes. Here's how and why. From Dawn images:
https://images.dawn.com/news/1185001

McDonald's Pakistan. (2023). Our Menu. From mcdonalds.com.pk: https://mcdonalds.com.pk/full-

menu/

McDonald's Pakistan. (2023, February 22). Zalmi Deal | McDonald's Pakistan. From youtube.com:
https://www.youtube.com/watch?v=0gOSpmzC4ys&ab_channel=McDonald%27sPakistan

Raza Kamal, M. Z. (2014). McDonalds Pakistan: Food and Fun Together. Market Focus, 59-67.