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McDonald’s Entry in India
• In 1955, Ray Kroc came across the
McDonald’s restaurant and was
impressed.
• He decided to franchise the
restaurant.
• By 1967 McDonald’s was ready to
become an international company.
• In 1996 McDonald’s entered India.
• India is the world’s largest consumer
market.
India: An Ideal Market
for Corporations
• India being the second most populous
country on Earth, has 100 million
customers.
• Most Indians are poor and illiterate.
• The average income of a common
Indian is INR 32,000.
• Despite low incomes, the large
population has potential to earn a
huge profit for the businesses working
there.
 Pressure from
Informal Institutes
• Indians prefer a communist
government over a capitalistic one.
• Indians demand welfare based
economy over a competitive and
materialistic one.
• Religion plays central role in an
Indian’s life.
• A non vegetarian diet is considered
both a sin, and as animal cruelty.
• Sacred animals, like cow, are valued
more than anything else.
Actions taken by McDonald’s
to Overcome these Issues
• McDonald’s lowered it’s prices to
facilitate common Indian
• Separate kitchens were built for
vegetarian and non vegetarian menu
• All meat related items were replaced
with vegan options, except for mutton
burgers.
• Customers were given kitchen tours to
build a loyal customer base.
 Changes Made by
McDonalds in India
• McDonald’s research team studied
Indian’s food preferences.
• The new menu was designed as per the
research team’s findings.
• Separate kitchens were built to ensure
that
• A green (vegan menu) and purple board
(non Vegan Menu) were placed to
differentiate the food items.
• McDonald’s menu was indianised by
including the Maharaja Mac, The McGrill
and the McAloo Burger.
 Pricing Strategy
• McDonald’s lowered its prices.
• Overall, prices in McDonald’s India
are the lowest in South Asia.
• McDonald’s India’s prices are 50%
lower than that of McDonald’s USA
• Despite low prices, McDonald’s is
earning a 40% profit in India.
 McDonald’s Application
of Ethical Relativism
• McDonald’s strategies are specific to
the country it functions in.
• Valuing Indian’s choice, McDonald’s
does not use ham or beef in India.
• McDonald’s restaurants in India,
Germany and Japan have been
upgraded and their interior designed
the way the locals like them.
 Supplier Relationship
Practices
• McDonalds invested INR 3 Billion to
build a network of suppliers,
distribution centers and logistical
support.
• Distribution centers were always
stocked up with food.
• Restaurants only handled cooking,
while vegetables, buns and milk were
prepared elsewhere.
Establishing Relationships
With Farmers
• It trained local farmers to grow
quality vegetables and milk locally.
• McDonald’s introduced Indians to
Dutch agricultural techniques.
• Farmers from South India supplied
ice berg lettuce
• Farmers from North India supplied
milk.
• Farmers from West India supplied
buns.
 Influencing Suppliers
and Distributors
• McDonald’s incentives package for
farmers
• Long term deals with top quality
distributors.
• Potential to earn sizeable profits