Question

Case study

McDonald’s in India
McDonald’s entered the Indian market in 1996 as a joint venture (JV) between Oak Brook III. and 2 local partners – Hardcastle Restaurants Private Ltd. in western India, and Connaught Plaza Restaurants Private Ltd. in northern India. To enter a market where consuming beef is "off limits" was very challenging and ambitious. McDonald’s objective was to be inspired by the culture of India and to deliver the greatest of food experiences to the customers in India bringing in the splice of life. They were aiming for to change the local perception of the new product being "American" and remove the fear of unknown, where family "dining in" was a custom for centuries. The management wanted to advertise McDonald’s as a stimulator and advocate of family and culture values. The diversity in language and communication is one of the greatest components of the culture. Until 2000, McDonalds advertised their brand mainly by putting the focus on the outlet design and tailor made food menu for the needs and desires of the diverse Indian population.

The biggest problem McDonald faced was during the launch of its product in India was the public image it was carrying as an International food chain and not matching Indian standards. There were concerns raised about how the burgers are made in McDonalds. McDonald’s entry into India was met with stiff opposition and protesters demolished the restaurant in Thane, a northeastern Bombay suburb and the stores around India were threaten by protesters.
Offering the cheapest burger in the world was not easy. In India, McDonald has offered a menu that did not had any beef or pork items as well as special product formulations for accommodating Indian culture and palate. Furthermore, all the vegetarian products, even the mayonnaise in vegetable burgers, were egg-less and 100% vegetarian. Additions to the menu have been a regular feature of McDonald’s in India. The company in India conducted regular qualitative as well as quantitative studies, which tracked the target consumer lifestyle in India, a practice that had followed internationally as well.

80% of the entire population of India practice Hindu which forbids non-vegetarian food (Indian Mirror, no date). Because of this, McDonald’s initially only offered a vegetarian menu. Later they understood that this wasn’t the correct approach. To honor the cultural differences between religions, the company categorized the cooking tools as well as employees in vegetarian and non-vegetarian category. The cultural factor had to be taken into consideration in such market, as any omission can destroy the reputation globally which may limit the chances of business expansion (Rappa, A., 2007). The change in menu came also because of competitors like KFC, whom entered the market first with non-vegetarian products. McDonald’s formulated a suitable pricing strategy that can facilitate the high volume of consumers, targeting mainly the lower and middle class. The majority of the Indian population falls into this category. McDonald’s had to make it clear to the authorities that their products in India neither contain beef nor pork in it. They had to suit their burgers to Indian taste and Indian market which was a hyper price sensitive market. The introduction of breakfast combos and budget meals made market penetration possible. "Aloo Tikki Burger" or "Potato Burger" was McDonald’s priced product in India.
Today McDonald’s has become a household name and finds its kiosks in almost many schools colleges and corporate. It can be said that there is no food court without a McDonald’s and almost every Indian has tasted McDonald’s fast food. This is indeed a great breakthrough for a very orthodox community that has very rigid and fixed eating habits and traditionally very Indian.
A Discuss the main issues of McDonald’s in India and elaborate how could the company succeed all these issues?
B Discuss the opportunities of business expansion to India for Omani firms.

Answer 1

McDonald's faced issues such as public opposition and the need to adapt to the Indian market in order to succeed in India. Omani firms have opportunities for business expansion to India due to its market potential.

Step-by-step explanation:

The main issues McDonald's faced in India include public opposition, concerns about product quality, and the need to adapt to the Indian market. The company succeeded by addressing these issues through strategies such as offering a vegetarian menu, categorizing cooking tools and employees as vegetarian or non-vegetarian, formulating suitable pricing strategies, and conducting regular studies to track consumer lifestyles. Omani firms have opportunities for business expansion to India due to its large population, growing middle class, and market potential.