Thursday, January 10, 2013

Fast food chain spread its reach in the indian market

there was hardly anything ‘fast’ in the manner in which this fast food chain spread its reach in the indian market. but mcdonald’s would still look back at the past 19 years with satisfaction, for indians have accepted them quite well

So the decision to go global was taken in the 1950s, but India came on their radar four decades later. Not only that, it took them six years to get ready with an investment of Rs.4 billion for deploying a robust supply-chain model. It was crucial in a country where agriculture was aimed largely towards end consumption at Indian homes and was not tuned to serve the needs of the processed foods industry at that time. Unlike other players who opted for the subsidiary model, McDonald’s resorted to roping in Indian partners for a franchisee model. The company eventually roped in two franchisee partners, and selected Vikram Bakshi and Amit Jatia for North East and South West regions respectively. Both Vikram Bakshi and Amit Jatia, JV partners of McDonald’s in India, avow that initially they had to go through many rounds of meetings and appointments to convince McDonald’s of their eligibility. Of course, that was followed by rigorous training of the Indian management on McDonald’s core values, which it wanted to standardise across all its outlets in India. Then from 1990-95, work began on initial market testing, followed by a research across four major metros in India; and then on the elephantine task of setting up the supply chain. “We wanted to have everything in place before we opened our first store in Delhi,” explains Vikram Bakshi, MD of McDonald’s India (North and East).

But initially, the company failed to cater to the specific tastes of the Indian consumers and rolled out mutton products (which it later withdrew). Moreover, there was the challenge of ensuring that every big Mac outlet across the country serves the same taste. Then the perception that the oil that the company uses contains beef also led to a phenomenal negative publicity that made the Indian market look like a huge load of quicksand. The challenge persists even today. Still, keeping a balance between vegetarian and non-vegetarian food has ensured that McDonald’s was able to win quite a few Indian hearts. They have even gone to the extent of inviting customers at any point of time behind the counter to see how the preparations for vegetarian and non-vegetarian items are done separately.
 

Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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