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Application Exercise Question

McDonald's chose to enter the Indian market due to India's large and growing middle class of approximately 200 million people. Young Indian professionals were increasingly adopting Western fast food culture. McDonald's faced challenges in India due to religious restrictions on beef and pork consumption among Hindus and Muslims. However, McDonald's was able to successfully enter the Indian market by launching products tailored to Indian tastes, including the Maharaja Mac made with lamb instead of beef to appeal to Muslims and Hindus.

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83 views3 pages

Application Exercise Question

McDonald's chose to enter the Indian market due to India's large and growing middle class of approximately 200 million people. Young Indian professionals were increasingly adopting Western fast food culture. McDonald's faced challenges in India due to religious restrictions on beef and pork consumption among Hindus and Muslims. However, McDonald's was able to successfully enter the Indian market by launching products tailored to Indian tastes, including the Maharaja Mac made with lamb instead of beef to appeal to Muslims and Hindus.

Uploaded by

Trần Phương
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Application Exercises

1. Choose a company in the social media industry or a chain in the fast-


food industry. In individual, conduct a multilevel environmental analysis,
describing the major variables involved, the relative impact of specific
threats and opportunities, the critical environmental factors to be considered
and entry strategy mode for company and countries you chose. Your findings
can then be presented to the class, allowing a time period for you so that
discussion and debate of different group perspectives can follow. Be
prepared to state what regions or specific countries you are interested in and
give your rationale.

In 1955, McDonald’s was introduced as ‘McDonald’s Corporation’ founded


by Ray Kroc. It is one of the largest food chain all over the world is serving
remarkable number of customers worldwide daily with currently operates
32,000 restaurants in 110 countries; it employs 1.5 million people and
services 60 million customers every day.

Why did McDonald’s choose to penetrate into India market?


Although India is a poor country, but the crowded middle class, estimated at
200 million people, has attracted the interest of McDonald’s. Young
employees who love fast food are increasing in urban India. In Mumbai,
nearly 40% of people who go out to eat are young people. In the past, people
often came to fast food restaurants on holidays or celebrations, but now more
and more young employees choose fast food every day. Indian middle class
troops still steadily increased. Besides, through the media and tourism,
Indians are more exposed to international cuisine. Grasping the opportunity,
US fast food chain restaurants have quickly penetrated including
McDonald's.

Critical environmental factors analysis


 Social Factors
The life style of people is being changed and the demand of this change
affects McDonald’s.. In addition, this changing demand is different in society
to society and country to country. For example, in India, Hindu people prefer
vegetable, Muslim people avoid pork. To fulfill the customers’ expectation,
McDonald’s needs to research the market and also needs to provide effective
food menu.
 Technological factors
As all existing food chains for instance, KFC, Pizza Hut…, compete each
other, McDonald’s has to ensure the all technological access to influence the
customers. Modern and speedy distribution channels, easy and quick payment
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facility, customer entertaining equipment in store, wireless internet facility in
all stores etc. can help McDonald’s to keep on its success.
 Environmental Factors
McDonald’s is criticized for using some harmful elements for example, non-
biodegradable substances for its drinks glasses. Styrofoam containers are also
being used in McDonald’s for meals and it is seriously discouraged to use.
Environmentalists criticize McDonald’s because of food packaging based on
polystyrene
 Competitors
In the US market, attention must be paid to names such as Burger King,
Wendy, KFC,...In addition, when participating in the Italian market,
McDonald's faces traditional Italian dishes: Pizza. When participating in the
Asian market, McDonalds must also pay attention to names such as: Jollibee,
Korea's Lotteria chain.
Although the scale of these rivals is still far behind the McDonald's, these
stores are still growing and becoming contemporaries. The main reason, the
opponents of McDonalds offer lower and more attractive prices - this is what
McDonald’s always avoids
 Opportunities of McDonald’s
 By inventing new food McDonald’s can attracts more customers and
successful innovation can boost up its sales
 By taking the technological benefit it can attracts more customers. For
example, more entertaining elements can be included in each store.
 Threats of McDonald’s
 More competitors are working such as KFC, Burger King, Subway,
Pizza Hut etc. for the same number of customers.
 In health issue, fast food companies are generally criticized
 Competitors’ food offerings are being increased with low price

Why dis McDonald’s choose franchising?


McDonald's business strategy is franchising. The model of franchising of
McDonald's group has a great advantage for the franchisee to be very active.
Shop owners can choose their own advertising and marketing activities
suitable for their location and location. Another key secret of McDonald's
success is that this group has brought the store rent into franchising model.
The larger the store has, the more money the franchise fee will be charged. It
was because of this approach that Ray Kroc skillfully overcame the difficulty
of controlling franchisee's revenue. To do this, McDonald's actively seeks
beautiful, convenient premises for business. On the other hand, McDonald's

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has a long-term business cooperation strategy with major partner corporations
like Coca Cola and become the world's largest Coca Cola consumer.

Problem when entering India market


Most Indians follow Glosbe, which people respect and do not eat beef.
Meanwhile, McDonald’s is the largest beef consumer in the world. Since its
founding in 1955, countless animals have been slaughtered to make Big
Macs. So how can a company whose wealth be created through the
consumption of beef meat be able to enter a country to see beef consumption
as a serious crime? Using pork instead? However, India has about 140 million
Muslims, and Muslims do not eat pork

Solution
McDonald’s has solved the dilemma in Indian culinary culture by launching
"Maharaja Mac", Big Mac Indian version made from lamb. And other dishes
added to the menu to suit local tastes, such as "McAloo Tikki Burger" are
made from chicken. All dishes are carefully categorized for vegetarians and
savers to suit the country where the majority of Hindus are vegetarians.

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