McDonalds Question & Answers

Case Questions for Discussion

1.McDonalds has become the poster brand for recession-resilient business. What is McDonald's doing right in India? What elements of its business strategy are working for it and how does it manage to get more out of its stores?

2.Does local adaptation contribute to business growth in a country? Explain McDonald's efforts to adapt to the local culture in India. What challenges did McDonald's face in India?

3.Have you ever visited a McDonald's store? Compare and contrast your experience with another quick-service restaurant or fast-food joint you visited earlier. How can McDonald's improve? Should it alter its strategy?

Case Updates/Snippets

■World's leading food service retailer - McDonald's has more than 32,000 restaurants serving over 50 million customers each day in more than 119 countries.

■McDonald's competitors in India - McDonald's competes with fast food chains like Pizza Hut, Domino's Pizza, Papa John's, Nirula's and KFC in India.

■McDonald's Supply Chain - McDonald's has a dedicated supply chain in India and sources 99% of its products from within the country. The company has strong backward integration right up to the farm level.

■Quick service restaurants in India - By October 2009, McDonald's India had more than 170 quick service restaurants in India. Domino's Pizza, which began operations in India in January 1996, has over 275 stores across 55 cities in the country. KFC has 46 restaurants across 11 cities in India. (KFC is one of the 5 brands owned by Yum!. KFC is a $12 billion global brand and a leading quick-service restaurant (QSR) in many countries.) Nirula's, one of India's oldest food chains (completed 75 years in service in March 2009), has a network of around 62 outlets in five states across Northern India. Nirula's, established in 1934 has interests in hotels, restaurants, ice cream parlours, pastry shops and food processing plants. Nirula's was the first to introduce burgers in India.

■Food Industry in India - In India, food industry and particularly informal eating out market is very small. In India, over quarter of a million customers visit McDonald's family restaurants every day. The Indian fast food market is valued at $1-billion (Rs 4,547 crore) aprrox.

■MFY (Made for You) food preparation platform - MFY is a unique concept (cooking method) where the food is prepared as the customer places its order. All new upcoming McDonald's restaurants are based on MFY. This cooking method has helped McDonald's further strengthen its food safety, hygiene and quality standards. McDonald's has around 10 MFY restaurants in its portfolio.

■How McDonald's manages to keep its prices down? - Fast-food chains face a tough time balancing between margin pressures and hiking prices which can hurt volumes. Consequently, the chains have to increase rates or rework their strategies. Affordability has been the cornerstone of McDonald's global strategy. Some of its measures to achieve this include - Bulk buying, long-term vendor contracts, and manufacturing efficiencies.

■McDelivery Online - In India, McDonald's first launched home delivery of meals in Mumbai in 2004. McDonald's now has plans to launch web-based delivery service in India (across 75 McDelivery cities) in 2010, a pilot for which has already been tested by it in Hyderabad. The company hopes to add 5 per cent to sales via Web delivery. McDonald's