case: mcdonalds india launch
DESCRIPTION
India launch marketing strategyTRANSCRIPT
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Dr Amit Rangnekar NMIMS
Golden Arches
Case of Strategic Adaptation
Dr Amit RangnekarNMIMS
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Dr Amit Rangnekar NMIMS
Strategic issues addressed• Market entry in a developing country with low PCI levels• Evaluating market attractiveness• Strategic insight into a consummate global marketer• Compatibility between product adaptation & local
responsiveness (on the one hand) & a global strategy on the other hand
• Critical assessment of future strategic options, namely aggressive expansion when the operations are yet to attain profitability
• Framework for assessing Industry / Market attractiveness
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Dr Amit Rangnekar NMIMS
Case Coverage• McDonalds International• Corporate Strategy
– Challenges– Attractiveness– Strategies- Country Business Plan– SCM – CSR
• Marketing Strategy Branding, Pricing, Promotion, Distribution STPD
Product Adaptation• Performance • Future Plans• Issues & Realities
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Dr Amit Rangnekar NMIMS
The Beginning…
• 1954, Ray Kroc, 52, a distributor of milk shake maker- Multimixer, heads West on hearing about the McDonald Bros hamburger stand in California
• Seizing the opportunity, he pitched the idea of opening up several restaurants to the McDonald brothers, to sell 8 of his Multimixers to each and every one.
• "Who could we get to open them for us?" they asked "Well," Kroc answered, "what about me?"
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Dr Amit Rangnekar NMIMS
McDonalds-Global Fast Food powerhouse
• 2004- World’s biggest marketer of fast food• 31000 restaurants• 120 countries• 47 million customers per day• Ronald McDonald, introduced 1963, second only
to Santa Claus in terms of recognition
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Dr Amit Rangnekar NMIMS
Philosophy & Vision
• McDonald's complete commitment to Quality, Service, Cleanliness and Value (QSC&V).
• "We take the burger business more seriously than anyone else" Ray Kroc
• "If you've got time to lean, you've got time to clean" Ray Kroc
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Dr Amit Rangnekar NMIMS
Global Strategy
• Customer driven, goal oriented • Achieving sustainable, profitable growth• Designed to increase restaurant visits and grow
brand loyalty among new & existing customers• Further build financial strength
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Dr Amit Rangnekar NMIMS
Plan to Win
• Built around 5 key drivers of exceptional customer experiences- People + 4Ps
• Founded on the belief of 3 success components
Operational Excellence
Leadership Marketing
Innovation
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Dr Amit Rangnekar NMIMS
Operational Excellence
• Intent on delivering exceptional experiences to 47 million customers served each day
• Implement restaurant-specific review policies to identify opportunities to improve QSCV
• Independent mystery shoppers to evaluate performance & give a customer's perspective
• Improve speed of service and efficiency • Better kitchen organization, front counter and drive-
thru areas• Emphasize hospitality, accuracy and cleanliness
Simplify the restaurant environment
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Dr Amit Rangnekar NMIMS
Leadership marketing
• Reconnect with customers thro’ contemporary global marketing direction “i'm lovin' it”
• “i'm lovin' it” reflects an attitude we want our employees to embrace & reflect in their service
• Maximize ad spend impact • Broaden reach through PR• Deliver global brand message through ads,
packaging and restaurant experiences• Emphasis on building sales at existing
restaurants rather than adding new ones.
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Dr Amit Rangnekar NMIMS
Innovation
• Evolving to remain relevant to consumers• Variety of value, premium & wholesome menus
giving more customers more reasons to visit • Expanded Happy Meal choices to attract & retain
customers • Educating people about healthy, active lifestyles,
premium Salads < 10 gm fat • Wi-fi accessibility when enjoying a Big Mac XP• 400 McCafés in 23 countries serving premium &
specialty coffees, cakes, pastries inside existing McDonald's restaurants
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Dr Amit Rangnekar NMIMS
Franchising
• Always been a franchising Company • Franchisees play a major role, approximately
70% of McDonald's businesses are owned and operated by independent franchisees
• McDonald's remains committed to franchising
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Dr Amit Rangnekar NMIMS
Financial Muscle- Y-2002-03
• $ 41.5 billion in sales• $ 25.7 billion (62%)- sales of franchisees• $ 2.1 billion operating profit• $ 893 million Net profit• Assets- $ 24 billion• 8th Most valuable brand in the world, ahead of
Sony, Nokia, Toyota in 1999• Among Top 100 companies worldwide in 2000
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Dr Amit Rangnekar NMIMS
Asian Presence
Entry Country Outlets’02 Outlets’97 % Change
1971 Japan 3891 2437 60
1975 HK 216 140 54
1979 Singapore 130 105 24
1980 Philippines 236 157 50
1981 Malaysia 149 110 49
1984 Taiwan 350 233 50
1985 Thailand 100 61 64
1988 South Korea 357 114 213
1990 China 546 184 197
1991 Indonesia 105 103 2
1996 India 46 9 411
1998 Pakistan 20 0 $
1998 Sri Lanka 2 0 $
Asia 6148 3653 68
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Dr Amit Rangnekar NMIMS
Income Distribution in India
Classification People
(Mn)
Household
(Mn)
Household Income
$ US
Deprived 763 131 <600
Aspirants 120 20 1000-3000
Climbers 45 8 3000-6000
Strivers 25 5 6000-12500
Rich Total 2.18 0.35 >12500
Near Rich 1.55 0.25 12500-25000
Clear Rich 0.44 0.07 25000-50000
Sheer Rich 0.14 0.02 50000-125000
Super Rich 0.03 0.006 >125000
Total 1 Billion 165
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Dr Amit Rangnekar NMIMS
Indian Market
• Huge Sub-continent• 4 times the population of the US• Middle Class estimated at 300 Million• Per Capita GDP $ 400- but at PPP- $2540• 4th largest economy- ahead of France,
Russia,UK, Asia’s 3rd largest-Behind China & Japan (PPP)
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Dr Amit Rangnekar NMIMS
KSA Technopak Survey
• Eating out sector growing, consumer spend increasing
• Rs 40000 Cr eating out market growing @ 6%• Rs 1500 Cr urban fast food segment growing @ 20%• “McDonald’s is not a substitute for Indian food, it’s
just one more option for people to exercise.”• Local taste preference- “Indians want a slice of
America, but only once in a while. Inflexibility in their product mix could be their undoing.”
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Dr Amit Rangnekar NMIMS
Indian Market
• Size of ‘Eating Out’ market- substantial• India’s food expenditure- $77 Bn / world $ 4000
Bn (2%)• Highly fragmented food market• Millions of roadside stalls / carts- major market
share• Udipi, Sandwich, PavBhaji, Chaats, Chinese,
Namkeens, Pizza• Organised chains- Narula’s, Wimpys, Udipis
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Dr Amit Rangnekar NMIMS
Social Diversity
• 20 major languages, 800+ dialects• 50% population literate• Advertising-Billboards, Print , Electronic• 8 languages for National launch
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Dr Amit Rangnekar NMIMS
Infrastructure
• Poor roads• Power situation grim even in New Delhi
(Capital) and Bangalore (Silicon Valley)
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Dr Amit Rangnekar NMIMS
Political
• World’s largest democracy• Fairly stable governments• Armed Forces- Neutral• Bureaucratic red tape omnipresent
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Dr Amit Rangnekar NMIMS
Economic
• Entry & Exits in sectors controlled by Govt• MNC restrictions• Deregulation since 1991 but socialist / swadeshi
mindset continues• MPs comment on MNC in consumer sector
“We want computer chips, not potato chips”
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Dr Amit Rangnekar NMIMS
Pressure Groups
• Anti- Western / MNC factions• Health activists• Environmentalists• Animal welfare activists• Sons of the soil campaigners
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Dr Amit Rangnekar NMIMS
1991- MNC Invasion
• Indian economy open to FDI• Huge potential• Over confidence• Faulty Market Research inputs cost dear• Major failures, Peugeot closed shop• Repositioning & price reduction helped• Lack of demand
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Dr Amit Rangnekar NMIMS
KFC
• 1st Restaurant Bangalore, 1995• Excessive MSG levels, outlets closed• Restaurant ransacked –1996• Business closed for long periods• No major expansions
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Dr Amit Rangnekar NMIMS
Kelloggs
• Initial High price• Much higher than average Indian breakfast cost
+ Milk• No off take• Targeted at family than kids• Old habits took very long to change
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Dr Amit Rangnekar NMIMS
Reasons for failure
• Low level indigenisation, high costs• Lack of understanding of local tastes• Over estimation of demand potential• Rosy assumptions- Speedy bureaucratic
clearances• Infrastructural inadequacies• Inappropriate strategies- Pricing
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Dr Amit Rangnekar NMIMS
Late Indian Entry
• Closed economy pre 1991• Significant Vegetarian population• Limited purchasing power
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Dr Amit Rangnekar NMIMS
India Vision
• To be India’s "best" quick service restaurant experience - supported by principles and core values
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Dr Amit Rangnekar NMIMS
Targeting Markets
• Initial focus on metros- Mumbai, Delhi• Relatively high incomes• Exposure to western food & culture• Move to smaller satellite towns (Gurgaon,
Pune)• Positive spillover effects of reputation• Jaipur & Agra- To attract foreign tourists
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Dr Amit Rangnekar NMIMS
India-Entry Strategy
• Wholly owned subsidiary- MIPL• Incorporated in 1993• McDonald's opened its doors in India in Vasant
Vihar, New Delhi in October 1996• Entered into two 50:50 JVs with Connaught
Plaza Restaurants-Vikram Bakshi- North & Hardcastle Restaurants-Amit Jatia- West
• Trained extensively, along with their Indian management team, in McDonald's in Indonesia and the US before launch
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Dr Amit Rangnekar NMIMS
Product Adaptation
• Asian product adaptations to local tastes• Burgers with Thai Basil- Thailand• Teriyaki Burger- Japan• Rice dishes- Indonesia
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Dr Amit Rangnekar NMIMS
Product Adaptation-The Indian Challenge
• Much higher degree of adaptability• 40% Vegetarians –Vegetarian selections to suit
Indian taste • Maharaja Mac replaced Big Mac, Chicken Patty
instead of Beef• Respect for local culture- Special Indian menu,
No beef or pork items in India• McAloo burger, Veg Salad Sandwich, McMasala
& McImli sauces
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Dr Amit Rangnekar NMIMS
Product Adaptation-The Indian Challenge
• Common Menu- Chicken Nuggets, Fillet-O- Fish, fries, sodas, shakes
• Garlic free sauces to get in “hard core” vegetarian customers
• Re-formulated own products using spices favoured by Indians
• Eggless sandwich sauces, Soft serves & McShakes
• Freshest chicken, fish and vegetable products • Only vegetable oil used as a cooking medium
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Dr Amit Rangnekar NMIMS
Menu Development
• 1998- Menu development team• Consumer feedback & research findings• Do not entirely localise menu• Wider product range• More Hot food• Low entry level prices• Veg Pizza McPuff• India-75% localised menu, 33% in Asian
countries, Other countries < 5%
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Dr Amit Rangnekar NMIMS
Restaurant Management System (RMS)
• 2 separate menus; green- veg, purple- nonveg• Separate veg, nonveg kitchens with dedicated
staff , preparation and wrapping areas• Different uniforms for kitchen crew to distinguish
roles• Clear segregation: Kitchen staff• Printed brochures of RMS to customers• Customer kitchen tours to assure
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Dr Amit Rangnekar NMIMS
International Standards
• India's local suppliers provide highest quality, freshest ingredients.
• Adherence to Indian Government regulations on food, health and hygiene, benchmarking with own international standards.
• Fast, friendly service - the hallmark of McDonald's restaurants world over
• Stringent cleaning standards, trays sanitised several times each hour.
• Meticulous attention to cleanliness beyond lobby,kitchen to pavement & area outside
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Dr Amit Rangnekar NMIMS
Family Restaurant
• The McDonalds XP for the family• Focus on kids, gifts galore• High chair concept• Brightly lit, casual, comfortable & contemporary
look• Friendly, smiling, fast service• Emphasis on cleanliness
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Dr Amit Rangnekar NMIMS
Value Pricing
• Happy Meal- Small Burger,fries, coke+ toy• Medium Meal Combo- Burger, fries, coke-
Veg Rs 75, Maharaja Mac meal- Rs 94• Family dines under Rs 300 (2003)• Pricing lower than Pak, SL, 50% lesser than US
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Dr Amit Rangnekar NMIMS
Cost Control / Pricing Strategy
• “Customers attracted purely by these unsustainable but attractive low prices would not pay repeat visits”
• Development of a low cost supply chain – crucial enabling factor
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Dr Amit Rangnekar NMIMS
Competitive Pricing• KFC- Rs 59- Rs 79 ( Burger/KFC, Drink)• Chicken, rice, gravy meal for Rs 39• Pizza Hut- Family meal (2 medium pizzas,
Pepsi- Rs 350• Wimpys- Mega meals starting @ Rs 35• McDonalds- Value meals @ 39, Quick bites @
25, Soft serve ice creams @ Rs 8• Even these low prices afforded a 40% margin• ‘I will never become unaffordable, as I’ll then not
be able to generate volumes” Vikram Bakshi
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Dr Amit Rangnekar NMIMS
Widening the Customer Base
• Surveys indicated “Perceived as Premium”• Ensure trials thro’ selective price cutting &
periodic promotions • Harness the prosperity & feel-good-factor
around festivals across regions & religions
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Dr Amit Rangnekar NMIMS
• Children’s painting competition across cities• Maintaining gardens, parks, heritage structures• Effluent treatments, Pulse Polio, recyclable paper
bags• ‘Litter Patrols’ to ensure a cleaner neighbourhood. • Huge donations to Latur/ Bhuj / Gujarat
earthquakes • Co-Sponsor of Inter-School Science Quiz
Competition. • 2002, tie up with Nalanda Foundation - education
of the underprivileged Girl-Child.
Community Partnership / CSR
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Dr Amit Rangnekar NMIMS
Marketing Strategy
• Promotional strategy to convey world class xp, Indian adaptations, freshness, nutrition & value
• Shift from worldwide positioning of drive-in convenience and speedy service
• Segment- The Young family (<30 years)• Target- The young family who eats out • Focus- Attracting children, so family follows• Positioning- ‘McDonalds mein hai kuch baat’ –
a place for the entire family to enjoy• Differentiation- highlighting brand, food & variety • Happy meal film on Cartoon Network, Zee• Special promotions during festivals
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Dr Amit Rangnekar NMIMS
Get Lucky- Promotional scheme
• Collaboration with Coke, MTV, Hungama.com, Sony Music & GM
• Scratch cards on Large combo meals• Prizes- caps, tshirts, CDs, internet cards, free
tickets to a Lucky Ali contest• Purchase of a 2nd meal in a month qualifies for-
Opel Corsa / NZ trip• Snags- Neither Lucky Ali contest materialised
nor Corsa nor NZ trip- issues of credibility
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Dr Amit Rangnekar NMIMS
Promo Spends
• June’00- Rs 10 Crore• March’01- Rs 20 Crore- Doubled• March’02- Rs 18 Crore• March’03- Rs 24 Crore• Emphasis on generating repeat visits• Positioning changes from• “McDonalds mein hai kuch baat” to• “To aaj McDonalds ho jaaye”• A Shift from ‘special’ to ‘acceptable and enjoyable’• McDonalds positioned as a comfort zone for young
families
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Dr Amit Rangnekar NMIMS
Target Markets• Only < 10% population- possible target market • “We want to first concentrate on metros, then open
branches in other cities. We want to set up outlets only in cities where we can ensure the quality of products” Vikram Bakshi
• Phase I- Focus on cities of relatively high incomes where citizens are exposed to western food & culture
• Phase II- Move to smaller satellite towns (Gurgaon, Pune)- Positive spillover effect of reputation
• Jaipur & Agra- To attract foreign tourists• Phase III- Malls, Multiplexes, Highways, Stations & Airports• No plans for South, East, Goa?
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Dr Amit Rangnekar NMIMS
Supply Chain
• Critical for success• Local network for supply chain & distribution• Local suppliers, distributors to match
international quality • Operations & training to match international
quality and hygiene standards• Invested Rs 50 crore in setting up, before
opening 1st outlet• By 2000- Investment in supply chain – Rs 300
Crore
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Dr Amit Rangnekar NMIMS
Cold Chain
• Integral to Supply Chain• Network- Food procurement, warehousing,
transportation and retailing under controlled temperatures
• Cold Chain cuts down on operational wastage • Necessary to maintain food temperatures to retain
their freshness and nutritional value. • Products to be used on a daily basis, stored within
a temperature range of –18ºC to 4ºC.• 52% food products need to be stored under these
conditions before they are used.
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Dr Amit Rangnekar NMIMS
Supply Chain
Trikaya Agriculture – • Supplier of Iceberg Lettuce• Advanced agricultural practices enabled
specialty crops like iceberg lettuce, special herbs and many oriental vegetables.
• Farm infrastructure - Specialised nursery, agricultural experts, pre-cooling room, cold room for handling, refrigerated truck for transportation.
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Dr Amit Rangnekar NMIMS
Supply Chain
Vista Processed Foods• JV of OSI Industries-US & McDonald's-India• Range of frozen chicken & vegetable foods at
world class infrastructure plant at Taloja, Maharashtra.
• Separate processing lines for chicken and vegetable foods
• Capability to produce frozen foods even at -35 Degree C temperature to retain total freshness.
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Dr Amit Rangnekar NMIMS
Supply Chain
Dynamix Diary, Baramati• Supplier of Cheese • Capability to convert milk into cheese,
butter/ghee, skimmed milk powder, lactose, casein, whey protein and humanised baby food
• Supplier to McDonalds & Nestle
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Dr Amit Rangnekar NMIMS
Supply Chain
Amrit Food • Milk and Milk Products for Frozen Desserts• Installed capacity of 6000 lit / hour for producing
homogenised UHT (Ultra High Temperature) processed milk and milk products.
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Dr Amit Rangnekar NMIMS
Supply ChainRadhakrishna Foodland • Distribution Centre- Specialises in handling large
volumes, provide entire range of services like procurement, quality inspection, storage, inventory management, deliveries, data collection, recording & reporting.
• Effective process control for minimum distribution cost• 1-stop shop for food distribution management services. • Dry / cold storage facility to store/transport perishables at
temperatures up to - 22 C
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Dr Amit Rangnekar NMIMS
Supply Chain
Cremica Industries, Philaur, Punjab-• Working with McDonald's European suppliers to
develop technology & expertise allowed Cremica to expand businesses from baking to provide breading & batters to McDonald's India & other companies.
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Dr Amit Rangnekar NMIMS
Dilemma
“In some cases, Indian suppliers had the technology - but no market for the products they produced besides McDonalds”
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Dr Amit Rangnekar NMIMS
Geographically diverse sourcing
• Buns from North• Chicken & Cheese from West• Fish, Lettuce & Pickles from South• 98% paper, locally sourced• French fries imported from Indonesia• 40 suppliers in the chain
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Dr Amit Rangnekar NMIMS
Local Sourcing
• Committed to local sourcing from suppliers and farmers.
• Restaurants constructed using local architects, contractors, labour and maximum local material content
• Relationship mutually beneficial as supplier gets opportunity to expand business, access to latest technology, exposure to advanced practices and the ability to grow or export.
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Dr Amit Rangnekar NMIMS
Distribution
• Dedicated• Matching supplier production with deliveries to
meet schedules & restaurant needs• 2 centralised distribution centers at Mumbai &
Kochi, each capable of catering to 25 outlets • Aim to enhance quality of storage operations• Emphasis on economies of scale-storage
volumes high
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Dr Amit Rangnekar NMIMS
• Interaction with suppliers & logistic firms to ensure optimum stocking
• QIP (Quality Inspection Program)- Quality checks at 20 points in the supply chain movement
• HACCP (Hazard Analysis Critical Control Point) Food safety standards emphasizing prevention of faults than detection thro inspection
• “ With a Cold Chain in place, there is practically no need for a knife in the restaurant. Chopping & food processing is done in the plants. Restaurants are confined to only the actual cooking” Amit Jatia
Distribution
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Dr Amit Rangnekar NMIMS
• Logistics to move RM to restaurants• AFL logistics- 50:50 JV between AirFreight &
FX Coughlin of USA- McDonalds international logistics partner
• AFL responsible for temperature-controlled movement of all products from suppliers to distribution centers
Distribution
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Dr Amit Rangnekar NMIMS
Inculcating a Service Orientation
• Physical logistics important to retain food freshness
• “The truck drivers had to be explicitly and specifically conveyed not to switch off the truck’s ignition to save on fuel & electricity as the refrigeration system also automatically shuts off. We installed trapping devices to log temperature charts through the entire journey” Amit Jatia
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Dr Amit Rangnekar NMIMS
An Employer Of Opportunity
• Employer of opportunity, providing quality employment and long-term careers to the Indian people.
• Average McDonald's restaurant employs 60-80 people from crew to restaurant manager.
• World class-training inputs to 2000 employees in Mumbai and Delhi annually.
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Dr Amit Rangnekar NMIMS
Export Base
• Indian Cheese & Lettuce exported- Sri Lanka, Hong Kong & UAE
• Plans to export to Russia, EU, SE Asia• “Things are becoming global in nature. Once
you set up a supply chain in a strategic location, it can service other countries as well.” Amit Jatia
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Dr Amit Rangnekar NMIMS
Past Performance
Period Out
lets
Place Milestones
First 12
months
7 4 Del,
3 Mum
•6 Million customers (2002)•3.5 Lacs Maharaja Macs•50% revenues from veg menu•40000 customers daily (2003)•No of transactions grow @ 15%•Average spend / customer Rs 45 (2002)
End 1998 14 8 Del,6 Mum
Mid 2000 25 13 Del,
10 Mum,
Pune, Jaipur
Dec2000 46
Nov 2003 51
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Dr Amit Rangnekar NMIMS
Indian XP
• In 1997 consumers classified food as bland• By 2000, it was sought for its taste• Most popular- • Veg pizza Mcpuffs (Samosa + Pizza ingredients)• Chicken Mcgrill (with extra tangy Indian spices)
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Dr Amit Rangnekar NMIMS
Growth Strategies
• Increasing seating capacity• Adding Birthday party areas• Enter new ‘A’ cities- Ludhiana, Ahmedabad,
Baroda- lower spending power , population density• ISBT terminal Delhi• Airport & Railway station- Mumbai & Jaipur• Highways & Petrol Pumps• Malls & Multiplexes- Lower outlet investment than
traditional
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Dr Amit Rangnekar NMIMS
Points to Ponder
• Would customer profile on highways & railway stations be appropriate
• Would they generate enough traffic• Dispersed outlets- effective catering?• Expanding too fast? Break even ?• Successful in developing supply chain & creating
a satisfied customer base, opportune time to expand
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Dr Amit Rangnekar NMIMS
CEO Speak• “ Meticulous planning went in before opening a restaurant. It
took us 6 years to open our first outlet because we carried out a detailed survey, then identified the local sources, closely studied the Indian food habits and tastes, before taking the plunge.”
• “We have been very careful with regard to our expansion plans. McDONALD’s currently operates 50 fast food restaurants in India. We are satisfied with the progress in India so far and want to take the total number of restaurants to 100 by 2006”
• “McDonald’s fits in neatly with the multiplex culture as our restaurants provide a bright and cheerful ambience and a pleasurable dining experience for the family.
• McDonald’s has so far invested Rs 500 crore in its operations in India. This figure would be raised to Rs 800 crore by 2005.
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Dr Amit Rangnekar NMIMS
The Compliment
• “McDonald’s products sold in India have been Indianised & produced in accordance with Indian tastes & preferences. Hugely popular products like aloo-tikki burger are now being exported to the Middle East where too they have proven to be a big hit. These evolved products are being studied closely in western countries”
• “On any given day, McDonald’s restaurant at Doraha near Ludhiana on NH 1, serves up to 2000 customers which is as good as a restaurant in Connaught Place”
• “We want the right location, right size for a 150 seat restaurant & the right deal which does not involve subletting of the premises. In Chandigarh, we find most commercial properties rented out or embroiled in disputes. We don’t want to get involved in any such deal”
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Dr Amit Rangnekar NMIMS
MIPL- points to ponder
• Investment / outlet excluding real estate- Rs 3 Cr• Jun 2003, 50 outlets, Planned- 80 outlets by end 2003• 30 additional outlets = investment > 100 Cr• Area, Location, Size, Seating- Crucial but expensive• Scale back expansions by 20% to 64 outlets in India,
close 250 outlets in emerging markets• Can lead to delayed Break-even as huge investments in
supply chain, branding, infrastructure• Figures NA• Recent lackluster financial performance of parent• Critical juncture in evolution
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Dr Amit Rangnekar NMIMS
Urban Indian Fast Food Market-03 (Estimated 1500 Cr)
0
50
100
150
200
Sales (Cr) 175 175 100 80 60 44 25
McDonalds
Pizza Hut
NirulasDomin
osHaldira
mBarista
Pizza Corner
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Dr Amit Rangnekar NMIMS
MCIL Today
0
200
400
600
800
Today 58 400
End 2004 68 500
End 2005 100 800
Outlets Investment
• “We’ve established ourselves firmly in the mind of the consumer. Now is the time to expand and extend the brand in whatever manner we can” Vikram Bakshi
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Dr Amit Rangnekar NMIMS
Reaching Out
• Gunning for volumes through home delivery• Extend reach at home, malls, food courts,
multiplexes, highways, area with heavy footfalls (metro, stations, bus stands)
• Kiosks stocked with beverages, desserts• Limited menu restaurants offering most
popular fare• Consumer reach minus expenditure of a full
restaurant
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Dr Amit Rangnekar NMIMS
Home Delivery
• Home delivery in Mumbai & Delhi outlets to areas within 15 minutes
• Extreme action for a company that prides itself on trashing anything that remains in the ‘bin’ for longer than 8 minutes.
• Slowly waking up to the fact that every player in the eating out sector in India door delivers.
• McDonald’s only delivers in Indonesia & Egypt.• Traffic, parking issues deter consumers due to heavy
traffic where McDonald’s are located as a matter of strategy.
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Dr Amit Rangnekar NMIMS
Increasing Operational Excellence
• Footfalls up 25% per outlet per day• “We’ve reached a stage where operational excellence is
going to drive the growth from now on. So the focus is back on training, which had taken a back seat due to the needs of rapid expansion in the last few years. We’ve increased the number of managers who are going back to training, and are sending more senior managers abroad to gain international exposure,” Bakshi.
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Dr Amit Rangnekar NMIMS
Strategic Analysis
• SWOT
• Trend Analysis
Performance
Key Uncertainties
Key Certainties