CONSULTIMATE CASE

CURRENT QUICK SERVING RESTAURANT MARKET IN INDIA:

Quick Service Restaurants are special kinds of restaurants and form an integral part
of the Indian Food Service Industry. The QSRs specialize in fast food cuisines and they
focus on nominal table services as their primary consumer target consists of the young
generation and the various working professionals. With just 3,500 fast food outlets for
a population of 1.3 billion including the burgeoning middle class of 267 million,
Indias fast food market holds strong growth potential - a projected 7% economic
growth and 22% CAGR till 2021. In India, a large number of international QSRs have
established their outlets with franchise rights of various companies. Indian QSRs are
also coming up and expanding but foreign brands maintain their dominance.
McDonalds was the first QSR in India followed by various others like KFC and
Dominos.

PROBLEMS FACED BY INTERNATIONAL BRANDS IN INDIA:

The QSR outlets are facing huge competition in India, internally as well as from the
prominence gained by Indian counterparts. The major portion that is about 80% of the
QSR chains are in metros which has led to cannibalizing of their own products. A
flurry of pizza and burger global joints has entered India over the last 2 years. The sky
high rentals have also added to the falling revenues. Major brands like KFC have seen
a reduction of about 80 outlets in India since 2014.

MCDONALDS IN INDIA:

Big fast-food chains McDonald's, KFC and Cafe Coffee Day seem to have lost their
growth momentum as Indian consumers increasingly prefer pizzas over burgers,
chicken meals, rolls and sandwiches with the pizza food market having 52% market
share in 2015. Dominos enjoys a 16% market share in Indias food services sector with
McDonalds share being around 7.5% and Pizza Hut stands at 4.4%. McDonalds is
facing a tough time though as their ongoing crisis saw their licensee in North and East
India, Connaught Plaza Restaurants Pvt Ltd, shut down 41 of the 55 restaurants as
McDonalds failed to renew their eating house licenses. In fact the burger market is
expected to see no growth at all projected till 2020. McDonalds is thus looking to
penetrate further into other categories customizing their breakfast menu for the Indian
audience, adding versions of local favorites like the Masala Dosa Brioche and Masala
Scrambled Eggs.

PIZZATOS EXPANSION PLAN:

PizzaTos is a well-established pizza outlet, originating under the warm skies of Milan.
The pizza market in Italy is featured by a large number of pizzerias down in the street
corner and existing fierce competition. Between eat-in and takeaway, 1.6 billion pizzas
were eaten in Italy in 2016. Yet with 200 outlets in Italy, PizzaTos enjoys 3.6% market
share. Though the market looks daunting and perhaps unhealthy with the presence
of major chains like Rossopomodoro and Spizzicos, Dominos still entered the Italian
territory in 2015. Taking it as a cue that it must do something new, PizzaTos is now
contemplating whether to enter India.

*PizzaTos is a fictitious organisation. Any brand if existing with a similar name,

should not be considered for further statistics and details.

** SOURCE OF THE CASE: CONSULTIMATE

 CASE QUESTIONS
1)
a) What is the percentage split of persons ordering vegetarian in McDonalds
currently in India?
b) Based on that, estimate the average monthly demand of Masala Dosa
Brioche by McDonalds in India in 2019, assuming it starts the new
breakfast menu in Jan18.

2) The customers are always looking for holistic experiences in services incurred.
Considering the current Govt. regulations in India, would you as a consultant,
suggest McDonalds to apply for beer and wine licenses and include them in
their menu? (Provide justification)

3)
a) Find the current annual demand of pizzas in India.
b) If PizzaTos decides to enter India in 2018, what would be the target
average monthly revenue required to acquire a 5% market share in the
Indian QSR segment by 2023?

4)
a) To achieve the targeted average monthly revenue, what are the key
decisions that management at PizzaTos should take into consideration?
b) What will be the key challenges in those decisions and what suggestions
would you as a consultant provide to fill those gaps?

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