MCDONALD’s INDIA STRATEGY

Despite of its global fame, McDonald’s India is one of name in Indian food service company that
is always perceived to be a locally owned company, and the rationale behind this can be
explained by the following strategies that company implemented in its Indian operations:
1. Local sourcing: It is one of the key strategy that helped company in making its locally owned
image. In a race to make truly Indian products, company’s strategy is always to prefer local
sourcing. They have also developed many local Indian businesses for sourcing purpose, so
that they should get high quality of products in its Indian operations.
2. Indian Custom and Tradition focused Products.
3. Employment opportunity: McDonald’s India believes in giving quality and long term
employment to Indian people. On an average, one McDonald’s restaurant employees 60-80
peoples that ranges from crew to manager. Currently, there are 4000 Indian people
employed in McDonald’s restaurant chains.
4. Quality, service, cleanliness & value: These things comes in the USP of McDonald’s.
McDonald’s kept this same throughout different geographical locations. They believe in
strategy of giving quality products and service to its consumer with a smile.
5. Corporate social responsibility: McDonald’s recent initiative of ‘Litter patrols’ proves their
philosophy of ‘Giving back to society where it serves’.

PESTEL ANALYSIS
More understanding of these strategy can be done by focusing it through the lens of PESTEL
analysis:

P- Political
Indian is known to have biggest democracy in the world and as far as its political structure and
policies are concerned, highly unfavorable condition prevails here for any Global Entrant. We
can say India’s nationalist nature is one of reason for such difficulties. Apart from this factor,
there are other factors also that includes global market scenario, policy of consumer taxation
and existing political infrastructure. Because of tradition and custom, political parties are
always in favor of vegetarian restaurant food chain. But with globalization and motivation to
achieve high economic growth, India has slowly changed its mindset from nationalistic society
to liberal mind set up and result is clear through McDonalds fast expansion in the last decade.

E- Economic
Currency exchange, Employment, Interest rate, Tax ratio and Need of international supply are
known used economic variable. Many international organizations have used ‘foreign supply of
raw materials’ as economic variable for their products making. As far as low value of Indian
rupee is concern, Currency exchange rate is a great point of concern for McDonald’s Indian
organization. But with advantages like low tax rate, availability of cheap labor, and booming
economy, McDonald’s can predict it as a positive sign for its future in India.

S- Sociocultural influence
Indian society is very versatile in nature. Majority of Indian population i.e. most of Hindu don’t
eat meat and are in favor of supporting vegetarian food restaurant. On the other hand,
minority of Indian population like Christian and Muslim loves meat and beef. As a result, its
creating difficulties for the company to influence both segments of Indian society. But
Nowadays, there has been observed a shift in India life style, Economy is booming, Disposal
income has been increased and now people prefers to spend their enjoyable times in
restaurants. However, the socio-culture issues that McDonald’s India is facing is with the
supplier and the workforce of the organization. They are highly fragmented and diversified.
They have to work with different social and ethnic groups that are there in the socio culture
atmosphere of India. However, with its employer of opportunity strategy, it has provided
employment to more than 4000 Indian peoples and this would be favorable for both
McDonald’s and the local citizens of India.

T- Technological influence
Technological advancement is one of great achievement that we have achieve through
globalization. However, McDonald's doesn’t invest too much in complex and complicated
machines for their food production but still they need advanced technology in their operations.
Big data analytics applications in Walmart is a great example for technology influence, where
they showed how by implementing advanced analytics/technology, they make their customers
happy by providing on time what they are.

E- Environmental influence
The social responsibilities of the McDonald’s on the country are very influential to its. These
involve environmental damage done by using non Eco-friendly products. They were also
charged with claims of employing non- biodegradable substances in their drink glasses. But
their recent initiative ‘litter patrols’, they have proved that they believe in the policy ‘Giving
back to society, where it serves” and has dispel all other misconceptions.

L-Legal influence
In pasts, there has been lot of opposition to the fast food industry in India by various political
parties. As a result, McDonald’s started focused on more careful consideration on their corporate
social responsibilities. As the whole, the company expressed their need to improve its corporate
reputation to a more positive one and start aiming to become more socially responsible company.
The reputation of any company is apparently a huge matter. As per the details from McDonald’s
website, they have acquired strides to solve the key social censures that they have been there
for past decades. For more consumer awareness, the company has also started providing their
customers relevant information about nutritional substances of their products. This was done to
counter the arguments of obesity charged against the McDonald’s products. In the same way, the
consumers were also provided freedom in choosing whether or not they want to purchase their
meals. This one is tied up with the socio-cultural influence factor of the market on which they will
operate. For example, operations in Arab countries/ Muslim Dominating countries require their
meat to be processed in accordance with Halal’s Law requirements. And this is one of the prime
reason which led McDonalds to eliminate beef, pork and Mutton out of India’s product menu.
There is also other little consideration like employment standards, and quality requirements that
company should talk into account during the operation. Otherwise, smooth operations will be hard
to achieve.

Conclusion
From the detailed analysis on strategic management of McDonalds in three different countries
namely India, U.K, and China, it is crystal clear that the strategic and operational management
plan of McDonalds has positioned it as the largest fast food corporation not only in UK but also
in other countries too. On the basis of our PESTEL analysis, we can also conclude that its
business model, which it has developed on the basis of consumer preferences is also one
reason for it to emerge as one of largest food chain in these three countries. The ban of
mutton, beef and chicken in India just to make its business model in sync with Indian consumer
is one such example. As a whole, the McDonald’s strategic thinking and operational
management rests on the enhanced flexibility on its customer service i.e. Quality service with
smile, Business model i.e. made on basis of consumer customs and tradition and analyzing the
strategic edge in light of competitive advantage, business level strategies among others.