Fast food retailing in India case analysis

1. Fast Food Retailing In
India Case Analysis
By group 17 (The Right Writers):
Aryan Bhat – R600218092
Pravesh Nautiyal – R600218085
Abhishek Chauhan – R600218084
Shristi Soni – R600218090
Mohd A Vahab – R600218088

2. Contents
• Introduction
• Indian Retail Scenario
• Challenges In Entering Indian Markets
• Strategies
• Analysis
• BCG matrix
• Perpetual Mapping
• Porters Five Force
• Conclusion
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3. Introduction
• McDonald's is today a leading player in the global branded quick service
restaurant segment in virtually every country.
• There are more than 32,000 McDonald's restaurants serving in 119
countries. More than 75% of McDonald's restaurants worldwide are
owned and operated by independent owners serving almost 47 million
customers each day.
• The first restaurant was established in 1955 in Des Plaines, Illinois, USA.
• In 1993 McDonald’s entered India through a 100% subsidiary MIPL
(McDonald’s India Private Limited) which formed two 50:50 joint
ventures (JV) with Connaught Plaza Restaurants to manage North and
East India; and Amit Jatia of Hardcastle Restaurants for West and South
India.
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4. INDIAN RETAIL SCENARIO
• Total Private Consumption Expenditure in
India – 375 Billion USD
• Retail Sale – 205 Billion USD (55%)
• Organized Retail – 6.2 Billion USD (3%)
• Retailing – 35% of GDP
• Outlet Estimates – Over 12 Million
• Format – Only 4% larger than 500 sq.ft.
• Second Largest Employer after Agriculture
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5. Retail Brands
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6. Supply Chain
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7. Suppliers of Raw Materials for McDonald
Burgers in India
Source: https://www.foodsafetymagazine.com

8. India Fast Food Market Report 2015 - 2020:
Market is expected to grow at a CAGR of 18%
• Fast food market in India is expected to be worth US$ 27.57 billion by
2020.
• About 10% of the fast food market in India is organized. NOVONOUS
estimates that the organized fast food market in India is expected to
grow at a CAGR of 27% by 2020.
• Vegetarian fast food constitutes of around 45% of the whole fast food
market in India and is expected to grow at a CAGR of 18% by 2020.
• Fast food Casual dining restaurants (CDRs) market in organized fast food
sector in India is projected to grow at a CAGR of 27% by 2019-20.
• Non casual dining restaurants (NCDR) or fast casual dining restaurants
have gained tremendous market share in the last 10-15 years. Non-
Casual dining restaurants (CDRs) market in organized fast food sector
in India is also projected to grow at a CAGR of 27% in next 5 years.
• Quick Service Restaurants (QSRs) market in organized fast food sector
in India is projected to grow at a CAGR of 20% by 2019-20.

9. CHALLENGES IN ENTERING
INDIAN MARKETS
• Social and cultural implications of Indians switching to western breakfast food
• Indians wanted to taste American fast food, but it could not be a substitute
for Indian food. Hence adapting McDonald’s menu to Indian tastes was
critical if they were to succeed in India.
• One aspect unique to India was that half its population was vegetarian for
whom a separate menu had to be created.
• Religion/Cultural constraints.
• Environmental and animal activists opposed the entry of fast food (like KFC
and McDonald’s) as this type of junk food destroy the ecological balance
and cause several behavioral disorders because of the fatty and unhealthy
foods.
• Perception that McDonald’s can only be afford by rich people.
• Poor transportation and storage infrastructure in India.
• Lower-quality agricultural products.
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10. NCLAT asks McDonald’s, Vikram Bakshi to
settle dispute by August 30, 2017
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Source://economictimes.indiatimes.com/articleshow/60220353.cms?utm_source=content
ofinterest&utm_medium=text&utm_campaign=cppst

11. Strategies
• SEGMENTATION, TARGETING AND POSITIONING
• McDonald’s uses demographic segmentation strategy with age as the
parameter.
• The main target segments are children, youth and the young urban family
• Cluster wise expansion strategy
• McDonald’s concentrates and consolidates stores in one region before moving
to another. The company plans to begin with East Indian region (Kolkata) and
then move to cities in other regions like Chandigarh and Ludhiana
• All-vegetarian restaurants in various pilgrimage sites
• McDonald’s mainly has all vegetarian outlets at various pilgrimage sites across
India.
• 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.
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14. Source: Perceptualmaps.com

15. Porter Five Force’s Analysis
Bargaining power of suppliers:
• The bargaining power of most of McDonalds suppliers is low which
is because of their small size and being scattered globally.
• McDonalds sources its raw material from all around the world. In
case of most their small size and isolated position does not give
them much bargaining power.
Bargaining power of customers:
• The bargaining power of customers in the 21st century has grown
very high.
• The 21st century customer is equipped with information as well as
technology and is also highly health conscious. Not just this there
are so many brands in the industry competing for market share.
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16. Threat of substitute products
• The threat of substitute products for McDonalds is moderate. There
are several brands that are offering similar products or have similar
menu items. The threat is not just from the international brands but
also from the local and smaller brands.
Threat of new entrants:
• The threat from new entrants for McDonalds is also moderate. while
there are no significant barriers to entry, still to grow into major
brand is not easy because there is still a large investment in marketing
as well as having skilled human resources as well s having the other
infrastructure required for growing into a large and global brand.
Competitive rivalry among the existing brands:
• The level of competitive rivalry among the existing brands in the fast
food industry is very high. the number of international brands in the
fast food industry has kept growing. This has kept adding to the
intensity of rivalry in the fast food industry.
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17. BCG Matrix
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18. 5 Lessons of Success That We
Can Learn From McDonald’s
1. The Kings of the cross-sell/upsell
• McDonald’s effectively takes advantage of an
opportunity to increase their sales. It’s important to
recognize that their strategy revolves around allowing
the customer to first decide what they want, then
adding value to their selection with an additional item.
2. Willing to re-invent and try new things
• The customer is always changing. It is that very reason
that success is related to the ability for a business to
evolve. While McDonald’s remains constant in its overall
appearance, the company strives to not only keep their
customers happy, but to stay aligned with their
interests.
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19. 3. Understanding the importance of philanthropy
• McDonald’s has helped the RMHC directly improve the health and
well being of children for over 35 years.
• Along with that, various McDonald’s owners do their part to serve
their local communities whether it be through mentorships
programs, awarding college scholarships, fundraisers for the RMHC,
and much more.
4. Establishing an overall brand presence
• McDonald’s also strives to captivate their audiences by re-
establishing their “I’m lovin it” theme to focus more on positivity
and adopt a “billions heard” philosophy.
5. Perfecting the art of convenience
• McDonald’s is most likely the most common name associated with
fast food. They began their fast food initiative by designing their
stores in a way that encouraged customers to eat fast.
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20. Conclusion
• McDonald’s continues product innovation and
customer satisfaction through greater customer
reach.
• In order to sustain in a very competitive market
McDonald’s has to continuously think of bringing in
new concepts into all its operations especially in
marketing.
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21. Thanks!!
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