McDonald's began modestly in Illinois but is now one of the largest fast food brands worldwide with over 31,000 stores. It was one of the first to perfect the fast service model in 1955. McDonald's expanded globally including to Asia, opening its first Indian location in Mumbai in 1996. In India, McDonald's works with local suppliers, architects, and labor to construct restaurants using local materials and hire local employees. McDonald's also tailored its menu for India, removing beef and pork and adding vegetarian options to suit local tastes and culture. McDonald's focuses on quality, service, cleanliness, and value to guide its operations and customer experience in India.

1. The modest beginnings of McDonald’s at Illinois in USA, turned out to be among the main
brand names in the international scene. It has been synonymous to what is widely-accepted the
fast-food concept. The company operates over thirty one thousand stores all over the world to
date. It was one of the first to perfect the concept of fast service in the food industry in its early
days of operations in 1955. Given that the products of the company are mainly western in
character; its operations have also expanded to the Asian region. The first Indian McDonald’s
outlet opened in Mumbai in 1996. In the rest of the globe, it operates thousands of store
franchises that functions autonomously.
McDonald’s in India
Around the world, McDonald’s traditionally operates with local partners or local management. In
India too, McDonald’s purchases from local suppliers. McDonald’s constructs its restaurants
using local architects, contractors, labour and – where possible – local materials. McDonald’s
hires local personnel for all positions within the restaurants and contributes a portion of its
success to communities in the form of municipal taxes and reinvestment.
Six years prior to the opening of the first McDonald’s restaurant in India, McDonald’s and its
international supplier partners worked together with local Indian Companies to develop products
that meet McDonald’s rigorous quality standards. Part of this development involves the transfer
of state-of-the-art food processing technology, which has enabled Indian businesses to grow by
improving their ability to compete in today’s international markets.
McDonald’s worldwide is well known for the high degree of respect to the local culture.
McDonald’s has developed a menu especially for India with vegetarian selections to suit Indian
tasted and culture. Keeping in line with this McDonald’s does not offer any beef and pork items
in India. McDonald’s has also re-engineered its operations to address the special requirements
ofa vegetarian menu. The cheese and cold sauces used in India is 100% vegetarian. Vegetable
products are prepared separately, using dedicated equipment and utensils. Also in India, only

2. vegetable oil is used as a cooking medium. This separation of vegetarian and non-vegetarian
food products is maintained throughout the various stages of procurement, cooking and
serving.
The McDonald’s philosophy of Quality, Service, Cleanliness and Value (QSC&V) is the
guiding force behind its service to the customers. McDonald’s India serves only the highest
quality products. All McDonald’s suppliers adhere to Indian Government regulations on food,
health and hygiene while continuously maintaining their own recognized standards. All
McDonald’s products are prepared using the most current state-of-the-art cooking equipment to
ensure quality and safety. At McDonald’s, the customer always comes first. McDonald’s India
provides fast friendly service- the hallmark of McDonald’s that sets its restaurants apart from
others. McDonald’s restaurants provide a clean, comfortable environment especially suited for
families. This is achieved through McDonald’s stringent cleaning standards, carefully adhered to
McDonald’s menu is priced at a value that the largest segment of the Indian consumers can
afford. McDonald’s does not sacrifice quality for value – rather McDonald’s leverages
economies to minimize costs while maximizing value to customers. The company has invested
Rs 450 crore so far in its India operations out of its total planned investment of Rs 850 crore till
2007.
McDonald’s India Pvt. Ltd. has moved an application to the government seeking permission for
payment and remittance of the initial franchise fee and royalty to Mc Donald’s Corporation. The
permission has been sought on two grounds: McDonald’s India would pay an initial franchise fee
of $45,000 on each of the McDonald’s restaurants already franchised or to be franchised, in the
future, in India; and a royalty equal to 5 per cent of the gross sales from the operations of all its
Indian restaurants on a monthly basis to McDonald’s International. They currently serve around
5 million customers a day and hope to grow at the rate of 50% to 70% a year.
Business Model
Franchise Model – Only 15% of the total number of restaurants are owned by the
Company. The remaining 85% is operated by franchisees. The company follows a
comprehensive framework of training and monitoring of its franchises to ensure that they
adhere to the Quality, Service, Cleanliness and Value propositions offered by the
company to its customers.
Product Consistency – By developing a sophisticated supplier networked operation and
distribution system, the company has been able to achieve consistent product taste and
quality across geographies.
Act like a retailer and think like a brand – McDonald’s focuses not only on delivering
sales for the immediate present, but also protecting its long term brand reputation.
Challenges in Entering Indian Markets
Regiocentricism: Re-engineering the menu – McDonald’s has continually adapted to the
customer’s tastes, value systems, lifestyle, language and perception. Globally
McDonald’s was known for its hamburgers, beef and pork burgers. Most Indians are
barred by religion not to consume beef or pork. To survive, the company had to be

3. responsive to the Indian sensitivities. So McDonald’s came up with chicken, lamb and
fish burgers to suite the Indian palate.
The vegetarian customer – India has a huge population of vegetarians. To cater to this
customer segment, the company came up with a completely new line of vegetarian items
like Mc Veggie burger and Mc Aloo Tikki. The separation of vegetarian and non-
vegetarian sections is maintained throughout the various stages.
Product Positioning
“Mc Donald’s mein hai kuch baat” projects McDonald’s as a place for the whole family to enjoy.
When McDonald’s entered in India it was mainly perceived as targeting the urban upper class
people. Today it positions itself as an affordable place to eat without compromising on the
quality of food, service and hygiene. The outlet ambience and mild background music highlight
the comfort that McDonald’s promises in slogans like “You deserve a Break Today” & “Feed
your inner child”. This commitment of quality of food and service in a clean, hygienic and
relaxing atmosphere has ensured that McDonald’s maintains a positive relationship with the
customers.