mcdonalds

2. What were the pitfalls of the initial attempts by Mc Donalds India
to create its French fry supply chain?
• While India was third largest producer of potato in the world, less than 1%
of the potatoes were process grade.
• Mc Donalds had to create backward linkages all the way to the farm
level, hence spending over $100mn even before the stores
were opened, thus having to absorb all the supply chain cost.
• In order to supply French fries, Mc Donalds initially
created joint venture between international French fry supplier Lamb
Weston and India based Taral foods.
• The joint venture's agricultural techniques were unable to
produce potatoes of right size and containing ideal amount of solids, which
produced oily and limp fries.
• To avoid the delay in opening of store, Mc Donald's realized importing
frozen fries was the best option for the time being.

3. • But problems continued as the process for obtaining an import license was
complex and time consuming.
• After 6 months, the Indian government allowed the imports, but the
import quantity was restricted up to 800 metric tonnes of French fries.
• Import duties were very high - 56%
• Lead time of import from US was very high - 60days.
• Seeing the restrictions Mc Donald's invited another international
supplier, McCain so that it can also import 800 metric tonnes of frozen fries.
Factors which enabled McCain's success:
• McCain India's first employee was an agronomist and its second employee was
an supply chain manager thus giving them a better understanding of agronomy.
• Mccain had to bring in potato germplasam (a collection of genetic resources
that could be used to grow suitable potatoes locally)

4. • Mccain learned that cultivating potato seeds in high elevations was
ideal, so it's instituted a Shepody potato seed multiplication valley in
13000 – foot high Spiti valley
• Vista food's excess capacity helped McCain with enough potato
volume to build up small businesses with local farmers and build their
trust.
• The patty supplier Vista's excess capacity was utilised, McCain was
able to test the Indian market with small- scale production, and
McDonald's found a route for developing local supplies of French
fries making it a win-win situation for all.

5. Under McCain management, the MacFry supply chain has been
effective. what are the risks of this model? How can McDonald's
address the competitive threats from other firms moving in and
capitalizing on the large investments of time and money that
McDonalds has made?
• Natural calamities like droughts, hailstorms or improper rainfall can
destroy the crops.
• Risks of spoilage of raw potatoes and processed frozen fries
while transit.
• Risks involving proper storage of the frozen fries.
• Improper forecast of supplies requirement .
• Indian farmers still rely predominantly on monsoon for irrigation.

6. What are the options McDonald's India can pursue to meet
the huge growth in demand that has been predicted in India?
• To build a local supply chain in India, in order to increase the supply
growth from the farmers through different suppliers.
• The improved supply chain process will enable McDonald's to utilize
the potatoes by farmers to a greater extent .McDonald's should
encourage farmers to store the potatoes for a longer period of time.