How does McDonalds addresses India's economic issues?

1. How does McDonald’s address India’s
economic issues?
By: Nora Davila

2. Pricing
 “Purchasing Power Pricing” or the customer’s ability to pay
 Reach a larger share of rich & upper middle class population, but not as
successful at effectively tapping middle class & lower middle class segments
 Cut prices
 Increase sales volume of its products and available for everyone
 “Our clear strategy is to bring the customers in initially & provide a range of
entry level products so that they can try new items& graduate to the higher
rungs
 80-20 menu- 80% visual & 20% descriptive. Understand what the
29,39,49,59,79,89 rupee options are
 Pricing range, quick service, convenience& no-tips attracts many school-going
customers and young middle-class families

3. Supply Chain Management
 1-operationalize its globally practiced QSCV ( quality, service, cleanliness, value)
 2- Enjoy flexibility in pricing
 3- Launch a new product when necessary
 Outsourcing model in all its markets
 95% of its raw materials is from 38 local suppliers
 State-of-the-art food processing technology to India
 Indian businesses to grow by improving their ability to compete in today’s international markets
 Works with local Indian Suppliers to improve quality & increase greater yields of agricultural
products
 Export order of approximately US $. 12 million per year

4. Infrastructure
 Major issue is the shortage of infrastructure
 Highway roads that link to the small towns in India
 approximately 22,000 registered restaurants in India
 100,000 dhabas (small roadside food stalls) that sell a variety of foods in cities and on
highways.
 By 1998, there were approximately 1,568 registered hotels in India, half of which have their own
restau- rants.
 3 In addition, large to medium-range canteens serve the food needs of various institutions such
as hospitals, prisons, defense establishments, schools, colleges and universities, railways,
airlines, govern- ment establishments, and private companies.

5. Employment Opportunities
 Every expansion McDonalds’ makes is received well by government officials
 Generates quality & long term employment opportunities for India
 Employs more than 100 people in all kinds of positions
 Income & employment opportunities to India’s agricultural workforce
 “McDonald’s is now sees as a small-or-medium-scale industry & is thus considered
as useful for generating additional employment opportunities. As long as
McDonald’s serves this purposes, government support will follow.” –Devinder Singh