A Highlight Of India Foreign Investment Policies

Published Date: 02 Nov 2017

Introduction

Since its founding in 1948, McDonald's has grown from a family burger stand to the world’s leading food service retailer. By the end of 2010, McDonald's had grown to 31,967 locations in 119 countries, servicing 58 million daily customers worldwide (Chaturvedi, 2011). McDonald's are now so ubiquitous around the globe that The Economist publishes a global ranking of currencies' purchasing power based on the prices charged at the local Mickey D's, dubbed the Big Mac Index.

In India, McDonald’s is a joint-venture company managed by two Indians. Amit Jatia’s company was selected to own and manage McDonald’s restaurants in the western and southern region. Vikram Bakshi’s company was chosen to own and manage McDonald’s restaurants in northern and eastern region.

Celebrating over 12 years of leadership in food service retailing in India, McDonald’s now has a network of over 160 restaurants across the country, with its first restaurant launch way back in 1996. Prior to its launch, the company invested four years to develop its unique cold chain, which has brought about a veritable revolution in food handling, immensely benefiting the farmers at one end and enabling customers to get the highest quality food products, absolutely fresh and great value.

Overview

A highlight of India foreign investment policies and economics indicators such as GDP, inflation rates, foreign exchange reserves & FDI are included in the overview of the selected country part. To understand more detail macro-environment of trade & investment in India, a research had been conducted to analysis cultural & societal, political & legal, economic & trade, competition & technological, and financial of India.

An analysis had been done to identify the business potential and business risk while enter the selected country. Business potential will be fully utilized so that more market shares can be gain. Insists of this, business risk such as competition from competitors, opinion about fast food from local people and other risk should be handling carefully in order to reduce the chances of failure.

McDonald’s utilize a localization strategy in its restaurants based in India. It benefits from the ability to quickly adapt to local trends. These are the few menu items which are being developed by McDonald’s in India according to local taste and culture, such as Chicken Maharaja Mac Burger, Mc Veggie Burger, Mc Aloo Tikki Burger, Paneer Salsa Wrap, Crispy Chinese, McCurry Pan, and Pizza McPuff. It is no secret that organizational structure is linked to market strategy. McDonald’s develop a Geographic Area organizational structure in its India market. McDonald’s set up two joint ventures on a 50:50 basis with two local Indian entrepreneurs. McDonalds as the franchise giving control to business owners or though distribution. In term of operation activity, the aspects of employees and customers had been discussed.

Conclusion

As conclusion, it will be finalized with key success factors of McDonald’s in India and recommendations for McDonald’s India to gain more competitive advantages in India. Therefore, continuous improvements are important for McDonald’s to compete in this country.

Overview of the Selected Country

India is the world’s second most populous country. In addition, India with the population of 1.21 billion is going through an epochal transformation to become one of the fastest growing emerging economies. India was part of the British Empire until 1947, when the Indian subcontinent was partitioned along religious lines into India, where Hindus were in the majority, and Pakistan, where Muslims were dominant (Hill & C, 2007). The eastern part of Pakistan became the independent nation of Bangladesh in 1971. The new country of India adopted many aspects of British government, including the parliament system, a strong independent judiciary, and a professional bureaucracy. For most of its post – World War II history, the country has relied on state ownership of key industries – including power, transportation, and heavy industry – as a critical element of its economic development efforts (India Country Profile).

India’s bureaucracy can be cumbersome and slow to provide documents necessary to do business in the country. Until 1991, India discouraged foreign investment, limiting foreign owners to minority positions in Indian enterprises and imposing other onerous requirements (Shenkar & Luo, 2004). For example, as a condition for remaining in the country, the Coca-Cola Company was retroactively required in the 1970s to divulge its secret soft drink formula. Coca-Cola refused and chose to leave the market. Coca-Cola subsequently reentered the Indian market as a result of Prime Minister Rao’s 1991 market-opening reforms, which reduced trade barriers, opened the doors to increased FDI, and modernized the country’s financial sector. (Euro monitor International publishes thousands of country, market and lifestyle).

GDP growth in fiscal year 2011-2012 was 6.5%. Among the various components, the share of service sector in GDP has gone up. The service sector contributes to 59% to the GDP compared to 27% of industry and 14% of agriculture." Inflation rates in India have been increasing since year 2007. It was 4.7% in year 2007-2008 to 7.69% till March, 2012.

The export growth was 20.9% in year 2011-2012 taking the exports to 303.7 billion. The Foreign Investment Inflow during year 2011-2012 has gone up to a record $64.3 billion. The Foreign exchange reserves during year 2011-2012 have gone up to a record $289.39 billion. Given the large foreign exchange reserves, the government has made early repayments of high cost loans to World Bank and Asian development bank.

Import

It is indicated that India’s import during Dec, 2011 were valued at US $488634. The main import goods are crude oil, machinery, gems, fertilizer, and chemicals. Besides, the main import partner is China with 10.8% and following by Saudi Arabia 6.9%, United States 6.7% and United Arab Emirates with 5.1%. (Resources from: India’s Macroeconomic Indicators).

Export

On the other hand, India’s export during Dec, 2011 was valued at US $303730. Oil exports are the highest exported products that have increased by 38.5%. Meanwhile, agricultural products have increased by 17.4%. Agricultural exports of India mainly include raw cotton, rice, tobacco, sugar, spices, and wheat. Beside that, other export goods such as software, petroleum products, textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures. The main export partners are United Arab Emirates with 12.3%, United States with 11.7%, and follow by China with 5.4% and Singapore with 4.5% (Resources from: India’s Macroeconomic Indicators).

Foreign Direct Investment Inflows

Foreign direct investment inflows during year 2008-2009 were US$28 billion, in 2009-2010 there was a drastic grow into US$70.1 billion. It was a 250% of the growth over the previous year. In year 2010-2011 the total FDI inflow was US$66.3 billion with 5.5% of decrease compare with previous year.

The increasing in year 2009-2010 is mainly cause by the attraction of several sectors such as real estate, construction activities, service sector, telecommunications and electrical equipment (computer software). Mauritius is the largest source of FDI in India with 43.50% of total FDI inflows. This is because the tax benefits may have encouraged investors to source their funds back to India through Mauritius. It is surprising to note that Singapore is the second largest source of FDI and top Asian nation to invest in India, 8.96% of total FDI inflows. However in 2010-2011 (up to Dec.2011) it was US$ 66.3 billion. It shows there are slightly lower compare to previous value, and when it reach Dec 2012, it is declining to US$64.3 whereby some of little portion of decrease comparing with previous year (Resources from: India – A Brief Profile.).

Foreign Direct Investment Outflows

In 2010 FDI outflows was US$ 14.8 billion, there shows some increment in year 2011 with US$ 16.8 billion. There was slightly decrease in year 2012 with US$ 14.8 billion. While in year 2011 it was US$ 16.8 billion. UK, US, Canada, Indonesia, Norway were the top 5 leading destinations of the investment, and Singapore place at the 6th. In year 2011 (Jan-Dec), UK in the 1st of the list and India invested US$ 5.3 billion. There shows decline compare with year 2012 (Jan-Jun) with the value of US$ 14.8 billion (Resources from: India – A Brief Profile.).

Introduction of Selected Company

McDonald’s is the world’s leading food service retailer with more than 33,000 restaurants in 118 countries serving more than 67 million customers each day. McDonald’s in India is locally owned and managed companies run by Indians, employing local staff, obtain from local supplier to serve its customers. Indians who stay in city in Mumbai and Delhi typically ate out three to five times a month, according to AT Kearney, the management consultancy. In the 12 years since then, that average frequency has doubled and analysts forecast that by 2011 the Indian quick service restaurant market will be worth 30,000 crore.

In India, McDonald's has two Indian entrepreneurs: Amit Jatia, Vice Chairman, Hardcastle Restaurants Pvt. Ltd, which has been awarded a Development Licensee status by McDonald's Corporation, U.S.A, spearheads McDonald's operations in West & South India, while McDonald's restaurants in North & East India is managed by Vikram Bakshi's Connaught Plaza Restaurants Private Limited, which is still a Joint Venture with McDonald's Corporation. (McDonald’s India Profile)

McDonald's India is a joint venture between the Oak Brook, Ill., company and two domestic partners. McDonalds’ India opened its first family restaurant at Basant Lok in October, 1996; today it has 250 restaurants across India. In Indian market, it is huge sub-continent and 4 times the population of the US. In addition, Indian market is the 4th largest economy which is ahead of France, Russia, UK, China and Japan. While India is one of the biggest markets in the world, it is also the only country in the world, where McDonald’s doesn't serve any beef or pork in any form, in any of their 250 outlets (and counting) across the country.

For Hardcastle Restaurants Pvt. Ltd ('HRPL'), the transition to a Development Licensee implies a higher level of commitment by McDonald's Corporation as it enhances its trust in the local partner. McDonald's ensures that the evolution to a Development Licensee takes place only after the financial strength, viability, profitability and long - term sustainability of the business is assured. (McDonald’s India Profile)

HRPL is expanding its reach by expanding the portfolio and access points with formats like from kiosks; drive thru, web-delivery and petrol pumps in addition to the restaurants. In 2012, HRPL plans to open other 35-40 McDonald’s restaurants in West and South India.

McDonald’s India always look forward for the continually review and improve their menu offerings to make sure that they not only meet customers’ demand, but also more than that. As a result, they keep introduced a series of ongoing value options to enable customers to appreciate McDonald’s India effort.

India is home to one of the most ancient cultures in the world dating back over 5000 years. India’s one billion people, growing middle class, and low per capita consumption of fast food made it a highly contested prize in the global CSD market in the early twenty-first century. At the beginning of the twenty-first century, twenty-six different languages were spoken across India, 30% of the population knew English, and greater than 40% were illiterate. At this time, the nation was in the midst of great transition and dichotomy between the old India and the new was stark.

3.0 Research Analysis – Macro-environment

3.1 Cultural and Societal Analysis

3.1.1 Cultural Perspective

Religion

In the United States, beef is a popular and common ingredient found on fast food menu. Majority of the population in India are followers of Hinduism. It also consists of Muslims. As the religion differs in the two countries, so do their eating habit. Diets in India are often impacted by many different religions in India. The major issue is Hindus don't eat beef. Hindu believers consider the cow scared and holy. If they happen to eat its meat, it is considered a grave sin. Muslims did not eat pork.

Language

McDonald's use "I'm lovin' it" as an international branding campaign. In India, McDonald's use English language as a slogan of "I'm lovin it". Beside this, they do use English in the order menu. They may use dual language whether in English or Tamil to serve customers or communicate among themselves.

Aesthetics

Design Elements of McDonald’s Logo:

The Golden Arches are the symbol of McDonald's, the global fast-food restaurant chain. Originally, real arches were part of the restaurant design. They were incorporated into the chain's logo in 1962, which resembled a stylized restaurant, and in the current Golden Arches logo, introduced 1968, resembling an "M" for "McDonald's" (Golden Arches, Wikipedia).

Created by Jim Schindler in 1962, McDonald’s logo has proven itself to be an insignia of multinational business expansion. Recognized directly with the US, McDonald’s logo is also labeled as "part of Americanization and American cultural imperialism". Elegance, significance and solid corporate character are clearly depicted by the golden arches of the McDonald’s logo. Later in 1968, the name "McDonald’s" was adjoined with the McDonald’s logo (Golden Arches, Wikipedia).

The McDonald’s logo is used worldwide to project the meaning intended by the company and also to avoid tarnishing of the company’s proposed picture. McDonald’s logo encompasses the durable characteristics of the food chain.

Color of McDonald’s Logo:

Two prominent shades, golden and red, are used in the McDonald’s logo to represent its bold nature. Golden hue is employed to color the two arches, now merged to form "M" in the McDonald’s logo. Nonetheless, the red color is utilized to fill the background of the distinguished McDonald’s logo. Boldness, power and strong corporate image are truly reflected by the use of these two confident colors (McDonald’s Logo).

Font of McDonald’s Logo:

In spite if the "M" on McDonald’s logo, the insignia also grips the name of the food chain. "McDonald’s" has been imprinted in a thoroughly simple font which defines the bold picture of the firm. The simpler the font of the logo, the more radiant it becomes for the spectator (McDonald’s Logo).

Ronald McDonald

Ronald McDonald is a clown character used as the primary mascot of the Mc Donald's fast-food restaurant chain. In Thailand, Ronald McDonald greets people in the traditional Thai "wai" greeting gesture of both hands pressed together. The Thai version of the company mascot was created in 2002 by the local Thai franchise, McThai. The stature has also been exported to India and other Buddhist countries where a similar gesture is used (Ronald McDonald).

Education

McDonald’s recruits people at different levels. McDonald's employed more than a million mostly young people around the world and provided them with work opportunities. McDonald’s never stops its training. Their training policies are based on the philosophy of McDonald’s founder Ray Kroc who believed that, "If you take care of your people, the business takes care of itself". Furthermore, training is conducted on-floor and classroom. The training provided through Learning and Development Team with exposure to the various aspects of the business.

Manners and customs

McDonald’s globally is eminent for the high degree of respect to the local culture. In order to respect the local culture, India is the first country in the world where McDonald’s does not offer any beef or pork items.

Values and attitudes

Respect for elders is one of the Indian values. For that reason, Mc Donald’s do give training program on respecting the elders and to disable people. They do practice it on-the-job training. Their supervisor will observe and assess them through key performance index.

3.2 Political and Legal Analysis

Political System in India

Nowadays, India is a federation of 28 states and 7 union territories and formally this federation is known as a Union and is a Multi-Party system country where the structure of the state is both Unitary and Federal in India. In fact, India is the largest democracy in the world. Ostensibly the head of the country is the President in whom all executive powers are vested, but eventually the real administrator of the country is Prime Minister. After the national elections are held, the President calls the most suitable candidate to form a government, which known as the central government. Generally this candidate is the head of the largest party in the parliament.

Moreover, National Party and state party are the political party in India. Political party that in 4 or more states is consider as National Party. Furthermore, members that involved in political system are President, Vice President, Council of Minister, Parliament, Rajya Sabha and Lok Sabha. President is the head of executive of Union while the Vice President is Ex-Officio Chairman of Rajya Sabha. Both hold office for 5 years. The Council of Ministers is the supreme governing body which conducts all decisions that relate to administration affairs and proposals for legislation to President. Parliament is the legislative arm of Union which consist President, Rajya Sabha and Lok Sabha. Members of Rajya Sabha are elected by members of Legislative Assemblies of states while Lok Sabha is via direct election on the basis of universal audit franchise. The system of government in states closely resemble of the Union.

Legal System in India

Basically, Indian Constitution was executed on the basis of English Common Law. Furthermore, it assurances equal right of all citizens, prohibits discrimination on gender, race, religion and others and allows worldwide franchise. By the way, India government sets goals for the welfare of the citizens according to "directive principles of state policy" such as medical care. Therefore, India Constitution is one of the largest in the world and comprehensive in its range.

All franchising agreements involve the transfer of some form of intellectual property, either an invention or a patent for the invention or a design (in the case of a manufacturing agreement), or a trademark or trade name or a business format / know-how / trade secret (For example McDonald’s and Barista Coffee Chain) or copyright (in the case of character merchandising agreements). Since the intellectual property license lies at the core of a franchise, the laws governing licensing of intellectual property constitute the heart and arteries of franchise laws.27. An understanding of issues that could arise in this arena is vital for any franchising business (David, 1995).

McDonald's adopted the trademark "BIG MAC" for the first time in 1968 in USA. In India, they got registered their marks BIG MAC, McDonald's as well as their corporate logo 'M'. According to them, the word "BIG" was registered on the condition that the same would not append exclusivity, while "MAC" was allowed to be put to exclusive use by them (Nair, 2008).

As a matter of policy, McDonald's does not make direct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators.

3.3 Economic and Trade Analysis

India is having a mixed economic structure; it is neither fully capitalistic nor fully socialistic. It is neither completely an open system nor a fully free market system. India is the 11th largest economy in the world by nominal value of $1.242 trillion and the 4th largest by purchasing power parity (PPP) of $3.528 trillion. The Indian’s per capita income is $1032 and per capita of PPP is US$2932 with the GDP growth of 6.5%. Services sector is the main character that improves the GDP of India. Besides, the currency of the country is 1 Indian Rupee (INR) =100 Paise. The exchange rate as on 15th July 2012 is 55.7 INR the USD.

From year 1947 to 1991, India is under social democratic which characteristic by extensive regulation, protectionism and public ownership. Economic reformed to economic liberalization from the socialist-inspired economy of post independence India in year 1991 and the country began to experience rapid economic growth by opened markets to international competition and investment. The reforms of 1991 were caused by a serious macro-economic crisis, in both fiscal and foreign exchange sectors of the economy. Besides, India is an emerging economic power with human and natural resources and huge knowledge base. The labor force in India is base on the sector of agriculture, industry and services such as cotton, tea, and textile.

Therefore, India had become the second-fastest growing major economy. Economist also predicts that India will be the leading economies of the world in year 2020. However, India still facing major problems such as the economic development has widened the economic inequality across the country. Because of high growth rate, approximately 80% of its population lives on less than $2 per day. Children under 3 years old are underweight and third of all men and women suffer from chronic energy deficiency although Green Revolution brought end to famines in India.

McDonald’s, the global fast food giant has 58 outlets on 2004 and they are having 250 outlets 2012 at China after nine years, the percentage of change is 431%. It indicated that McDonald’s India having an operating environment that can get fair return on investment and the numbers who can afford their prices increase from time to time.

McDonald’s have been successful wherever there is a huge consumer base. In India as economic growth empowers larger numbers of people with greater affordability, the market for their products will increase. India has leveraged its strengths in software and English language. McDonald's is all set to raise prices over the next three years, simultaneously marking a shift in its India strategy in tune with the times.

A unique sense of dedication and commitment characterizes McDonald's India where there is a commitment to be driven by the leadership of local owners. The commitment is to provide quality products and fast friendly service at a real value to support other Indian businesses through local sourcing.

Setting up this extensive cold chain distribution system has involved the transfer of state-of-the-art food processing technology by McDonald's and its international suppliers. Start from 2012 McDonald’s India will invest Rs 100 (billion) crore annually, adding 30 restaurants per year in the western and southern region in the next three-four years.

3.4 Competitors and Technological Analysis

Competition from local food retailer

The competition from the local food retailers was forceful. The local food retailers had been doing business for years in India. In fact, they more familiar towards the market and understanding the local taste gave them a competitive edge. There were numerous eating joints which offered snacks and meals with affordable price tags. (Will, Wild, & Han, 2008).

Organized food retailing was dominated by the north Indian style and the south Indian style restaurant chains. The metropolitan cities and some developed urban areas offered superior dining experience through the existence of some fine, classic restaurants. But the price was expensive and only a select group of customers could afford to make visits there. On the other hand, the size of the unorganized food retailing was larger and comprised of roadside food vendors, dhabas (the eateries on the highways) and on the outskirts of the cities and a plethora of small eateries. Local food in a large assortment was widely available within acceptable price ranges. It was observed that food choices made by consumers were impulsive. Aroma, taste, habits and visibility worked on the subconscious level and played a major role in affective decision making. The local food business exactly understood the psychology of the customers and operated accordingly. The mass markets in India had their own set of preferences.

Technological Analysis

McDonald’s India is one of the few countries that provide a home delivery service. In Western India, this service is currently available at select localities. The restaurants will deliver to neighborhoods which are up to 10 minutes away by road. Delivery time is from 11 a.m. – 11 p.m.

3.5 Financial Analysis

Business Opportunities / Risk Analysis

4.1 Identification of Business Potential

4.1.1 Respond to social changes -

Respond to social changes - by innovation within healthier lifestyle foods. Its move into hot baguettes and healthier snacks (fruit) has supported its new positioning.

4.2 Identification of Business Risk

Franchise Model

Only 15% of the total numbers of restaurants are owned by the Company. The remainders are operated by others through a variety of franchise agreements and joint ventures. The company gets an annual fee of $45,000 on yearly basis including a royalty of 12.5% which includes the McDonalds franchise application (Qayyum & Sehzad). The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, McDonald's may also collect rent, which may also be calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract, age, country, and location, the Corporation may own or lease the properties on which McDonald's franchises are located. In most, if not all cases, the franchisee does not own the location of its restaurants.

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 (McDonald’s Project).

McDonalds faced barrier when entry into Indian market since India’s suspicion of foreign business. For Indian, price of McD's is very expensive. They also believe the food is processed, not fresh, overpriced and not healthy. Instead of this, McDonald’s also facing the problems which is pointed by public, it is promoting unhealthy food with a risk of cancer and heart disease, taking advantage of children with its advertising and marketing, and cruelty to animal

Therefore, McD's in India is mostly packed with Americans who miss the taste of home. Due to certain extend, McDonalds had received extraterrestrial status when enter into Indian market. The company needs to follow many laws as impediments to continue operate. However, McDonalds is under protection after the alteration in the oversight of the Foreign Investment Protections Board (FIPB). As a result, many problems had out of McDonalds’s control (Kulkarni & Walfried, 2009).

Vegetarianism

The major issue was beef. Cow being sacred and worshipped, beef could not be served. Muslims did not eat pork. The business risk is McDonald’s India need to reinvestigate the local taste and design a special menu for Indians. The challenge was to change the form of the worldwide popular Hamburger to make an entry into India.

The population of a billion was undoubtedly a promising opportunity for an international company. McDonald’s accepted the challenge and created the Aloo-Tikki Burger known as McAloo Tikki especially for the Indian vegetarian customers. McDonald’s even separated the non vegetarian cooking process and the vegetarian cooking process to convince the customers of the "Shudh Shakahari Experience’ which means pure vegetarian experience.

The case is McDonald’s India admits using beef fat for 'vegetarian' French fries (Davis, 2001). In 2001, vegetarian groups, largely Hindu and Buddhist, successfully sued McDonald's for misrepresenting their French fries as vegetarian. The American company, which has served more than 200 billion portions of french fries around the world, confessed to a method of using beef fat to partly fry chips before they are sent to restaurants. They are then frozen and refried on the premises using vegetable oil (Davis, 2001). At the end, McDonald’s faces a $100 million (£70 million) lawsuit after apologizing to customers for failing to admit that beef fat was used to fry its chips. The company promised that the fries in future will be "do not contain any beef or animal extracts of whatsoever kind".

5.0 Implementation

5.1 Strategy

McDonald’s uses demographic segmentation strategy with age as the consideration. When McDonald’s entered in India it was mainly perceived as targeting the urban upper class people. An ideal strategy was to focus on customer’s ability to pay and tap the rich and upper middle class population in India. Price is sensitive towards Indian consumer market. In India McDonald’s, it can be observed that ambitious middle, upper middle and affluent classes were keen to combine eating with fun. Nowadays it positions itself as an affordable place to eat without compromising on the quality of food, service and hygiene. As a result, people from all walks of life will sit and eat together.

McDonald’s India is much higher adaptability. With the various selections, customers have the right to taste their favor. McDonald’s in India able to respect for local culture with prepare the special Indian menu, it excluded pork or beef items in India. They also reformulated own products using spices favored by Indians. McDonald’s always fulfill customers’ satisfaction with fully effort.

With the high number of vegetarians in India, about half of the menu at McDonald’s in India is vegetarian. That's not to say that McDonald's doesn't serve any non-vegetarian products in their Indian restaurants. They do serve chicken and fish burgers as option available for the non vegetarians. Chicken that not Halal but mechanized slaughtered by using machines along with fish are the only meat products used in India. McDonald’s even separated the non vegetarian cooking process and the vegetarian cooking process to convince the customers of the "Shudh Shakahari Experience’ which means pure vegetarian experience.

In order to convince and change the perception of the customers about the burgers they offered, McDonald’s made attempts to clarify their stand about beef in India. So the world famous hamburger was without meat. This was indeed a classic case of product adaptation, to gain foothold in a new market (Sunil, 2010).

Apart from continuous efforts to improve quality, special focus is on the maintenance of purity. All these things have helped a lot in creating a strong positive image and perception in the Indian customer mind.

5.2 Structure

5.3 Operations

i) To Employees

McDonald’s recruits people at different levels. McDonald's employed more than a million mostly young people around the world and provided them with work opportunities. It is depending upon the job requirements. The basic level being 12th , undergraduates, Graduates (Generalists and specialists) and candidates from specialized streams like Masters (MBA’s and others), Hotel Management, Professionals of Finance/ HR/ Marketing/ Engineering etc. McDonald’s never stops its training. Their training policies are based on the philosophy of McDonald’s founder Ray Kroc who believed that, "If you take care of your people, the business takes care of itself". Furthermore, training is conducted on-floor and classroom.

The training provided through Learning and Development Team with exposure to the various aspects of the business. Crewmembers are trained extensively on all food safety and food handling processes. Trainees work shoulder-to-shoulder with crew trainers while they learn the operational skills necessary for running the restaurant where it begins from the front counter to the grill area. McDonald’s training programs are more internally devised than external training programs. The punch line "I’m loving it" is an attempt to show that the employees are loving their work at McDonalds and will love to serve the customers.

In order to continue improve, McDonald’s set up a Hamburger University, Oak Book in USA. According to record, each headquarter of each country will recommend list of employees to enter the university so that they have opportunity to learn, this also included management team of McDonald’s. For example, Amit (one of the local owner of McDonald’s India) has undergone hands on training for a year at McDonald's in Jakarta (Indonesia) as well as obtained a degree in Hamburgerology from the Hamburger University, Oak Brook (Illinois, USA). Beside, managing director of Hardcastle Restaurant Pct. Ltd (HRPL) also attended an intensive marketing diploma program at the Hamburger University

ii) To Products

When operations McDonald’s in India began, it positioned itself as a place to visit and enjoy with the baseline "McDonald's mein hain kuch baat" ("There’s definitely something about McDonald’s") in their advertisements. Consequently, it encouraged people to try the McDonald's experience. After few years, McDonald's had been hugely accepted by Indian customers. McDonald's develop the communication strategy and move on from trying to encourage and motivate people to visit for the first time and make McDonald's a regular experience. (Kulkarni & Walfried, 2009).

After McDonald’s established itself and people knew what McDonald's was all about, the baseline was changed to "Toh aaj McDonald's ho jaye"("Let it be McDonald’s for today"), which talked about an everyday experience. The purpose was to continue positioning McDonald's as a comfort zone for families.

Besides that, McDonald’s in India provides the healthy menu which is not found in United State or other countries. The vegetarian fare at McDonalds’ in India included McVeggie, McAloo Tikki, Paneer Salsa Wrap, Crispy Chinese and Pizza McPuff. Moreover, the non-vegetarian fare at McDonalds India contains Chicken Maharaja Mac, McChicken, Filet-O-Fish, Chicken McGrill and Chicken McCurry Pan.

ii) To Customers

McDonald’s had re-structured its operations to address the special requirements of vegetarians. Extraordinary care is taken to ensure that the vegetable products are prepared separately, using dedicated equipment and utensils. Separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving (Food Safety & Hygiene). In fact mayonnaise and the soft serve are also 100% vegetarian. In spite of, only vegetable oil is used as a cooking medium. Besides, cooks preparing vegetarian dishes wear distinctive green aprons and non vegetarian will be in purple apron. To serve vegetarian, the company came up with a completely new line of vegetarian items like McVeggie burger and McAlooTikki (Eric, 2009)

McDonald’s in India integrate economic and socio-environmental issues in order to respect corporate culture. For instance, Mc Donald took internal responsibility for the well–being of its employees and environmental friendliness of its operations including external concerns such as environmental conservation and provides employment opportunities. Mc Donald’s also faced environmental concerns by changing some food container to biodegradable materials. In addition, the company attempt to support efforts against obesity by introducing healthy options in its menu (Amit, 2010).

6.0 Conclusion

Reasons McDonald’s will success in India.

McDonald’s India sensitive towards local taste. To survive in India, McDonald's had designed and develop a menu especially for the customers containing the Indian tastes and preferences. In addition, there is no beef and pork on the McDonalds' menu in India due to cater Indian and Muslims religious sensitivities (Mathur, 2011).

"It really doesn’t make sense to sell beef in a country where 85% of the population doesn’t eat it or will even a restaurant where beef is served" – Vikram Bakshi, Managing Director, McDonald’s India

The second reason is affordable prices that offer to Indian customers after they make their stable move in India. For example, one set meal of Chicken Maharaja Mac only cost Rupees 78, where currency exchange is 1 US$ =Rupees 45.

In addition, McDonald’s India also promoted a family-dining experience. It is based on Indians like eating with families and friends. After McDonald’s established itself and people knew what McDonald's was all about, the baseline was changed to "Toh aaj McDonald's ho jaye"("Let it be McDonald’s for today"), which talked about an everyday experience. The purpose was to continue positioning McDonald's as a comfort zone for families.

McDonald’s India is one of the few countries that provide a home delivery service. In Western India, this service is currently available at select localities. The restaurants will deliver to neighborhoods which are up to 10 minutes away by road.

Continued focus on corporate social responsibility, reducing the impact on theenvironment and community linkages.

Franchise Model

Only 15% of the total numbers of restaurants are owned by the Company. The remaining 85% is operated by franchises or joint venture. 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 geographics.

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.