McDonalds India: Optimizing the French fries supply chain Harvard Case Solution & Analysis

Introduction:

The brand McDonald is known to be the only brand worldwide that was able to get quick appreciation in almost all parts of the world. McDonalds is known to be a brand having high brand recognition. The company has more than 47 million customers across the globe with having largest number of restaurants all around the world. It has approximately 31,000 restaurants that are giving their services to the customers in almost 119 countries in the world. The overall products of the company include fast food items along with soft drinks as well. In addition to this, basic products offered by McDonald includes cheese products, salads, hamburgers, breakfast items, cheeseburgers, desserts, fries, and ice creams.

Moreover, the company is also providing play area and playgrounds in almost all its franchises. In addition to this, the primary strategy of the company includes expansion in various countries aggressively. The management at McDonald knows that the expansion on a global level is a major factor for the company’s success. The company is engaged not only in geographical expansion, but it is doing expansion in terms of its food menu as well. Many alternative options have been launched by McDonald for instance salads and snack wraps. The basic purpose of launching these types of meals is to promote the concept of healthy food.

McDonald History:

The restaurant was initiated by two brothers named as Dick and Mac in San Bernardino in 1940. The basic edge of the restaurant in front of another restaurant was a quick and speedy service. After eight years, the company successfully established its brand as an eating place providing quality junk food. However, the company was acquired by Ray Kroc in Illinois in the year 1955. The brand was procured by the newly formed owner Kroc and then was expanded on a more international level. Later, the business has expanded, and its growth was immense thus, McDonalds became a sign and trademark for global expansion.

India’s McDonalds:

McDonalds entered in India in 1996 through a JV with two local entrepreneurs. Those two entrepreneurs were already in charge of a restaurant named as Hardcastle and Connaught Plaza. The entrepreneurs make an equal joint venture with the parent company. In addition to this, the number of McDonalds’ restaurants in India are now more than 240. Moreover, the company is in planning to double this figure by the end of this year. Further, the company emphasizes is highly on the customization factor i.e. specifically in the menu. The management at McDonalds needs to keep in mind the religious factors of Indian culture as beef is forbidden in their religion. Moreover, beef related items are not included in the menu because of the religious preferences. The only meat used in Indian franchises contains fish, chicken and products made of vegetable and famous products in Indian franchise include McVeggie and Aloo Patties.

Moreover, the company has done customization in terms of adding local spices according to the taste preferences of local Indians. These products are based on Veg. Pizza, McAloo Tikki Burger, and McVeggie Burger and so on. Moreover, many of the Indian communities don’t eat eggs as well thus; McDonalds in India are offering Burgers and Club Sandwiches without using egg in it. In addition to this, it also offers dips, sauces, and even drinks without adding eggs in it.

Issues identification:

The primary issues faced by the company specifically in India was the unemployment rate, and that in turn increase the inflation rate in the country. Moreover, the cost of raw materials was rising as well because of the inflation factor. The manager handling McDonalds in India was concerned about the cost as well and thus wanted to eliminate import of fries outside India. Whilst India is known to be the third largest producer of potatoes in the world but less than 1% of the potatoes were up to the requirements and standards of McDonalds. The basic requirements for the fries at McDonalds are to have low sugars, high solids, long dormancy, disease resistance and rhombus in shape. The storage location and the climate in India were not suitable for the production of the desired French fries. Additionally, the irrigation procedure used in India for the production of potato was obsolete that in turn bounds the production of potatoes as well..................

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