This paper will discuss one expansion situation of McDonald's, the world's largest international restaurant chain. The time was 1996, and the place was India. McDonald's wanted to go into that nation and serve its millions of potential customers its menu. The one critical problem was that India, basically a Hindu nation, does not eat beef. This paper will begin with a brief discussion of McDonald's history. This will be followed by a brief cultural snapshot of India, and how the McDonald's situation came to a head.
McDonald's has more than 15,000 locations in 79 countries and a new McDonald's restaurant opens every 13 hours. 85% of the restaurants are independently owned and operated, with company-run stores making up the other 15%. McDonald's is the second-most recognized brand in the world - only Coke (which McDonald's serves) is more recognized. (See Attached Pie Chart)
The founding of McDonald's is the stuff of American legend. The outline of the story is how salesman Ray Kroc discovered two black men, the McDonald's Brothers, who had a drive in restaurant in California that sold a simple menu of hamburgers and milk shakes.
Kroc bought the brother's out and began duplicating the formula of simple menu and low price and turned his company into a worldwide success. As the corporation grew and expanded into new countries, it did develop an awareness of cultural sensitivity. Although the McDonald's in India was highlighted in the worldwide press for several months in October and November, 1996, as a colossal marketing mistake and an ill-conceived marketing plan, the decision to move into India was not a careless one.
A 1997 report, roughly at the same time of the case, stated that India's middle class is the size of the population of the United States or several European countries combined, which is why makers of everything from corn flakes to cars flocked to the country after free-market reforms in l99l began...