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8-Corporate responses to a changing World : the case of McDonald's in India (Think global act local)

McDonald’s is the leading name in the world of fast food. It is a global brand operating across the World (McDonald's, 2019) and its Main strengths is its global brand leadership in the fast food industry. McDonald’s has adopted a Market Development strategy for expanding into growing economies, especially India. The motivation that had driven McDonald’s decision to pursue FDI was mainly the size of the Indian market and its growth potentials . Using the OLI framework McDonald established a joint-venture to be able to exhibit their ownership advantages and compete efficiently by transferring the company unique brand across borders . The entrance in the Indian market has been a success story which now aims to replicate in other parts of Asia. Its corporate strategy combines global integration and local responsiveness elements. It could be summarized it in the “think global act local” slogan. According to the Integration-responsiveness framework McDonald’s has adopted a “transnational Strategy” to enter the Indian market, an approach that has allowed the Company to take advantage of certain economies of scale(standardization) while simultaneously making necessary changes to products based on local needs(adaptation).


Corruption, bureaucracy, poor infrastructure could make India a hostile place to invest (Doing business, 2019) but McDonald’s looked at the long-term benefit of entering in a Country with an increasing middle-class population and adapted its business model. India is a nation comprised of Hindus, who do not eat beef, Muslims, who do not eat pork, and Jains, who refuse to eat meat of any kind. Firstly, McDonald’s has entered in India with a franchise business model that allowed its franchisee-members to share the risks and rewards from the discovery and exploitation of new business opportunities. Secondly, by adaptation and innovation, “McDonald's has developed a menu specifically for India (Indians are vegetarian) with 100% vegetarian selections to suit Indian tastes and culture” (McDonald's, 2019). A perfect example of McDonald’s sensitivity to other cultures and a way in which it integrated itself, as a brand, into this unique market.


The offer might be different in India (product local adaptation) but the global message strategy is the same (message aggregation/standardization. “The McDonald's philosophy of QSC&V is the guiding force behind its service to the customers. McDonald’s menu is priced at a value that the largest segment of the Indian consumers can afford. McDonald’s does not sacrifice quality for value – rather McDonald’s leverages economies to minimize costs while maximizing value to customers (McDonald's, 2019)”. The primary motivation behind this type of strategy is the enormous power behind its global brand. As consumption patterns become more homogeneous leveraging the global brand potential with one message worldwide becomes a critical factor to global success.


The Competitive Strategy adopted by McDonald’s to enter the Indian market has followed the AAA framework. To carry on the expansion strategy the Company has adopted the franchise model to encourage local adaptation and share costs with local firms that provide local knowledge. Its products have adapted to the beliefs and specific culture of the India. McDonald's worldwide is now well known for the high degree of respect to the local culture. McDonald’s has pursued at the same time aggregation/integration strategy through the leverage of its intangible assets (its global Branding image). Regardless of location its Marketing and promotional efforts always focus on its core values of high quality of raw material, efficient and well managed supply chain, fast customer service, cleanliness & Value for money(QSC&V). This capability of replication of its message allows the company to reduce costs and achieve efficiencies and economies of scale.

Finally transferring the(perceived) American way of life to India is a form of cultural arbitrage. Being set in the fast food industry, the company enjoys success through its fast-food products and cafes—largely linked with the culture of United States (Cultural arbitrage).

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Cultural arbitrage. (n.d.). The forgotten strategy. Retrieved from Harward Business Review: https://hbr.org/2003/11/the-forgotten-strategy



McDonald's. (2019). McDonald's in India. Retrieved from https://www.mcdonaldsindia.com/McDonaldsinIndia.pdf


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