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Literature review is the type of process which makes available theoretical contribution to deal with a specific topic of the research. It is generally done with, searching of the various secondary sources. This is not a class of any unique experimental work; however it is done with the assistance of previously obtainable sources. It is prepared in a well structured manner through the insertion of personal insights in the several literary sources. The subsequent review is primarily conducted on the subject of business and cultural issues, faced by McDonalds while entering into the Indian market. Globalization is tremendously important in todays competitive market. It is done by the company in order to explore its services. The organization has to enter into different geographical areas if it wants to become a market leader. With the help of globalization, the business earns growth or success, as well as it successfully earns large market shares. Such companies also accounts for over 33 per cent of world output, and 66 per cent of world trade (Gray, 2000). The literature review is focusing on the barriers which McDonalds faced at the time of launching its operations in India as well as it will reveal us how the company has successfully adopted the Indian culture. All the data and facts discovered in the literature review are with the acquaintance of articles, textbooks and scholarly journal. Various articles and journals are prepared by authors who provide guidance to overcome with the business issues. According to the Youngblood coaching, there are seven steps through which business issue can positively handle i.e. firstly decide what the major challenge for the business. . After this, select the hero and imagine stepping into his shoes. In the next step, study about the story of that hero. Fourth step is to analyze how he has outcome with the challenges. Then build ways to handle the challenges, this may include what type of measures can be adopted in order to overcome with the situation. Last step is for action, start working on the things that was decided and planned earlier (7 Steps to Overcome Obstacle and Turn Them into Opportunities, n.d). Julie King has also suggested some problems which usually come in the way of business growth. These problems can be lack of capital, less management skills, lack of information, poor planning, poor actions, ignorance of risk and low focus (King, 2007). McDonalds is the world largest chain of quick service and fast food restaurants. The company has its branches in almost 119 countries, which serve around 68 million customers all over the world. In 1940, McDonalds started its operations and has it is headquartered in United
States. The company mainly operates its activities and functions by franchisee, associate or by the corporation itself. They earn revenue mostly from the royalties, rent, franchisee fees and sales. At present, there are 1200 restaurants of McDonalds in U.K and it employing 67000 people in this country (McDonalds Restaurants Limited UK - Total Talent Commitment, n.d). Currently it is one of the most successful consumer product companies around the globe with annual profits of more than $23 million. The firm always focuses on quality services and their ultimate mission is to become the worlds best quick service restaurants with the utmost quality, cleanliness and value to customers. This has also helped them to achieve competitive advantage and edge over the other firms in the market. McDonalds is the leader in both the domestic, local and international markets. For the company, product life cycle also plays a very important role. Since the needs and taste of the consumer changes with the change in time, the product also needs to be altered in order to cater to the requirement of the users. So there is a great significance of product Life Cycle in McDonalds. The company also adopts the strategies of innovation and delivering optimal excellence, to all its potential customers in each and every restaurant. MCD also faced many challenges while entering in the Indian market (Tariq, 2010). The above articles are showing several issues of business. In addition to this, one more challenge which creates great hurdle in the way of business expansion into diverse nation is cultural issues. It is the issue in which company little except the host countrys culture while following the original one also. This becomes very essential for the firm to adopt necessary changes in its existing culture. Every market likes and dislikes are totally base on its typical culture. Thus, if a company enters into the other country, it has to study values or customs pursued by the particular society. In the case of McDonalds, the organization faced many problems at its beginning period. At that time, community of India was rejected to accept the food offered by the firm, and because of this, organization was stop running its restaurants. After this it again came with new taste as well as a little bit of changes in its menu. So, acceptance of the culture and modifications accordingly is an important step, which must be taken by the firm in the business development process (Brown, 2011). There are three major ways through which the organization can make more markets i.e.: Mergers: It happens when one company combined with the other productive firm and together runs business (Cox, 2007).
Acquisition: It occurs at the time when the dominant firm of developed country purchases the business of a developing nation. Franchise: Through this, some giant firms explores their business by opening chains in several geographical areas (Franchise, n.d). In this project, the overall discussion is on about McDonalds growth in relation to Indian market. Further, this research is focusing on various business issues faced by the company, at the time it established over here. It was set up as a joint venture between McDonalds and Hardcastle Restaurants Private Limited for the Western India. Similarly, for the Northern India with Connaught Plaza Restaurants Private Limited. The first franchise was opened by the organization in Mumbai in the year 1996. Recently the company is having 160 restaurants in all over India. In all of these restaurants, it hires local employees. This is done for easy understanding the language of the people. It runs business majorly with the help of franchise. Only 15% of its restaurants are directly owned by the company. The remaining 85% is managed by franchise (McDonald's set the standard for Indian market entry, 2009). The fast food industry is growing rapidly in Indian markets. This is because most of the businessmen are likes to eat out for their leisure. Further, Indian population has huge adults; they are crazy for burgers and pizzas. Hence, they like to go McDonalds to have a party as well as outing at low prices. Thus, MCD is one of the several restaurants being operated in the nation, which is exploring its business successfully. The company is able to achieve success in this market as it contributes its growth portion to the community through reinvestment and municipal taxes (McDonalds Business Strategies in India, n.d).
new vegetarian items with its standard menu i.e. McAlooTikki and McVeggie burger (McDonalds Business Strategies in India, n.d). In the earlier days, it has targeted to the Urban Upper class people and charged high prices. But, now days, it offers products at affordable rates as well as targeting in different ways.
traditions of India and therefore, first time in their worldwide system developed an egg-less mayonnaise. Place The product should be available at a place which is convenient for the customers and easily accessible. It also includes the distribution channels. They are important so that the product can be made available to each and every consumer at a right place and right time. In U.S.A, around 50 % of the McDonalds outlet is within 3 minutes drive. The company offers a good and hygiene environment to its customers. Quality services are being provided and thus, happiness and fun is felt by everyone who dines at McDonalds. Many facilities are also given like internet, music by radio and play space for children. Price - The pricing of a product plays a very imperative role in shaping the growth and survival of the company (Oxenfeldt, 1982). Fixing a pricing for the product is not an easy job; many factors need to be considered while devising the best pricing strategies for the product. In todays scenario, each and every company is facing competitive and challenging conditions and the main purpose for the company is to continue to exist in the market and to have a competitive edge over other rivalry firms. McDonalds offer certain value pricing strategies like happy meal, family and combo meal etc. This strategy has helped the company to increase their volume of sales. As the firm enjoys the image of comfort and familiarity, it was often perceived as a costly brand. In order to expand and capture the market share in India they need to change this perception and provide affordable prices to the customers. So, keeping this in mind they introduced Happy price menu of Rs. 20. And this strategy bought many customers to them. Promotion Promotion is defined as the process which is used to advertise the product or services in the market (Promotion. n.d). In order to sustain in the market, the company need to spend more on the advertisement. There are several promotional tools available to the firm and by using them they can promote their product. Many promotional channels have been adopted by the McDonalds, so as to communicate the information of the product (Tools for promotion, n.d). These tools are personal selling, advertising, sales promotion, direct marketing and public relations.
McDonalds main purpose of advertisement is backed up with the three main objectives and these are to make the people aware about the product being offered, to have a positive response towards its offerings and reinforce in the minds of all the potential consumers. They started their promotion by television, bus shelters and hoardings. Some of the marketing campaigns of the company are you deserve a break today, so get up and get away- to McDonalds, Im loving it and many more. People The Company understands the value of its people and employees. If the employees are satisfied then they will better serve their customers, which in turn help the firm to retain its potential users of their product. McDonalds does internal marketing on a regular basis. Internal marketing may include training, hiring and motivating the potential employees.
that particular country. McDonalds has also survived in the Indian market because it has changed its offerings. The company was known for its ham burgers, beef and pork burgers, but in order to response to the sensitivity of the Indian customers they reengineered their menu. 4. Distribution McDonalds has faced many challenges while entering in the Indian market. They faced many distribution issues like social and geographical diversity, infrastructure is very poor, poor conditions of roads, power situations. The major among them is to maintain the standard of cold, clean and on-time delivery in India. 5. Cultural challenges The eating habits of Indian population has let the McDonald to make changes in its various policies. Majority of the population in India is vegetarian. Most of the Indians go for outing on special occasions and they prefer home cooked food. All these factors imposed a great challenge to the company in order to find a place in the Indian market. At the same time the Indian consumers are very price sensitive. 6. Legal issues All these issues is related with the legal environment of the company in which it is working. There are many laws and acts that have been passed by the various authorities and government which restrict the operation and working of McDonalds in India (Environmental factors affecting McDonalds management function. n.d). Act against the cruelty of animals, union and labor laws and promotion of corpulence by focusing on the kids. 7. Competition The major competition being faced by the company is from KFC. Although, McDonalds has a wide range of products starting from Rs.20, which is not matched by the offerings of the KFC. The other competitors are Nerulas, Pizza hut and Dominos pizza. But the company was able to achieve competitive edge by offering quality and innovation in their product and services.
They have global support with local management In India, McDonalds is a joint venture company which is managed by the Indians. They run their business and activities with complete flexibility. It is the Indian team who bought the local knowledge to the firm. McDonalds Corporation has also helped the Indian management by providing them training sessions before initiating operation. They were given training related to cleanliness, quality and standardization of services. Investment in the development of food supply chain The Company has made huge investment on the development of infrastructure and supplier. In order to avoid wastage, the firm has established the cold chain. This has helped in maintaining the freshness and quality of food for a long period of time and operational wastage can also be minimized. It includes warehousing, transportation and transacting consumable food products. Customization of the product McDonalds has developed menu especially according to the needs of the Indian customers. They have included vegetarian selections which suits the taste and culture of the Indian customers. The company has re-engineered its menu and it does not contain beef and pork items. As Majority of the population in India is vegetarian, so the company has separated the vegetarian and non-vegetarian sections. Localization McDonalds has adopted localization of equipments and because of that they were able to reduce the fixed costs. They have also set their own manufacturing plant in India. The production was also being carried out according to the expectation and suitability of the Indian customers.
The companies local partner understand the customs, values, culture and norms of India as well as the taste and need of the Indian customers. This helped the company to serve better and to secure good brand image in the Indian market (McDonalds Ongoing Marketing Challenge: Social Perception in India. n.d). McDonalds uses the local architecture to construct its restaurant. It also analyzed the behavior of the customers and their offerings were based on the specification of the customers. The company has changed its various policies according to the eating habits of the Indian population. Majority of the population in India is vegetarian and Hindu. So, they also need to alter the menu. They started offering vegetarian line to the customers such as McVeggie, McAlooTikki and many more. Beef, pork and hamburgers were removed from the menu because it was considered sacred in Hindu religion. Vegetarian and non-vegetarian sections were separated so as to ensure purity and cleanliness. With respect to the Indian culture, they have also not included eggs in mayonnaise. So, in order to capture the Indian market, McDonalds has made many changes. All the aspects discussed above imposed a great challenge to the company in order to find a place in the Indian market. At the same time the Indian consumers are very price sensitive.
Indian customers and excluded many items from the menu such as beef, pork, hamburger and mutton etc. During its early stages, McDonalds also faced severe competition from the Dominos, KFC, Pizza hut and Nirulas, but still it was able to achieve competitive edge by offering quality and innovation in their product and services (Schumpeter, 2011). The final part of this literature review analyzes the cultural adaptation by the McDonalds. How the firm has changed its various policies and strategies to satisfy the needs as well as how they matched according to the specifications of the Indian customers is also being included this analysis.
Research Methodology
The search for knowledge can be called as research. It can also be defined as a systematic and scientific search for collecting information on the specific topic. It is also an art of scientifically exploration. According to Advanced Learners Dictionary, research is a kind of careful inquiry or investigation by searching new facts in any type of knowledge. Redman and Mory classify it as a systematic effort to get fresh knowledge. Research in the words of Clifford Woody is the process of defining as well as redefining problems; assembling, arranging and evaluating data; originating hypothesis or suggested resolutions; making inferences along with realizing conclusions and finally proper testing of the conclusion to determine whether it is fit to the formulating hypothesis (Research Methodology: An Introduction, n.d). M. Stephenson and D. Slesinger has define research in Social Science Encyclopedia, that it is the treatment of things, symbols as well as concepts for the reason of simplifying to correct, except or verify the knowledge, whether that particular knowledge aids into the creation of theory or in the performing of an art (Seligson, 2002). This research is undertaken to get knowledge about problems faced by McDonalds. The researcher has conducted this study systematically by following the proper structure. Various types of appropriate methods have been applied by the researcher to gather the productive informations.
Research Philosophy
All types of research are based on several assumptions about how the humanity is professed as well as how we can better arrive to recognize it. No one exactly knows the best way of understanding the world and the philosophers have given their perceptions, which can be taken as base for the research (Trochim, 2008). Research philosophy is basically of two types: positivist and interpretivist. In this Positivist move towards the social sciences and believes that things can be considered as hard
facts, equally relationship among these facts can be recognized as scientific laws. For positivist, these laws have the position of social as well as truth objects, which can be studied as same, as natural things (Research philosophy: towards an understanding, n.d). Through positivist philosophy actual or real datas can be collected. It includes those method which gathers true as well as valid information. Quantitative method can be applied for this like surveys on appropriate population could provide the best insights. In this research, the survey has been conducted on the regular customers of the company through questionnaire, to get informations regarding their likes or dislikes for the firm along with the changes they had seen in the services. The other one is interpretivist, it assumes that only through social structure such as consciousness, language along with the shared meanings, reality can access. This research does not initially define the dependent or independent variables, but centers on the full complication of human sense making as the condition appears (Philosophical Assumptions, n.d). According to this philosophy, human perceptions changes over time to time. Due to this reason, interview of departmental heads has been conducted in this research to ascertain the consumer attitude or behavior towards the company. It has been observed by many researchers that, no single method is best for whole research. The best way to improve the quality of research is using combinations of methods. At the same time, some authors also argued that productivity in work can develop by using and focusing on single method. Hence, research methods should be chosen by the researcher as per the needs or requirements. In this research both positivist as well as interpritivist methods has been used to collect datas. Moreover, according to the researcher opinion both methods will definitely provide best qualitative informations. Informations from the previous literatures as well as managers will be gathering and used to fulfill the principle of study. Along with this, it will also describe the existing conditions and required changes within the company.
Type of Research
Methods of research are the several schemes, procedures, algorithms, etc., which are used in the process of research. All types of methods used by researcher while undertaking research is said to be research methods. These methods are scientific, essentially planned and value neutral. They could be experimental studies, numerical schemes, theoretical procedures as well as
statistical approaches. The methods help in collecting datas, samples together with finding solutions of a problem. There are three broad categories of research approaches i.e. descriptive, exploratory and casual. Investigation realm of the researcher includes business issues of McDonalds as well as cultural adaptation in the context of India. For this kind of research, the exploratory research would be the best category. An exploratory research is quite informal, relying on secondary sources such as reviewing presented literatures as well as it is qualitative also which includes informal discussion with the customers, management or employees and more formal approaches by way of case studies, in-depth interviews (Exploratory Research, n.d). This approach would help the researcher in analyzing to what extent MCD is able to adopt Indian culture and handling its business issues in best possible manner.
This method is cost or time effective; also it can provide both qualitative and quantitative informations (Secondary Data Collection, n.d).
Data Analysis
Data analysis is the process of cleaning, transforming, inspecting as well as modeling data with the aim of highlighting the most important information, suggesting finale results together with helping in decision making. Analysis of data has various approaches or facets, encircling diverse techniques within varied names, in dissimilar science, business and social science areas (Niles, 1995). In this particular research thematic data analysis is used for informations, which is being collected by interview method and questionnaire as, qualitative research generally uses themes for analysis rather than in physical linguistic components, such as sentences, paragraphs or words. Further, coding scheme has been developed to giving code to the text, for the reason to simplify specific outcomes. In order to establish high accuracy, rather than using this scheme on the complete text, it initially utilizes on sample of the text. After this coding, the conclusion from data is drawn.
Sampling
Sampling is the procedure of selecting people or organization from interested population. After studying the sample one can reasonably generalize the results of the population, which they have chosen (Sampling, 2008). Generally, the population is very huge for the researcher, so it is not possible to make survey of all its members. A small sample chosen with best care can represent the whole population in an appropriate manner. The sample reproduces the characteristics of the unit or population within which it is selected. There are two types of sampling such as, probability or nonprobability. Every member has a recognized non-zero possibility of being selected form the population, in the probability sampling. It includes systematic sampling, random sampling along with stratified sampling. In case of nonprobability sampling, constituents are being selected from unit on the basis of nonrandom manner. Several methods of this sampling are judgment sampling, quota sampling, convenience sampling together with snowball sampling (Survey Sampling Methods, n.d). In this dissertation, simple random sampling is used by the researcher. For this, investigator selects a group of sample from huge population. Each entity got equal chance of being integrated in the sample. On the basis of random sampling, first 10 customers for three
days will be selected for filling the questionnaire. By using this process, participants can be assured that research is conducted in an ethical manner. Further, there is no possibility of biasness to be presented in this method, as the researcher only select those who will come first in the restaurant. For gathering informations, the well set questionnaire will be simply given to fill up by the respondents (Sampling, n.d).
Research Limitations
o Although in research, the researcher uses techniques of sciences, but it is not an exact science. Thus, results or findings are not accurate. o Survey is done on human beings such as consumers, employees, etc. and humans have propensity to act unnaturally when they know that they are observing by someone. o Some amount of biasness may be presented in the research. Many times it happens that same class of respondents provide dissimilar results. o An untrained researcher can make wrong questions for data collection. o Time constraint is also faces by the researcher. Pre defined time line reduces the quality of research.
o Data collection as well as its processing is very costlier, this creates limitations in the effective research. o Research is carrying out in open market where several variables act on its settings (Limitations of Marketing Research, 2008). o Datas are also collected from different secondary sources, in which biasness of authors may present. o Small size sample. o In research various thoughts or views of different authors are present which might be clashing at times. o Methods used to collect data may not be proper in relation to particular research report. o Lack of availability of reliable as well as accurate data (Limitations of the Study, 2012). o Findings of the research are confined to specific territory.
trust or believes on the investigator while giving them datas or facts. In the case of misuse or mistreatment of any information provided by individual as well as the organization, legal actions can be taken against the researcher.
5. Re-examination of text This involves taking all themes separately for re-examining of their original data. 6. Construction of final form The definition, name as well as supporting data are reexamined at this stage for final production of each theme. 7. Reporting of each theme This relates to finalizing name of all themes, writing its whole description and illustrates it through some quotations, which help in communicating its meaning to the reader (The process of thematic analysis, 2010). Theme 1
The restaurant has developed competitiveadvantages in the industry of serving quality fast food at a low cost. In addition to thesedecisions, the development of the Golden Arches or Ronald McDonald has providedconsumers with memorable icons that are associated with quality, service, and value, just likethe McDonald brothers and Ray Kroc intended
McDonalds has been successful in operating within the food service industry through efficient strategies and quality standards which enables them to gain competitive advantage.
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1. How many times you like to visit at McDonalds? o 0 o 15 o 5 10 o More than 10 2. From where did you come to know about the McDonalds? o By someones suggestions o Online o Through advertisement o Others 3. How did you like the food of McDonalds? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. How did you like the menu provided by the McDonalds in India?
___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. Are you satisfied by the Quality of Services being provided at McDonalds? Support reasons to your answer. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 6. How would you rate the services at McDonalds? o Bad o Average o Good o Excellent 7. Why do you like to visit this place again? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. Which is the least liked Menu at McDonalds? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. McDonalds has adopted the Culture and Taste of the Indian customers, so whats your opinion on that? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. Hows the management of McDonalds in handling the challenges while offering the services? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________
11. Did you find value for money? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. According to your opinion, which areas need to be improved at McDonalds? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________