Advantages & Disadvantages of a Multinational Firm

The ultimate goal of every for-profit business is to sell more products and services to bring in more revenue and generate more income for the owners. Small businesses often start by opening operations in a certain town, state or country, but as a business grows, managers might decide to start doing business in other countries. Businesses that conduct operations and sell to customers in multiple countries are considered multinational firms.

Access to Consumers
One of the primary advantages that multinational companies enjoy over companies that limit their operations to smaller geographical regions is that they have a larger pool of potential customers. For instance, a restaurant chain that has a strong presence in U.S. cities might not be able to expand effectively within the U.S., but opening new locations in other countries allows it to tap into new, unsaturated markets. According to the U.S. Small Business Administration, about 96 percent of consumers and two-thirds of the world's purchasing power resides outside the U.S. Sources of revenue from other countries help businesses survive periods of low domestic sales.

Laws
A potential disadvantage that multinational companies face is that they are subject to more laws and regulations than other companies. Certain countries do not allow a company to run its business the way it operates in other countries, and each country has different labor and business laws. Multinational companies can also face intellectual property issues that do not impact purely domestic firms. For example, a company in the U.S. that uses a certain brand symbol might not be permitted to use the symbol in a different country if a business in that country uses a similar one.

Access to Labor
Access to labor is another advantage that multinational companies enjoy over other companies. A firm that has operations in many countries can set up its production operations in China or India to take advantage of cheap labor and then sell products in more affluent countries in North America and Europe. Companies that have operations only in the U.S. have difficulty competing with multinational companies if they have to pay workers more to produce similar products.

Taxes and Other Costs

While multinational companies can take advantage of cheap labor, they might also be subject to higher taxes and have to pay more for other things such as transporting goods. Many countries impose taxes called duties or tariffs on imports and exports, making it more costly to sell goods to consumers in other countries.

Multinational corporation

A multinational corporation (MNC) or enterprise (MNE),[1] is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation. The International Labour Organization (ILO) has defined[citation needed] an MNC as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries.

The Dutch East India Company was the first multinational corporation in the world and the first company to issue stock.[2] It was also arguably the world's first megacorporation, possessing quasi-governmental powers, including the ability to wage war, negotiate treaties, coin money, and establish colonies.[3] Some multinational corporations are very big, with budgets that exceed some nations' GDPs. Multinational corporations can have a powerful influence in local economies, and even the world economy, and play an important role in international relations and globalization. Multinational corporations because of their enormous size, enjoy massive economic and political power which enables them to dictate terms to the under-developed countries. They are able to manipulate prices and profits and restrict the entry of potential competitors through their dominant influences over new technology, special skills, ability to spend enormous fund on advertising etc. MNCs organize this operation in different countries through any of the following five alternatives: 1. Branches 2. Subsidiaries 3. joint venture company 4. Franchise holders 5. turn-key projects 1) Branches: The simplest form of extending business operations is to set up branches in the developing countries. Such branches bring with them the technology of the parent company and are linked up with it. 2) Subsidiaries: Multination also operates by setting up national affiliates as subsidiary companies. A subsidiary in a particular country is established under the laws of the country. Such subsidiary companies take advantage of the financial, managerial and technical skills of the holding company and also benefit by the international reputation that latter enjoys. 3) Joint Venture Company: a joint venture is the establishment of a firm that is jointly owned by two or more otherwise independent firms. Most joint ventures are 50:50 partnerships. At times, multinationals enter into a joint venture with an indigenous firm or agency. Under this arrangement of MNC makes available machinery, capital goods and technological expertise to the indigenous firm. This form of organization is adopted in those countries where the law requires control by nationals. Joint ventures are attractive because: They allow the firm to benefit from a local partners knowledge of the host countrys competitive conditions, culture, language, political systems, and business systems. The costs and risks of opening a foreign market are shared with the partner. When political considerations make joint ventures the only feasible entry mode. The firm risks giving control ofJoint ventures are unattractive because: The firm may not have the tight control overits technology to its partner. Sharedsubsidiaries need to realize experience curve or location economies. ownership can lead to conflicts and battles for control if goals and objectives differ or change over time.

4) Franchise Holders: This is a special kind of arrangement by which an affiliate firm produces or markets the product of a multinational firm after obtaining a license from that firm. A formal contract is entered into between the affiliate firm and the multinational firm which specifically mentions the rights that are transferred to the affiliate firm and lays down the compensation (usually in the form of royalties) that it has to pay to the parent firm. Firms avoid many costs and risks ofFranchising is attractive because: Firms can quickly build a global presenceopening up a foreign market.
Multinational Companies A multinational company has branches in may countries. Ford and Sony are examples.

Multinational companies do bring some benefits to developing countries. They provide jobs and increase the wealth of the local people. The country gains some wealth by way of taxes. However, there are some problems as well. The jobs are often low-skilled and poorly paid. Much of the profit will go out of the country, and the company may pull out to relocate in a country where it can make a greater profit. Multinational companies are primarily interested in making profits for their shareholders. Paying wages is an expense that the company will try to reduce to as low a level as possible.
MNCs are such companies or institutions that meet out the services and the productions to many countries and there institutions. They serve the customers and the institution best and simultaneously the magnetic chemistry between the country and the foreign MNCs has shown some fruitful results too. Off late the scope of international's performance in India has widened and these influxes in the flourishing on the varied scope are due to the talent and the cost factor that brings the MNCs here. These are not the sole prior causes of the Nokia, Vodafone, Fiat, Ford Motors and as the list moves on- to flourish in India. As the basic economic data suggest that after the liberalization in 1991, it has brought in hosts of foreign companies in India and the share of U.S shows the highest. They account about 37% of the turnover from top 20 companies that function in India. Keeping the 'Big Boss' apart there are certain other companies hailing from Britain, France, Netherlands, Italy, Germany, Belgium and Finland that have made a strong footing in India too. They are well flourishing and earning there share of maximum profit too.

Why are Multinational Companies in India?

There are a number of reasons why the multinational companies are coming down to India. India has got a huge market. It has also got one of the fastest growing economies in the world. Besides, the policy of the government towards FDI has also played a major role in attracting the multinational companies in India. For quite a long time, India had a restrictive policy in terms of foreign direct investment. As a result, there was lesser number of companies that showed interest in investing in Indian market. However, the scenario changed during the financial liberalization of the country, especially after 1991. Government, nowadays, makes continuous efforts to attract foreign investments by relaxing many of its policies. As a result, a number of multinational companies have shown interest in Indian market.

Profit of MNCs in India

It is too specify that the companies come and settle in India to earn profit. A company enlarges its jurisdiction of work beyond its native place when they get a wide scope to earn a profit and such is the case of the MNCs that have flourished here. More over India has wide market for different and new goods and services due to the ever increasing population and the varying consumer taste. The government FDI policies have some how benefited them and drawn their attention too. The restrictive policies that stopped the company's inflow are however withdrawn and the country has shown much interest to bring in foreign investment here. Besides the foreign directive policies the labour competitive market, market competition and the macro-economic stability are some of the key factors that magnetize the foreign MNCs here.

Following are the reasons why multinational companies consider India as a preferred destination for business:

Huge market potential of the country FDI attractiveness Labor competitiveness Macro-economic stability

Advantages of the growing MNCs to India

There are certain advantages that the underdeveloped countries like and the developing countries like India derive from the foreign MNCs that establishes. They are as under:

Initiating a higher level of investment. Reducing the technological gap The natural resources are utilized in true sense. The foreign exchange gap is reduced Boosts up the basic economic structure.

Multinational corporations have existed since the beginning of overseas trade. They have remained a part of the business scene throughout history, entering their modern form in the 17th and 18th centuries with the creation of large, European-based monopolistic concerns such as the British East India Company during the age of colonization. Multinational concerns were viewed at that time as agents of civilization and played a pivotal role in the commercial and industrial development of Asia, South America, and Africa. By the end of the 19th century, advances in communications had more closely linked world markets, and multinational corporations retained their favorable image as instruments of

improved global relations through commercial ties. The existence of close international trading relations did not prevent the outbreak of two world wars in the first half of the twentieth century, but an even more closely bound world economy emerged in the aftermath of the period of conflict.

In more recent times, multinational corporations have grown in power and visibility, but have come to be viewed more ambivalently by both governments and consumers worldwide. Indeed, multinationals today are viewed with increased suspicion given their perceived lack of concern for the economic wellbeing of particular geographic regions and the public impression that multinationals are gaining power in relation to national government agencies, international trade federations and organizations, and local, national, and international labor organizations.

Despite such concerns, multinational corporations appear poised to expand their power and influence as barriers to international trade continue to be removed. Furthermore, the actual nature and methods of multinationals are in large measure misunderstood by the public, and their long-term influence is likely to be less sinister than imagined. Multinational corporations share many common traits, including the methods they use to penetrate new markets, the manner in which their overseas subsidiaries are tied to their headquarters operations, and their interaction with national governmental agencies and national and international labor organizations.

WHAT IS A MULTINATIONAL CORPORATION?

As the name implies, a multinational corporation is a business concern with operations in more than one country. These operations outside the company's home country may be linked to the parent by merger, operated as subsidiaries, or have considerable autonomy. Multinational corporations are sometimes perceived as large, utilitarian enterprises with little or no regard for the social and economic well-being of the countries in which they operate, but the reality of their situation is more complicated.

There are over 40,000 multinational corporations currently operating in the global economy, in addition to approximately 250,000 overseas affiliates running

cross-continental businesses. In 1995, the top 200 multinational corporations had combined sales of $7.1 trillion, which is equivalent to 28.3 percent of the world's gross domestic product. The top multinational corporations are headquartered in the United States, Western Europe, and Japan; they have the capacity to shape global trade, production, and financial transactions. Multinational corporations are viewed by many as favoring their home operations when making difficult economic decisions, but this tendency is declining as companies are forced to respond to increasing global competition.

The World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank are the three institutions that underwrite the basic rules and regulations of economic, monetary, and trade relations between countries. Many developing nations have loosened trade rules under pressure from the IMF and the World Bank. The domestic financial markets in these countries have not been developed and do not have appropriate laws in place to enable domestic financial institutions to stand up to foreign competition. The administrative setup, judicial systems, and law-enforcing agencies generally cannot guarantee the social discipline and political stability that are necessary in order to support a growthfriendly atmosphere. As a result, most multinational corporations are investing in certain geographic locations only. In the 1990s, most foreign investment was in high-income countries and a few geographic locations in the South like East Asia and Latin America. According to the World Bank's 2002 World Development Indicators, there are 63 countries considered to be low-income countries. The share of these low-income countries in which foreign countries are making direct investments is very small; it rose from 0.5 percent 1990 to only 1.6 percent in 2000.

Although foreign direct investment in developing countries rose considerably in the 1990s, not all developing countries benefited from these investments. Most of the foreign direct investment went to a very small number of lower and upper middle income developing countries in East Asia and Latin America. In these countries, the rate of economic growth is increasing and the number of people living at poverty level is falling. However, there are still nearly 140 developing countries that are showing very slow growth rates while the 24 richest, developed

countries (plus another 10 to 12 newly industrialized countries) are benefiting from most of the economic growth and prosperity. Therefore, many people in the developing countries are still living in poverty.

Similarly, multinational corporations are viewed as being exploitative of both their workers and the local environment, given their relative lack of association with any given locality. This criticism of multinationals is valid to a point, but it must be remembered that no corporation can successfully operate without regard to local social, labor, and environmental standards, and that multinationals in large measure do conform to local standards in these regards.

Multinational corporations are also seen as acquiring too much political and economic power in the modern business environment. Indeed, corporations are able to influence public policy to some degree by threatening to move jobs overseas, but companies are often prevented from employing this tactic given the need for highly trained workers to produce many products. Such workers can seldom be found in low-wage countries. Furthermore, once they enter a market, multinationals are bound by the same constraints as domestically owned concerns, and find it difficult to abandon the infrastructure they produced to enter the market in the first place.

The modern multinational corporation is not necessarily headquartered in a wealthy nation. Many countries that were recently classified as part of the developing world, including Brazil, Taiwan, Kuwait, and Venezuela, are now home to large multinational concerns. The days of corporate colonization seem to be nearing an end.

ENTRY OF MULTINATIONAL CORPORATIONS INTO NEW MARKETS

Multinational corporations follow three general procedures when seeking to access new markets: merger with or direct acquisition of existing concerns; sequential market entry; and joint ventures.

Merger or direct acquisition of existing companies in a new market is the most straightforward method of new market penetration employed by multinational corporations. Such an entry, known as foreign direct investment, allows multinationals, especially the larger ones, to take full advantage of their size and

the economies of scale that this provides. The rash of mergers within the global automotive industries during the late 1990s are illustrative of this method of gaining access to new markets and, significantly, were made in response to increased global competition.

Multinational corporations also make use of a procedure known as sequential market entry when seeking to penetrate a new market. Sequential market entry often also includes foreign direct investment, and involves the establishment or acquisition of concerns operating in niche markets related to the parent company's product lines in the new country of operation. Japan's Sony Corporation made use of sequential market entry in the United States, beginning with the establishment of a small television assembly plant in San Diego, California, in 1972. For the next two years, Sony's U.S. operations remained confined to the manufacture of televisions, the parent company's leading product line. Sony branched out in 1974 with the creation of a magnetic tape plant in Dothan, Alabama, and expanded further by opening an audio equipment plant in Delano, Pennsylvania, in 1977.

After a period of consolidation brought on by an unfavorable exchange rate between the yen and dollar, Sony continued to expand and diversify its U.S. operations, adding facilities for the production of computer displays and data storage systems during the 1980s. In the 1990s, Sony further diversified it U.S. facilities and now also produces semiconductors and personal telecommunications products in the United States. Sony's example is a classic case of a multinational using its core product line to defeat indigenous competition and lay the foundation for the sequential expansion of corporate activities into related areas.

Finally, multinational corporations often access new markets by creating joint ventures with firms already operating in these markets. This has particularly been the case in countries formerly or presently under communist rule, including those of the former Soviet Union, eastern Europe, and the People's Republic of China. In such joint ventures, the venture partner in the market to be entered retains considerable or even complete autonomy, while realizing the advantages of technology transfer and management and production expertise from the

parent concern. The establishment of joint ventures has often proved awkward in the long run for multinational corporations, which are likely to find their venture partners are formidable competitors when a more direct penetration of the new market is attempted.

Multinational corporations are thus able to penetrate new markets in a variety of ways, which allow existing concerns in the market to be accessed a varying degree of autonomy and control over operations.

CONCERNS ABOUT MULTINATIONAL CORPORATIONS

While no one doubts the economic success and pervasiveness of multinational corporations, their motives and actions have been called into question by social welfare, environmental protection, and labor organizations and government agencies worldwide.

National and international labor unions have expressed concern that multinational corporations in economically developed countries can avoid labor negotiations by simply moving their jobs to developing countries where labor costs are markedly less. Labor organizations in developing countries face the converse of the same problem, as they are usually obliged to negotiate with the national subsidiary of the multinational corporation in their country, which is usually willing to negotiate contract terms only on the basis of domestic wage standards, which may be well below those in the parent company's country.

Offshore outsourcing, or offshoring, is a term used to describe the practice of using cheap foreign labor to manufacture goods or provide services only to sell them back into the domestic marketplace. Today, many Americans are concerned about the issue of whether American multinational companies will continue to export jobs to cheap overseas labor markets. In the fall of 2003, the University of California-Berkeley showed that as many as 14 million American jobs were potentially at risk over the next decade. In 2004, the United States faced a halftrillion-dollar trade deficit, with a surplus in services. Opponents of offshoring claim that it takes jobs away from Americans, while also increasing the imbalance of trade.

When foreign companies set up operations in America, they usually sell the products manufactured in the U.S. to American consumers. However, when U.S. companies outsource jobs to cheap overseas labor markets, they usually sell the goods they produce to Americans, rather than to the consumers in the country in which they are made. In 2004, the states of Illinois and Tennessee passed legislation aimed at limiting offshoring; in 2005, another 16 states considered bills that would limit state aid and tax breaks to firms that outsource abroad.

Insourcing, on the other hand, is a term used to describe the practice of foreign companies employing U.S. workers. Foreign automakers are among the largest insourcers. Many non-U.S. auto manufacturers have built plants in the United States, thus ensuring access to American consumers. Auto manufacturers such as Toyota now make approximately one third of its profits from U.S. car sales.

Social welfare organizations are similarly concerned about the actions of multinationals, which are presumably less interested in social matters in countries in which they maintain subsidiary operations. Environmental protection agencies are equally concerned about the activities of multinationals, which often maintain environmentally hazardous operations in countries with minimal environmental protection statutes.

Finally, government agencies fear the growing power of multinationals, which once again can use the threat of removing their operations from a country to secure favorable regulation and legislation.

All of these concerns are valid, and abuses have undoubtedly occurred, but many forces are also at work to keep multinational corporations from wielding unlimited power over even their own operations. Increased consumer awareness of environmental and social issues and the impact of commercial activity on social welfare and environmental quality have greatly influenced the actions of all corporations in recent years, and this trend shows every sign of continuing. Multinational corporations are constrained from moving their operations into areas with excessively low labor costs given the relative lack of skilled laborers available for work in such areas. Furthermore, the sensitivity of the modern consumer to the plight of individuals in countries with repressive governments mitigates the removal of multinational business operations to areas where legal

protection of workers is minimal. Examples of consumer reaction to unpopular action by multinationals are plentiful, and include the outcry against the use of sweatshop labor by Nike and activism against operations by the Shell Oil Company in Nigeria and PepsiCo in Myanmar (formerly Burma) due to the repressive nature of the governments in those countries.

Multinational corporations are also constrained by consumer attitudes in environmental matters. Environmental disasters such as those which occurred in Bhopal, India (the explosion of an unsafe chemical plant operated by Union Carbide, resulting in great loss of life in surrounding areas) and Prince William Sound, Alaska (the rupture of a single-hulled tanker, the Exxon Valdez, causing an environmental catastrophe) led to ceaseless bad publicity for the corporations involved and continue to serve as a reminder of the long-term cost in consumer approval of ignoring environmental, labor, and safety concerns.

Similarly, consumer awareness of global issues lessens the power of multinational corporations in their dealings with government agencies. International conventions of governments are also able to regulate the activities of multinational corporations without fear of economic reprisal, with examples including the 1987 Montreal Protocol limiting global production and use of chlorofluorocarbons and the 1989 Basel Convention regulating the treatment of and trade in chemical wastes.

In fact, despite worries over the impact of multinational corporations in environmentally sensitive and economically developing areas, the corporate social performance of multinationals has been surprisingly favorable to date. The activities of multinational corporations encourage technology transfer from the developed to the developing world, and the wages paid to multinational employees in developing countries are generally above the national average. When the actions of multinationals do cause a loss of jobs in a given country, it is often the case that another multinational will move into the resulting vacuum, with little net loss of jobs in the long run. Subsidiaries of multinationals are also likely to adhere to the corporate standard of environmental protection even if this is more stringent than the regulations in place in their country of operation, and so in most cases create less pollution than similar indigenous industries.

THE FUTURE FOR MULTINATIONAL CORPORATIONS

Current trends in the international marketplace favor the continued development of multinational corporations. Countries worldwide are privatizing governmentrun industries, and the development of regional trading partnerships such as the North American Free Trade Agreement (a 1993 agreement between Canada, Mexico, and United States) and the European Union have the overall effect of removing barriers to international trade. Privatization efforts result in the availability of existing infrastructure for use by multinationals seeking to enter a new market, while removal of international trade barriers is obviously a boon to multinational operations.

Perhaps the greatest potential threat posed by multinational corporations would be their continued success in a still underdeveloped world market. As the productive capacity of multinationals increases, the buying power of people in much of the world remains relatively unchanged, which could lead to the production of a worldwide glut of goods and services. Such a glut, which has occurred periodically throughout the history of industrialized economies, can in turn lead to wage and price deflation, contraction of corporate activities, and a rapid slowdown in all phases of economic life. Such a possibility is purely hypothetical, however, and for the foreseeable future the operations of multinational corporations worldwide are likely to continue to expand

McDonalds Business Strategy in India

Case Study Abstract

This case study discusses how McDonalds India managed to buck the trend in a struggling economy, its early years and business strategy to get more out of its stores in India. The case also briefly discusses how McDonalds adapted to local culture in India, its localization and entry strategy, its strong supply chain and pricing strategy.

Table of Contents

1. Introduction

2. McDonalds entry into India 3. Exhibit I: McDonalds Country Entry Year 4. The Indian Market Top 10 per cent of the busiest markets globally 5. Localization Strategy 6. McDonalds JV in India 7. Initial Challenges Culturally Sensitive Food 8. Understanding Indian Customs and Culture 9. An Indianized Menu, Re-engineered operations and no beef burger 10. Competition Major Competitors in India and Globally 11. McDonalds Quick Facts 12. Time line of McDonalds in India 13. Pricing Strategy The Rs-20 trap and Purchasing Power Pricing 14. Kiosks at store entrances for customers in a hurry 15. Home Delivery McDonalds Delivery Service or McDelivery 16. Out-of-home Breakfast International McDonalds format with local taste 17. McDonalds Supply Chain Management (SCM) 18. Unique cold chain 19. Cutting costs 20. Exhibit II: McDonalds Suppliers in India 21. Exhibit III: The Menu at McDonalds India 22. Exhibit IV: McDonalds Early History and Growth 23. Exhibit V: Principles to McDonalds business success 24. Questions for Discussion
Case Updates/Snippets

Worlds leading food service retailer McDonalds has more than 32,000 restaurants serving over 50 million customers each day in more than 119 countries.

McDonalds competitors in India McDonalds competes with fast food chains like Pizza Hut, Dominos Pizza, Papa Johns, Nirulas and KFC in India.

McDonalds Supply Chain McDonalds has a dedicated supply chain in India and sources 99% of its products from within the country. The company has strong backward integration right up to the farm level.

Quick service restaurants in India By October 2009, McDonalds India had more than 170 quick service restaurants in India. Dominos Pizza, which began operations in India in January 1996, has over 275 stores across 55 cities in the country. KFC has 46 restaurants across 11 cities in India. (KFC is one of the 5 brands owned by Yum!. KFC is a $12 billion global brand and a leading quick-service restaurant (QSR) in many countries.) Nirulas, one of Indias oldest food chains (completed 75 years in service in March 2009), has a network of around 62 outlets in five states across Northern India. Nirulas, established in 1934 has interests in hotels, restaurants, ice cream parlours, pastry shops and food processing plants. Nirulas was the first to introduce burgers in India.

Food Industry in India In India, food industry and particularly informal eating out market is very small. In India, over quarter of a million customers visit McDonalds family restaurants every day. The Indian fast food market is valued at $1-billion (Rs 4,547 crore) aprrox.

MFY (Made for You) food preparation platform MFY is a unique concept (cooking method) where the food is prepared as the customer places its order. All new upcoming McDonalds restaurants are based on MFY. This cooking method has helped McDonalds further strengthen its food safety, hygiene and quality standards. McDonalds has around 10 MFY restaurants in its portfolio.

How McDonalds manages to keep its prices down? Fast-food chains face a tough time balancing between margin pressures and hiking prices which can hurt volumes. Consequently, the chains have to increase rates or rework their strategies. Affordability has been the cornerstone of McDonalds global strategy. Some of its measures to achieve this include Bulk buying, long-term vendor contracts, and manufacturing efficiencies.

McDelivery Online In India, McDonalds first launched home delivery of meals in Mumbai in 2004. McDonalds now has plans to launch web-based delivery service in India (across 75 McDelivery cities) in 2010, a pilot for which has already been tested by it in Hyderabad. The company hopes to add 5 per cent to sales via Web delivery. McDonalds web-based delivery model will be based on serving the customer quickly wherein the drive time does not exceed seven minutes because its food has to be eaten within ten minutes of preparation. The footfalls in India are amongst the highest in the world, but the average bill is amongst the lowest. At present (March 2010), Dominos Pizza (operated by Bhartia Group-promoted Jubilant Foodworks under a master franchise agreement) has a 65% market share in the home delivery segment.

Most Preferred Multi Brand Fast Food outlets: In 2009, McDonalds India won the CNBC Awaaz Consumer Awards for the third time in the category of the Most Preferred Multi Brand Fast Food outlets.

McDonalds India in 2010 In 2010, McDonalds India plans to open 40 more outlets. The company has also earmarked a budget of Rs 50-60 crore to market its new products and initiatives for consumers. Its new marketing campaign is titled Har Chotti Khushi Ka Celebration in other words celebrate little joys of life where it positions McDonalds as a venue for enriching life of consumers. In South India, McDonalds has 29 outlets and plans to add 10 more by end of 2010.

Taco Bell in India In March 2010, Taco Bell, the Mexican specialty chain owned by US-based fast food brands operator Yum! Restaurants launched its first outlet in Bangalore, India. The company which also operates brands like Pizza Hut and KFC plans for contract farming to open up to 100 outlets by 2015 and also expand into Tier-II and -III Indian cities eventually.

Local Vegetarian Menu: In India, McDonalds does not offer pork or beef-based products. Its menu is more than 50 per cent vegetarian. The fast food retail chain has separate production lines and processes for its vegetarian and non-vegetarian offerings.

High Real-Estate costs in India: In many countries, in a Quick Service Restaurant (QSR) a customer comes in, buys and then leaves. This is known as a revolving door concept. But an Indian customer believes in a dine-in culture. This adds to the real estate costs which goes as high as 20-25 per cent as compared to 10-15 per cent globally.

The most important meal for QSRs- Morning Meals (Breakfast):According to market research company, the NPD Group, breakfast accounted for nearly 60 per cent of the restaurant industrys traffic growth over the past five years in the U.S. Quick service restaurants sold 80 per cent of the over 12 billion morning meals served at US restaurants for the year ending in March 2010.

OOH Branding: According to Rameet Arora, senior director marketing, McDonalds India (West and South), McDonalds India may be the largest out-of-home branding (OOH) in the country. McDonalds India has restarted OOH (out-of-home branding) after a 7 to 8 year break to reach to their target group.

Employees and Customers: In India, McDonalds employs 5,000 people and serves half a million customers a day via its 169 family restaurants. McDonalds has 85,000 employees and serves 2.5 million customers a day in the UK.

KFC New Menu Streetwise In February 2011, KFC, the fast food retail chain announced a new menu called Streetwise to offer products at more affordable prices to attract the college crowd. KFC has around 108 stores in India and Streetwise would help it compete better against McDonalds youth brand offering in India (products priced at Rupees 20). KFCs products were typically priced between Rs 65 and Rs 500 but with the new menu between Rs 25 and Rs 100.