Reasons For McDonald’s Failure In India

About McDonald's

Question:

Why or in which circumstances did western well-known business fail in India?

McDonald’s is one of the greatest restaurants famous for serving fast food and hamburger. In around 119 countries around 68 million customers are served on a daily basis. There are a total of 35,000 branches of McDonald’s. It is well known for its excellent food. The headquarters of McDonald’s is situated in The United States. The restaurant was first started as a barbecue restaurant in the year of 1940. The company was opened by Maurice and Richard McDonald.  The mission of the restaurant is to become friendlier to the customers and be one of the favorite places of the customers. Soon they started to sell hamburger which became a super hit item among the customers.  In 1955, Ray Kroc started to own the company as a franchisee.  Soon he purchased McDonald’s restaurant from the original owners and started to popularize the restaurant and made it a world famous one.

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There are many franchisees of McDonald’s spread across the country.  The world’s 2^nd biggest private employer is McDonald’s.  Apart from serving world famous hamburgers, it is famous for its mouthwatering sandwiches, different kinds of breakfast items, chicken wraps, aerated drinks and different types of fries and desserts. In response to the customer’s desire, the menu also includes salads, fish etc. Soon McDonald’s set its foot in India and started to operate and sell its products through different outlets in India.  In 1995, with the help of two partners, McDonald’s started to be operative in India (Vasudevan, 2007).

But McDonald’s could not prosper or live up to its expectations and hold on to its popularity as it had gained in western countries.

Under which circumstances or conditions did the company fail in India?

Undoubtedly, the launch of McDonald’s was a big news in India but due to some circumstances and conditions it failed to prosper. It had high hopes of gaining success, but it failed to live up to it.

First and foremost, the Management did not understand the true meaning of ‘localize or localization’ The Management of the corporation had a western approach which they tried to follow in India. The two countries India and The United States are different from each other in every respect like economic, social, and others.  People of the countries are different and so are their cultures, values, morals, beliefs.  So understanding the needs and wants of the local people was the most important factor to achieve its aims. However McDonald’s failed to understand the mentality and the way of thinking of the common men.  Hindus are forbidden from eating beef but McDonald’s items used beef and the Management believed that the beliefs of the common men will be changed over a span of time. However, the attitudes and beliefs of the people never changed and McDonald’s had to face a lot of criticism which reduced its popularity. So it failed to adapt the culture and tradition of the local people of India.   They introduced the Maharaja Mac to change the tasting habits of the people and it took years to realize the craze for vegetarian food of Indian citizen.

McDonald’s in India

In protest to curb the use of ‘beef’ by Management,  the Bharatiya Janata Party (BJP) protested against it.  Few outlets of McDonald’s situated in the Thane area of Mumbai were shattered by local people.

It wasn’t at all easy for the Management to understand the beliefs of Indian citizens.  To execute the task of slaughtering of cows and using meat created a big issue in the market. Slaughtering of cows is considered to be an unholy act and is never supported by the Hindus.  It was truly difficult for the Management to carry out such tasks in India. According to the Hindu religion, the cows are considered as sacred as mothers.  The Hindus worships cows and slaughtering of thousand of cows by the management of McDonald’s created a rage among them and they started to protest.  

One of such biggest issues faced by the team was during the launch of any new product.  During any launch, McDonald’s could not predict or understand the demand of its food items because they already had a bad reputation in the public.  Indian citizens were also not sure about which ingredients were being used to prepare the food items as they are strictly opposed to eating beef products. Also they were confused about the kind of oil that was being used to make the product.  They had a belief that McDonalds used beef fat to fry the products instead of using vegetable oil. So launching a product and getting a huge response was really a tough thing to achieve considering the attitudes and believes of the Indians. Since they were unsure of the products or the ingredients, they stopped eating or dinning out at this food joint.  The Management started to face constant challenges due to such problems.

Another reason of failing in India, companies like McDonald’s was very overconfident of themselves and they believed that they understand India very well.  India is a diverse country with different people from different cultural background.  So it is really not an easy task to understand a country and its diversities.  McDonald’s failed to understand the country and the values of the people of India.

Also most of the population can speak English but the thinking of Indians is never the same as the westerners.  Although being a democratic country but the country is still run by the leaders.  India’s thoughts about leadership and hierarchy are very different as still a leader controls the whole management. The leaders are considered to be the heads of the company and they are well known for their personality.  Difference in the way of working and operating can also be considered as one of reasons for failure.

It is certainly difficult for a person who hails from western countries to come and operate its business successfully in India. The rules and regulations which are followed in the western countries are not the same which are followed in India.  The westerners have a habit of following the legal system and thus the rules and regulations related to it. But the Indians do not generally work as the way the westerners do as Indians have a common hatred towards rules and they very well know how to adapt to short cut processes to become successful. (Vasudevan, 2007).

Why did McDonald's fail in India?

The solution to these challenges is McDonald’s should try to sell different kinds of vegetarian items instead of selling beef and pork products.  As most of the Indians are vegetarian, they would certainly enjoy their meal and also it won’t hurt the sentiments and the emotions of the common men (Miller, 2012).

The following data is a survey made on different sections of people in order to understand consumer preferences, and impact of sales.

Q1.  What kind of food are you fond of?

1. Homemade food
2. McDonald’s
3. KFC

Q2. What kind of food do you prefer?

1. Non-vegetarian
2. Vegetarian
3. Prefer to eat both of them

Q3. If McDonald’s stops selling beef, will you visit the outlet?

1. Won’t stop visiting the outlet
2. Will stop visiting the outlet
3. Won’t visit even if it sells foods made of beef and pork

Q 4. What will your reaction be if McDonald’s introduces few vegetarian items in its lunch?

1. Will enjoy meal more
2. Vegetarian food will be more famous than non vegetarian food
3. Whatever food is sold, whether vegetarian or non-vegetarian food, won’t visit the restaurant

Q5.    Did McDonald’s reduce its popularity by selling beef and pork products?

1. Yes, beef products reduced its popularity
2. Beef products are of good taste
3. Doesn’t matter whether it is vegetarian or non vegetarian food

Q6. How would the restaurant react against the protests made by the Hindus?

1. They will counter protest and try to seek a solution
2. They will stop selling non vegetarian products
3. They will leave India and go back to the western countries.

Q7. What will happen if McDonald’s shuts down all its outlet?

1. People will miss the mouthwatering sandwiches, and hamburgers
2. It won’t matter much if McDonald’s goes away from India
3. People will try other food joints which serve same food like McDonald’s.

Every research has an objective and this research is no exception to that.  The first and foremost objective of the research is to understand the impact of food of McDonald’s in the life of the Indians.  McDonald’s is famous for serving hamburgers, sandwiches and different types of breakfast dishes and desserts. But people are of the opinion that McDonald’s sell items which are made of beef and pork. So the research aims at after being severely criticized by Indian citizens for serving beef products, they will still continue to do their business in India or flee away.  Also the research tries to find out the reasons and circumstances of McDonald’s failure in India.

As mentioned, the research points out the specific reasons of McDonald being criticized by public. Being a western organization, McDonald’s could not match or adapt to the beliefs and attitudes of Indian citizens. Hence it started selling beef and pork products which outraged the BJP and the Hindus. They protested against the company and urged them to stop selling the products.  Also through research methodology, the researcher tries to find out what percentage of the population would still prefer to eat at McDonald’s. For such people it really does not matter whether the outlet serves vegetarian or non vegetarian food. These people are die heart fans of McDonald’s and no matter what the situation is they will continue to support the eatery.  Next, also the researcher tries to observe the ways McDonald could get back their initial position and reputation.  By following some techniques, McDonald can bring back the faith in the minds of the common people about the quality of their food (Mauborgne, 1987).

The objective of the research can be fulfilled by choosing the right methodology of the research. In this research, the survey methodology has been used. In order to understand how many people are in favor and against McDonald’s, face to face interviews are also conducted. To understand customer preference, one of the important methods of research has been chosen.  This survey research is used to understand the beliefs, thoughts, behavior and opinion of people. The survey method consists of a group of questions which is given to a particular section of people.  The result of the test is collected to analyze the general behavior of the common men.  Here, in this research, a questionnaire is given and asked a section of people to respond to the questions.  Based on the responses of the questions, the likes and dislikes of common men can be understood.  Survey method is the best method while assessing the likes and dislikes of people about any organization. The survey research gave numeric data which helped in getting the outcome.

In the Survey method, mostly young people were asked to participate.  Young people particularly in the age group of 20 to 50 were selected to respond to the questions.  There has been a reason behind choosing youngsters as they mostly visit eateries like McDonald’s to eat out.  Around 30 people were requested to participate in the survey research.  They were given the set of questions and their responses were collected in order to come to a decision.

The selection of the location is also an important factor in conducting a research.  Hence one of the busiest streets need to selected to conduct the research. In the Melbourne City, Fawkners and Flinders street was chosen for the research. Here, different people from different cultures live. Many Indians are also found to live in this part of the city.

Although the research seemed to be carried out smoothly, but there had been many challenges faced while conducting the research. The research was difficult to carry out as it proved to be time consuming.  Many people did not cooperate while the survey method of research was being carried out. They did not want to share their views and this was one of the implications.  Sometimes some people were over friendly and they spent a lot of time which resulted in wastage of time (DeBres, 2005).

As mentioned, a section of people were selected to give responses to some predetermined questions.  Out of them, a percentage of 65 supported McDonald’s and gave positive responses. According to them, McDonald was one of the biggest food joints and they really did not care about vegetarian or non vegetarian food that the outlet served. The rest of the people were against McDonald’s and felt it should leave India as it hurt the general sentiments of Indian people by selling beef and pork products.  They ate vegetarian food and they were the worshippers of cow and selling beef and pork products was not at all supported by them.

A graphical representation  has been used here to show the numeric values of the research:

Conclusion:

In conclusion, it can be said that McDonald’s is no doubt a world renowned organization.  They serve excellent and high quality food. However after coming to India, they could not be as successful as per expectation.

They were believed to serve beef and pork products which proved to be very detrimental for them.  As Hindus worship cows and consider them very sacred, so they were extremely angry and showered their anger with the help of several protests.  Hence McDonald came out with other options like selling vegetarian food and thus got back its popularity.

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