MCDOnald's: cultural intelligence
With over 36,000 locations in over 110 different countries, it is safe to say that McDonald's has come a long way since their humble beginnings as a drive-in that first opened in 1940. In fact, according to a survey that was conducted by Sponsorship Research International, the iconic golden arches were recognized and identified by 88 percent of the participants who were surveyed, whereas only 54 percent were able to identify the Christian cross (Lubin & Badkar, 2010). Unbelievable, I know. This fact, however, just goes to show how much of an impact McDonald's has made in the global market as a result of their effective brand positioning, marketing, and management.
McDonald's In India
Currently, there are over 350 McDonald's locations throughout India (Kannan, 2014). And with a population of over 1.2 billion people, it is easy to understand why India has been a primary focus of McDonald's international strategy since 1996. Despite already being a globally established brand name at the time, however, initial entry into India's market was not a simple task. For of those 1.2 billion people, the majority of the population was known to not eat beef or pork as a result of cultural and religious practices. This aspect of Indian culture obviously presented itself as a major hurdle for McDonald's to overcome. So, how was McDonald's able to reach the level of success in India given that they are primarily known for selling beef products? The answer is actually simple; cultural intelligence.
Knowing that most Indians did not eat beef or pork products, McDonald's revamped their entire menu. Beef patties were replaced with chicken and vegetarian patties. The Big Mac was replaced with the Maharaja Mac, and the famous McDonald's cheeseburger was replaced with the potato-based McAloo Tikki. Vegetarian friendly items were also added to the menus, and new spices were incorporated into old ingredients to account for differences in tastes. Interestingly enough, no where else in the world had McDonald's made such a drastic change to their menu before. In India, however, it was absolutely necessary in order to achieve success.
McDonald's In India
Currently, there are over 350 McDonald's locations throughout India (Kannan, 2014). And with a population of over 1.2 billion people, it is easy to understand why India has been a primary focus of McDonald's international strategy since 1996. Despite already being a globally established brand name at the time, however, initial entry into India's market was not a simple task. For of those 1.2 billion people, the majority of the population was known to not eat beef or pork as a result of cultural and religious practices. This aspect of Indian culture obviously presented itself as a major hurdle for McDonald's to overcome. So, how was McDonald's able to reach the level of success in India given that they are primarily known for selling beef products? The answer is actually simple; cultural intelligence.
Knowing that most Indians did not eat beef or pork products, McDonald's revamped their entire menu. Beef patties were replaced with chicken and vegetarian patties. The Big Mac was replaced with the Maharaja Mac, and the famous McDonald's cheeseburger was replaced with the potato-based McAloo Tikki. Vegetarian friendly items were also added to the menus, and new spices were incorporated into old ingredients to account for differences in tastes. Interestingly enough, no where else in the world had McDonald's made such a drastic change to their menu before. In India, however, it was absolutely necessary in order to achieve success.
Another cultural aspect that was taken into consideration was the fact that many Indians do not eat-out at restaurants. In fact, based on a research study conducted in 2003, out of "100 meals that people ate in a month, only three were eaten out" (Kannan, 2014). In addition, from a customer stand point, many Indians did not consider eating a hamburger alone as a sufficient meal. So, in order to account for this aspect, McDonald's introduced the McAloo Tikki Burger for 20 rupees, and positioned the burger to appeal towards Indians as an alternative to street food. Where instead of being viewed as an actual meal, the sandwich could be eaten as an affordable on-the-go snack. Since then, research has shown that eating out has "gone up to 9-10 times per 100 meals and McDonald's in India has more than 320 million customers a year" (Kannan, 2014).
Currently, McDonald's is in the process of opening their very first 100 percent vegetarian location in India. This is due to the fact that in India, "a vegetarian is a strict vegetarian" (Hannon, 2012), and therefore has been a difficult segment of India's market to appeal towards. For although 50 percent of the McDonald's menus in India are composed of vegetarian items, the strict nature and value systems of many vegetarians throughout India actually keeps them from even entering a McDonald's because there is still meat items prepared in the kitchen. In addition to this, McDonald's also understands that things like onions and garlic are also prohibited near many holy temples. So, in an effort to target the religious pilgrims who abide to strict vegetarian diets, McDonald's is also taking this aspect into consideration as well.
This example of McDonald's and India is a perfect example of how cultural intelligence can greatly benefit an organization when dealing with multicultural situations. More importantly, elements such as cultural knowledge and cross-cultural skills are relevant as well throughout the case when considering the fact that McDonald's had incorporated many of the lessons learned from previous international ventures into their entry plan for India. Market research of the host nation was carefully done, and a sound entry plan was devised by completely adapting their menu to not only appeal to the India's tastes, but also their norms and values as well. In the end, whether one likes McDonald's or not, one must agree that McDonald's global success is largely impart due to their high levels of cultural intelligence and ability to account for different cultures throughout the world. Not only have they been able to penetrate numerous multicultural markets with great success, but they have also been able to create and sustain instantaneous brand loyalty and trust as well.
Currently, McDonald's is in the process of opening their very first 100 percent vegetarian location in India. This is due to the fact that in India, "a vegetarian is a strict vegetarian" (Hannon, 2012), and therefore has been a difficult segment of India's market to appeal towards. For although 50 percent of the McDonald's menus in India are composed of vegetarian items, the strict nature and value systems of many vegetarians throughout India actually keeps them from even entering a McDonald's because there is still meat items prepared in the kitchen. In addition to this, McDonald's also understands that things like onions and garlic are also prohibited near many holy temples. So, in an effort to target the religious pilgrims who abide to strict vegetarian diets, McDonald's is also taking this aspect into consideration as well.
This example of McDonald's and India is a perfect example of how cultural intelligence can greatly benefit an organization when dealing with multicultural situations. More importantly, elements such as cultural knowledge and cross-cultural skills are relevant as well throughout the case when considering the fact that McDonald's had incorporated many of the lessons learned from previous international ventures into their entry plan for India. Market research of the host nation was carefully done, and a sound entry plan was devised by completely adapting their menu to not only appeal to the India's tastes, but also their norms and values as well. In the end, whether one likes McDonald's or not, one must agree that McDonald's global success is largely impart due to their high levels of cultural intelligence and ability to account for different cultures throughout the world. Not only have they been able to penetrate numerous multicultural markets with great success, but they have also been able to create and sustain instantaneous brand loyalty and trust as well.