PREPARED FOR MR. JOHN TAN

Prepared by:

Inderjit Kaur 20110142Monali Barot 20110143Pranay Lokre 20110854Udita Sood 20101401

Fast food industry in Indian market- Mc Donald’s Vs Burger King

Some Facts about fast growing Indian economy

The world's 10th largest in terms of nominal GDP at $1.53 trillion and the 4th largest in terms of purchasing power parity at $4.06 trillion, according to the International Monetary Fund.

The service sector makes up 54 per cent of the GDP, the agricultural sector 28 per cent, and the industrial sector 18 per cent

The equity market is 4th largest in Asia and 8th largest in world with capitalization of the companies listed on the BSE stood at $1.63 trillion as of December 2010.

Number of 55 billionaires, according to the Forbes 2011  and stands number 3rd in the worlds ranking after USA and china

Indian consumer market is world's 13th largest, is expected to become 5th largest by 2030.

India ranks 2nd worldwide in farm output. India is the largest producer and consumer of tea in the world, accounting for more than 30 per cent of global

By 2030, Stan Chart said India will be at number three position with an economy of $30.3 trillion, behind China ($73.5 trillion) and US ($38.2 trillion).

Over half of India's population is below 25 years. By 2020, the average age of an Indian is expected to be 29 years.

Overview of fast food industry in India With changing needs and lifestyles of consumers, global

as well as Indian food consumption patterns are rapidly evolving. Higher disposable incomes have resulted in greater spending and consumption among consumers

The Indian fast food market is valued at $1-billion appx. And Sales at fast-food chains are growing at a rate of 28%

Major local competitor in snack food are the street selling food like dosa, samosa, bhelpuri etc. but change in demographics, income levels and western influence has given rise to the fast food industry

Nirula’s was having monopoly in India initially to introduce pizza and burgers before the western chains arrived in India

The major fast food chains operating in India include McDonald's, Dominos, Pizza Hut TGI, Pizza Express, Pizza Corner, Nirulas, Wimpys,and Haldirams and now Burger King.

Mc Donald’s in India

Being the world’s biggest food service retailer Mc Donald’s began its operations in India in January 1996 in joint ventures with two Indian restaurateurs Vikram Bakshi and Amit Jatia.

It has around 200 family restaurants in India across 60 cities.

Mc Donald’s is serving around half a million Indians every day.

McDonald’s competes with fast food chains like Pizza Hut, Domino’s Pizza, Papa John’s, Nirula’s and KFC in India

.

Key strategy is to be affordable to masses which is achieved by its bulk buying, long term vendor contracts and manufacturing efficiencies.

In 2009, mc Donald's India won most preferred multi brand fast food outlets.

Introduction of local taste based vegetarian menus, no beef and pork products are used.

More then 5000 employees.

Burger king in India

Burger King Corporation is the second largest fast-food chain in the United States, trailing only McDonald's.

Principal Global Competitors : McDonalds Corporation; Wendy's International Inc.; Yum! Brands Inc.

Burger King has set up a 51:49 partnership with DLF and operate on a franchisee model in the yr 2007

Target customers are primarily the youth and not family restaurant model unlike Mc Donald's.

Low cost hamburgers and Additional vegetarian option on the menu is the key for the survival.

PORTER’S FIVE FORCE Threat of entry

POSITIVE FACTORS

India is 4th largest economy.

Economies of scale. Local distributers. Govt. support open trade.

NEGATIVE FACTORS Consumer loyalty. Access to supply. Socialist and swadeshi

mindset. Large capital investment.

Threat of substitutes.

Negative factors

McDonalds' and Burger king are not substitute for an Indian food. It is just a new option.

Indian want a slice of America but only once in a while- traditional eating habits.

Dominos, Wimpey's, Nirula offering number of similar food items.

Bargaining power of Buyers

POSITIVE FACTORS

Concentration of buyers high.

High income.

NEGATIVE FACTORS

Low switching cost. Vendors and road side stalls

are cheap source of food. Ready to eat are available.

Bargaining power of Suppliers

POSITIVE FACTORS

Large number of suppliers. Low switching cost.

NEGATIVE FACTORS

Few technology oriented suppliers like cold chain for McDonalds’

Available quality is not up to mark.

Competitive rivarlyPOSITIVE FACTORS

High brand positioning. Entered in an India in joint

ventures with an Indian companies. High cognitive space.

NEGATIVE FACTORS

Market are un-differentiated . Highly fragmented food

market. Millions of road side stalls. Organized chain’s of Nirula,

Wimpey's. Indians love spicy food and

west food is blunt in taste.

Swot of McDonald’s

STRENGTH

Great partnership with coca-cola. Global presence. Mantra of QSCV. First to provide nutrition facts to

customers. Operational excellence. Innovation by adapting cultural

differences. Successful advertisement (I’m

loving it) Offering Wi-Fi. Cold chain supply method

Swot of Mc.Donald’s

WEAKNESS

High employee turn over. More focus on children. High prices. Lack of innovation

products-offering breakfast and festival meals.

Management of joint ventures.

Swot of McDonald’s

OPPORTUNITIES

Giving din-out market for youngsters and adults.

use mobile text messages to offer services.

Understand need of society and undergo new product line.

Upscale restaurants settings.

Provide free parking area.

Swot of McDonald’s

THREATS

Local competition. Consider as unhealthy food. Presence of other fast foods. Parents critise their

marketing strategy of “cradle to grave”.

Foreign currency fluctuations.

Living in mature and saturated industry.

Swot of Burger King

STRENGTH

Second largest fast food hamburger industry in the world.

Strong brand equity. 90% restaurants owned by

franchise. Joint ventures with DLF to

overcome real estate cost. Focus on teens and young men. Open cooking flame method. Provide variation in food.

Swot of Burger King

WEAKNESS

Product development. High price. Relies on franchises to

execute its brand promise.

Swot of Burger King

OPPORTUNITIES

New product development –an Indian breakfast snacks.

Expansion in emerging market.

Healthy food. Target consumer by

understanding social needs.

Swot of Burger King

THREATS

Health Increasing labor cost. Unable to understand

cross culture differences.

PESTEL Analysis for McDonald’s and Burger King for India

POLITICAL ENVIRONMENT Political factor is favorable No trade restrictions for

food businesses No minimum wages No higher taxes Employees Union are

defensive

ECONOMIC FACTOR

Economic growth is 7% (+) Inflation rate is increasing

gradually (-)

PESTEL Analysis for McDonald’s and Burger King for India

PESTEL Analysis for McDonald’s and Burger King for India

SOCIAL FACTOR

Second most populous country

More than 50% population is under 25

Food lovers more nuclear families-

working couples Becoming health conscious

among the time

PESTEL Analysis for McDonald’s and Burger King for India

TECHNOLOGY

Increasing technological development

R&D development opportunities available

PESTEL Analysis for McDonald’s and Burger King for India

ENVIRONMENTAL FACTOR Environmental changes

affects the diet of the people

Global warming turns the choice of food from Non-vegetarian to Vegetarian

PESTEL Analysis for McDonald’s and Burger King for India

LEGAL FACTOR

Significant factor for long term stay and for new entrants

Competition Law, health and safety law, labor law, employment law

Symbol is necessary for vegetarian and non vegetarian food