Introduction

Strategic management involves the formulation and implementation of the major goals and
initiatives taken by a company's top management on behalf of owners, based on consideration
of resources and an assessment of the internal and external environments in which the
organization competes.
Strategic management provides overall direction to the enterprise and involves specifying the
organization's objectives, developing policies and plans designed to achieve these objectives,
and then allocating resources to implement the plans. Academics and practicing managers
have developed numerous models and frameworks to assist in strategic decision making in
the context of complex environments and competitive dynamics. Strategic management is not
static in nature; the models often include a feedback loop to monitor execution and inform the
next round of planning.
Harvard Professor Michael Porter identifies three principles underlying strategy: creating a
"unique and valuable [market] position", making trade-offs by choosing "what not to do", and
creating "fit" by aligning company activities to with one another to support the chosen
strategy.[Dr. Vladimir Kvint defines strategy as "a system of finding, formulating, and
developing a doctrine that will ensure long-term success if followed faithfully."
Corporate strategy involves answering a key question from a portfolio perspective: "What
business should we be in?" Business strategy involves answering the question: "How shall we
compete in this business?" In management theory and practice, a further distinction is often
made between strategic management and operational management. Operational management
is concerned primarily with improving efficiency and controlling costs within the boundaries
set by the organization's strategy.

Definition
Strategic management can be defined as the art and science of formulating, implementing,
and evaluating cross-functional decisions that enable an organization to achieve its
objectives. As this definition implies, strategic management focuses on integrating
management,

marketing,

finance/accounting,

production/operations,

research

and

development, and information systems to achieve organizational success. The term strategic
management in this text is used synonymously with the term strategic planning. The latter
term is more often used in the business world, whereas the former is often used in academia.
Sometimes the term strategic management is used to refer to strategy formulation,
implementation, and evaluation, with strategic planning referring only to strategy
formulation. The purpose of strategic management is to exploit and create new and different
opportunities for tomorrow; long-range planning, in contrast, tries to optimize for tomorrow
the trends of today.
The term strategic planning originated in the 1950s and was very popular between the mid1960s and the mid-1970s. During these years, strategic planning was widely believed to be
the answer for all problems. At the time, much of corporate America was obsessed with
strategic planning. Following that boom, however, strategic planning was cast aside during
the 1980s as various planning models did not yield higher returns. The 1990s, however,
brought the revival of strategic planning, and the process is widely practiced today in the
business world. A strategic plan is, in essence, a companys game plan. Just as a football team
needs a good game plan to have a chance for success, a company must have a good strategic
plan to compete successfully. Profit margins among firms in most industries have been so
reduced by the global economic recession that there is little room for error in the overall
strategic plan.
A strategic plan results from tough managerial choices among numerous good alternatives,
and it signals commitment to specific markets, policies, procedures, and operations in lieu of
other, less desirable courses of action.

Features of Strategic Management

1. Flexibility: It is one of the important features in strategic management. In the case of
determining long term strategies, several intricate problems and hazards can be
visible, on that case, the management can take hurried decision adapting to changed
environment.
2. Integration: To take planning under the strategic management, it is essential to
integrate goals objects alongside the internal and external sides of the institution.
3. Speed: To bring the dynamism under the strategic management, it is inevitable to
access the important affairs so that it may be possible to speed up the pace of action at
present and future.
4. Innovation: Innovation or creativity is an important feature in the case of strategic
management. We know, environment is ever changing, that is way demand, taste, and
behavioural patterns of employers and employees are to be changed. Strategic
management controls and takes things forward by producing new strategic planning
and framing newer strategies.
5. Long-term plan: Long-term planning is very essential to bring good result. There is
no way to adopt long-term planning if anybody intends to compete in the field of
industry.
6. Guide-line of plan: Guide-line of planning pin-points to implement any planning
under the strategic management.
7. Determination of alternatives: It is a very urgent affair to implement goals of any
institution. Under the strategic management, determination of alternatives can face
obstacles standing on the way easily.
8. Consideration of environment: This tool which can move anybody to achieve goals
ignoring all unfavourable environments consideration of environment directs to take
decision cautiously.
9. Fundamental : Strategic management is fundamental for improving the long-term
performance of the organization.
10. Implication :Strategic management ensure that strategic is put into

action,

implementation is done through action plans.

Strategic Management Process

Strategic planning is part of the strategic management process. Strategic management entails
both strategic planning and implementation, and is the process of identifying and executing
the organizations strategic plan, by matching the companys capabilities with the demands of
its environment.

Strategic planning comprises (in the above figure) the rst 5 of 7 strategic management tasks:
(1) dening the business and developing a mission, (2) evaluating the rms internal and
external strengths, weaknesses, opportunities, and threats, (3) formulating a new business
statement, (4) translating the mission into strategic goals, and (5) formulating strategies or
courses of action. In its simplest sense, however, strategic planning is remarkably simple:
Decide what business youre in now and which ones you want to be in, formulate a strategy
for getting there, and execute your plan. The entire 7-step strategic management process
follows:

Step 1: Define the current business and mission

Every company must choose the terrain on which it will competein particular, what
products it will sell, where it will sell them, and how its products or services will differ from
its competitors. Rolex and Seiko are both in the watch business, but Rolex sells a limited
product line of high-priced quality watches. Seiko sells a wide variety of relatively
inexpensive but innovative specialty watches with features like compasses and altimeters.
Therefore, the most basic strategic decisions managers make involve deciding what
4

business their rms should be in: For instance, in terms of the products or services theyll
sell, the geographic locales in which theyll sell them, and how theyll distinguish their
products or services from competitors. They ask, Where are we now in terms of the
business were in, and what business do we want to be in, given our companys opportunities
and threats, and its strengths and weaknesses? Managers then choose strategiescourses of
action such as buying competitors or expanding overseasto get the company from where it
is today to where it wants to be tomorrow. Managers sometimes use a vision statement as a
sort of shorthand to summarize how they see the business down the road. The companys
vision is a general statement of its intended direction that shows, in broad terms, what we
want to become.
Visions are usually longer term, broader images; most Managers also formulate mission
statements to...communicate who we are, what we do, and where were headed.Whereas
visions usually lay out in very broad terms what the business should be, the mission lays out
in broad terms what our main tasks are now.

Step: 2 Perform external and internal audits

Ideally, managers begin their strategic planning by methodically analyzing their external and
internal situations. The strategic plan should provide a direction for the rm that makes sense,
in terms of the external opportunities and threats the rm faces and the internal strengths and
weaknesses it possesses. To facilitate this strategic external/internal audit, many managers use
SWOT analysis. This involves using a SWOT chart like that in Figure 3- to compile and
organize the process of identifying company Strengths, Weaknesses, Opportunities, and
Threats.

Step: 3 Formulate New Business and Mission Statements

Based on the situation analysis, what should our new business be, in terms of what products it
will sell, where it will sell them, and how its products or services will differ from its
competitors? What is our new mission and vision?

Step: 4 Translate the Mission into Strategic Goals

Saying the mission is to make quality job one is one thing; operationalizing that mission
for your managers is another. The rms managers need strategic goals. What exactly does
5

that mission mean, for each department, in terms of how well boost quality? As an example,
WebMDs sales director needs goals regarding the number of new medical-related content
providersvitamin rms, hospitals, HMOsit must sign up per year, as well as sales
revenue targets. The business development manager needs goals regarding the number of new
businessessuch as using WebMD to help manage doctors ofces onlinehe or she is to
develop and sign. Similarly, Citicorp cant function solely with a mission like, provide
integrated, comprehensive nancial services worldwide. To guide managerial action, it
needs goals in terms of things like building shareholder value, maintaining superior rates of
return, building a strong balance sheet, and balancing the business by customer, product, and
geography.

Step 5: Formulate Strategies to Achieve the Strategic Goals

Again, a strategy is a course of action. It shows how the enterprise will move from the
business it is in now to the business it wants to be in (as laid out by its vision, mission, and
strategic goals), given the rms opportunities, threats, strengths, and weaknesses. The
strategies bridge where the company is now, with where it wants to be tomorrow. The best
strategies are concise enough for the manager to express in an easily communicated phrase
that resonates with employees. Keeping the strategy clear and concise helps ensure that
employees all share that strategy and so make decisions that are consistent with it. For
example, the executive teams shared understanding of Nokias strategy reportedly helps explain how the rm can make thousands of decisions each week so coherently.

Step 6: Implement the Strategies

Strategy implementation means translating the strategies into actions and resultsby actually
hiring (or ring) people, build- ing (or closing) plants, and adding (or eliminating) products
and product lines. Strategy implementation involves drawing on and applying all the
management functions: planning, organizing, stafng, leading, and controlling.

Step 7: Evaluate Performance

Strategies dont always succeed. Managing strategy is an ongoing process. Competitors
introduce new products, technological innovations make production processes obsolete, and
social trends reduce demand for some products or services while boosting demand for others.
Strategic control keeps the companys strategy up to date.
6

Functional Level Strategy

The functional level of an organization is the level of the operating divisions and
departments. It is the responsibility of the strategist to provide direction to functional
managers regarding the execution of plan and strategies for the successful implementation.
The role of functional strategy is very crucial for the existence of an organization. Functional
strategy provides support to overall business strategy and secondly it spells out as to how
functional managers will proceed to achieve the set goals and objectives. Departments like
marketing, finance, production and HR are based on the functional capabilities of an
organization.
Within functional strategies there might be several sub-level areas. Functional strategies are
planned keeping in mind the higher level strategies. In terms of level of strategy formulation
functional strategy falls below business-level strategies.
The development plan of functional strategies is conceived and designed by top-level
management. Strategist manager plans executable functional strategies. Functional strategies
support the overall business and corporate level business.
Functional strategies are formulated by specialists in each area. It outlines the action plan and
sets the milestones that are needed to achieve before reaching to the final goal of corporate
strategy. Functional strategies work as a backbone of the organization. It provides the basic
information on resources and capabilities on which the higher level strategy is designed. It
involves coordinating the various functions and operations needed to design, manufacture,
deliver, and support the product or service of each business within the corporate portfolio.
Functional level strategy executes the plan developed at a higher level for the growth and
advancement of an organization. Functional strategies are primarily concerned with:

Efficiently utilizing specialists within the functional area.

Integrating activities within the functional area (e.g., coordinating advertising,

promotion, and marketing research in marketing; or purchasing, inventory control,
and shipping in production/operations).

Assuring that functional strategies mesh with business-level strategies and the overall
corporate-level strategy.

Operational Strategy:
Operations strategy is the means by which operations implements the firms corporate
strategy and helps to build a customer-driven firm. It links long-term and short-term
operations decisions to corporate strategy. It is the core of managing processes and
value chains. Operations Strategy supports the corporate strategy and requires
continuous cross-functional interaction.

Human Resources
Human resources are considered as biggest assets to any organization success.
Strategic responsibilities of the human resource manager include assessing the
staffing needs and developing a staffing plan for effectively implementing the other
formulated strategies. This plan must consider how best to manage employee costs
and also include how to motivate employees and managers.
The human resource department must develop performance incentives that clearly
link performance with pay. The process of empowering managers and employees
through their involvement yields the greatest benefits to organizations. A welldesigned strategic-management system can fail if insufficient attention is given to the
human resource dimension. In a large number of organizations, human resources are
now viewed as a source of competitive advantage. There is greater recognition that
different competencies are obtained through highly developed employee skills.
Marketing:
Marketing is considered as one of the most important functions of organization. This
function satisfies that need of organization for which organization is formed i.e.
serving customers. In the present day it is considered to be the activities related to
identifying the needs of customers and taking such actions to satisfy them in return of
some consideration. In marketing it is more important to do what is strategically right
than what is immediately profitable i.e. marketing always look for long term profit
and growth rather immediate profit.

The marketing function maintains a strong relationship with other functions to

achieve its objectives. Marketing always stress for creating a value chain or value
delivery network to efficiently distribute goods and services of organization and
maintain a strong relationship with all the components of this value chain i.e.
customers, supplier, distributors and internal departments of organizations. Marketing
plays a role of mediators between all departments.

Financial
The financial strategy is another most important strategy with marketing. Finance is
considered as blood to body. Finance and Accounts is considered to be central to any
strategy implementation. Some of the key strategies of finance are for:

acquiring needed capital/sources of fund,

developing projected financial statements budgets,

Management / usage of funds,

and establishing valuation of business.

Company Profile Mc Donalds

The business began in 1940, with a restaurant opened by brothers Richard and Maurice
McDonald at

1398

North

Street

at

West

14th

Street

in San

Bernardino,

California (at 34.1255N 117.2946W). Their introduction of the "Speedee Service System"
in 1948 furthered the principles of the modern fast-food restaurant that the White
Castle hamburger chain had already put into practice more than two decades earlier. The
original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped
head whose name was "Speedee". Speedee was eventually replaced with Ronald
McDonald by 1967 when the company first filed a U.S. trademark on a clown shaped man
having puffed out costume legs.

McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961, with
the description "Drive-In Restaurant Services", which continues to be renewed through the
end of December 2009. In the same year, on September 13, 1961, the company filed a logo
trademark on an overlapping, double arched "M" symbol. The overlapping double arched
"M" symbol logo was temporarily disfavored by September 6, 1962, when a trademark was
filed for a single arch, shaped over many of the early McDonald's restaurants in the early
years. Although the "Golden Arches" appeared in various forms, the present form as a letter
"M" did not appear until November 18, 1968, when the company applied for a U.S.
trademark.

The present corporation dates its founding to the opening of a franchised restaurant by Czech
American businessman Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth
McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the
company and led its worldwide expansion, and the company became listed on the public
stock markets in 1965. Kroc was also noted for aggressive business practices, compelling the
McDonald brothers to leave the fast food industry. The McDonald brothers and Kroc feuded
over control of the business, as documented in both Kroc's autobiography and in the
10

McDonald brothers' autobiography. The San Bernardino store was demolished in 1976 (or
1971, according to Juan Pollo) and the site was sold to the Juan Pollo restaurant chain. It now
serves as headquarters for the Juan Pollo chain, as well as a McDonald's and Route 66
museum.[12] With the expansion of McDonald's into many international markets, the company
has become a symbol of globalization and the spread of the American way of life. Its
prominence has also made it a frequent topic of public debates about obesity, corporate
ethics and consumer responsibility.
When McDonalds started their operations in 1948 the menu consisted of cheese burgers and
hamburgers, pie, potato chips and beverages like milk, soft drinks, coffee. The cost of
hamburger at that time was mere 15 cents. Now it is the largest food chain all over the world.
By 1965 McDonalds had 700 restaurants. McDonalds all over the worlds are aligned by
Global strategy of plan to win. This strategy focuses on price, people, customer experience,
promotion and place.
It is a publicly traded company and around 80% of the McDonalds restaurants all over the
world are operating on franchisee basis. Its competitors consist of Sub Way, Burger King,
Wendys and YUM which run some of the very famous brands like KFC, A&W, Pizza Hut
and Taco Bell. McDonalds is the industry leader in terms of sales, market cap, employees,
gross and net margins. The main cited reason of McDonalds success is the quality standards
they have been able to maintain all over the world despite having location constraints at some
of the places. They have consistently developed new menu items thereby always attracting
new sets of customer and giving enough reasons to old customer to be attached. With this
challenging cut throat competition, public relations are becoming very critical for quick
restaurant industry. A psychological competition right now in US is the criticism this industry
is facing from large obese population. This is especially true for the concept of value meals,
which provide extra large portion of unhealthy foods. The nutritional value of the quick
restaurant segment has sparked many a campaigns and few legal actions. According to New
York City department of Health a law was passed in 2008 making it mandatory for quick
restaurant to post all the calorie related information against the food item on the menu boards.
One of the biggest outcries has been the promotion of this food habits among the socio
economic classes and the direct correlation of the obesity among the people. In response
McDonalds introduced new and healthier item in the menu and shifted its marketing. With
this background McDonalds entered into Singapore as a very famous brand to cater.
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Mission and Vision Statement of Mc Donalds

Mission Statement:
McDonald's brand mission is to be our customers' favorite place and way to eat and drink.
Our worldwide operations are aligned around a global strategy called the Plan to Win, which
center on an exceptional customer experience People, Products, Place, Price and Promotion.
We are committed to continuously improving our operations and enhancing our customers'
experience.
McDonalds Values
We place the customer experience at the core of all we do. Our customers are the reason
for our existence. We demonstrate our appreciation by providing them with high quality food
and superior service in a clean, welcoming environment, at a great value. Our goal is quality,
service, cleanliness and value (QSC&V) for each and every customer, each and every time.
We are committed to our people. We provide opportunity, nurture talent, develop leaders
and reward achievement. We believe that a team of well-trained individuals with diverse
backgrounds and experiences, working together in an environment that fosters respect and
drives high levels of engagement, is essential to our continued success.
We believe in the McDonalds System. McDonalds business model, depicted by our threelegged stool of owner/operators, suppliers, and company employees, is our foundation, and
balancing the interests of all three groups is key.
We operate our business ethically. Sound ethics is good business. At McDonalds, we hold
ourselves and conduct our business to high standards of fairness, honesty, and integrity. We
are individually accountable and collectively responsible.
We give back to our communities. We take seriously the responsibilities that come with
being a leader. We help our customers build better communities, support Ronald McDonald
12

House Charities, and leverage our size, scope and resources to help make the world a better
place.
We grow our business profitably. McDonalds is a publicly traded company. As such, we
work to provide sustained profitable growth for our shareholders. This requires a continuous
focus on our customers and the health of our system.
We strive continually to improve. We are a learning organization that aims to anticipate and
respond to changing customer, employee and system needs through constant evolution and
innovation.

13

Products of Mc Donalds
Burgers and Wraps
Mc Aloo Tikki
Mc Veggie
Mc Aloo Wrap
Masala Grill
Mc Spicy Paneer
Mc Egg
Chicken Mc Grill
Chicken Maharaja
Spicy Chicken Wrap
Mc Chicken
Filet-o-Fish
Sides
Veg Pizza Puff
French Fries
Desserts
Mc Swirl(Chocolate / Butterscotch )
Mc Flurry
Strawberry Shake
Chocolate Shake
Chocolate Brownie
Happy Meals
Breakfast
Hash browns
Mc Muffins
14

 Hot Cakes
Egg and Cheese Muffins

Mc Donalds entry in India

Entry and Struggle
McDonalds entered the Indian market in 1996 as a joint venture (JV) between Oak Brook III.
and 2 local partners Hardcastle Restaurants Private Ltd. in western India, and Connaught
Plaza Restaurants Private Ltd. in northern India.
To enter a market where consuming beef is off limits was very challenging and ambitious.
McDonalds objective was to be inspired by the culture of India and to deliver the greatest of
food experiences to the customers in India bringing in the splice of life. They were aiming for
to change the local perception of the new product being American and remove the fear of
unknown, where family dining in was a custom for centuries. The management wanted to
advertise McDonalds as a stimulator and advocate of family and culture values. The
diversity in language and communication is one of the greatest components of the culture.
Until 2000, McDonalds advertised their brand mainly by putting the main focus on the outlet
design and tailor made food menu for the needs and desires of the diverse Indian population.
McDonalds entry into India was met with stiff opposition. Members of the Hindu
organization, the Bajrang Dal, the militant arm of one of the dominant fundamentalist
political parties in India, the Bharatiya Janata Part (BJP) openly protested against the
company by attacking its branches across India on May 4th, 2001. The members of the
Bajrang Dal demolished the restaurant in Thane, a northeastern Bombay suburb. In southern
Bombay, a McDonalds store was besieged by protestors from the leading Bharatiya Janata
Party, who shouted slogans and stained the restaurants mascot with cow dung. SHIV SENA
another Hindu alliance also threatened to protest outside the McDonalds corporate office
after reports of a lawsuit being filed against McDonalds in Seattle
The biggest problem McDonald faced was during the launch of its product in India was
the public image it was carrying as an International food chain and not matching Indian
standards. There were concerns raised about how the burgers are made in McDonalds.

15

Offering the cheapest burger in the world was not easy. In India, McDonalds offered a menu
that did not had any beef or pork items as well as special product formulations for
accommodating Indian culture and palate. Furthermore, all the vegetarian products, even the
mayonnaise in vegetable burgers, were egg-less and 100% vegetarian. Additions to the menu
have been a regular feature of McDonalds in India. The company in India conducted regular
qualitative as well as quantitative studies, which tracked the target consumer lifestyle in
India, a practice that had followed internationally as well.
It was under these circumstances that McDonalds India went about creating the cold chain
infrastructure for its restaurants in the country. As McDonalds always considers the quality
of all its products to be of primary importance, it sets high standards for its suppliers that are
amongst the biggest in the food industry. World over, McDonalds always believed in
development of close relationships with suppliers and this is precisely what it has done in
India.

Background
In March 2001, the McDonalds Corporations Indian operation was at a critical juncture in
its evolution. Over the previous few months, the company had expanded its retail base from
Mumbai (10 outlets) and Delhi (14 outlets) to Bangalore (one outlet), Pune (one outlet),
Jaipur (one outlet) and the Delhi-Agra highway (one outlet). During 2001, McDonalds had
plans to open 15 more outlets with one each in Ludhiana and and the rest in cities where it
already had a presence.

16

By 2003, the company planned to increase the number of outlets to 80 and the cumulative
investment in India to more than Rs 10 billion. (The approximate exchange rate in March
2001 was Rs 46.50 = US$1.) This would represent a threefold increase over the cumulative
investment until June 2000 (Rs 3.5 billion). Three other cities (Agra, Baroda and Chandigarh)
would also have at least one McDonalds outlet by 2003.
The Indian venture had been operational for more than four years and had recorded healthy
growth but no profits. Commenting on the progress until that point in time, Vikram Bakshi
(McDonalds partner in Delhi) said: 'Our growth and expansion in India over the last three
years has definitely been very encouraging. Only a few months previously, Amit Jatia
(McDonalds other partner in charge of the Mumbai outlets) had said: We are still to recover
our investment. You need a very large base and break-even is normally after seven to ten
years. Despite the ventures lack of profits, Jatia also showed his enthusiasm for expansion
when he said, Having cracked the Indian market, McDonalds is ready to leverage its initial
investments in infrastructure to rapidly expand.

17

Observers were wondering about the appropriateness of McDonalds bold strategic move.
Was the additional investment wise, especially in view of the lack of profitability of the
existing operations? Since many of the new cities to be entered were less Westernised than
Mumbai or Delhi, many observers doubted whether the demand potential would be sufficient
to justify the economic operation of outlets. The cost and availability of prime real estate in
major Indian cities was another issue. Opening a new outlet required an average investment
of Rs. 30 million. In Mumbai and Delhi where prime real estate was expensive, the
investments could be higher. Finally, some analysts doubted whether McDonalds could
afford to spend big amounts on advertising to create a strong brand name reputation if its
outlet base and customer base remained relatively narrow.

The Indian market

India is a vast subcontinent with an area one-quarter of that of the United States, and a
population almost four times that of the US, at about 950 million. The per capita GDP is quite
low, at US$390 in 1999. However, after adjusting for purchasing power parity, India was
18

ranked the fifth-largest economy in the world (ranking above France, Italy, the UK and
Russia) with the third largest GDP in Asia in 1999. (See Exhibit 5 for income distribution in
India.) Among emerging economies, India is often considered second only to China.

The country has a few anti-Western factions, which have opposed the entry of MNCs in
general. The mistrust of MNCs could be at least partially attributed to the fact that the British
rule of India was rooted in the entry of the British East India Company (for trading purposes)
into the country. There are also several small but vocal groups of health activists and
environmentalists that are opposed specifically to the entry of fast-food giants such as
McDonalds and KFC. When KFC opened its restaurant in Bangalore in 1995, local officials
found that KFC had excessive levels of monosodium glutamate (MSG) in its food and closed
the outlet. The outlet soon reopened, however. Said Vandana Shiva, a vocal exponent of
environmental and animal welfare issues, in an audio interview with McSpotlight, The
McDonalds experience, which is really the experience of eating junk while thinking you are
in heaven, because of the golden arches, which is supposed I guess to suggest that you enter
heaven, and the clown Ronald McDonald, are experiences that the majority of the Indian
population would reject. I think our people are too earthy. First of all, it would be too
expensive for the ordinary Indian for the peasant, or the person in the slums. Its an
experience that a very tiny elite would engage in, and most of that elite which knows what
19

good food is all about would not fall for it. McDonalds is doing no good to peoples health,
and in a country like India where first of all, we are not a meat culture, and therefore our
systems are ill-adapted to meat in the first place, and where people are poorer shifting to a
diet like this will have an enormous impact.

McDonalds entry strategy in India

McDonalds India was incorporated as a wholly owned subsidiary in 1993. In April 1995, the
wholly owned subsidiary entered into two 50:50 joint ventures: with Connaught Plaza
Restaurants (Vikram Bakshi) to own and operate the Delhi Restaurants; and Hardcastle
Restaurants (Amit Jatia) to own and operate the Mumbai outlets. Although McDonalds had
done product adaptation to suit local tastes and cultures in several previous ventures, such as
the Teriyaki Burger in Japan, rice dishes in Indonesia, noodles in Manila and McLox Salmon
sandwiches in Norway, the degree of adaptation required in India was significantly greater.
McDonalds replaced its core product, the Big Mac, with the Maharaja Mac. The latter had a
mutton patty (instead of the beef patty in the Big Mac), to avoid offending the sensibilities of
Hindus (80 per cent of the population), who consider killing cows as sacrilegious, and
Muslims (12 per cent of the population), for whom pork is taboo. In addition, since 40 per
cent of the market is estimated to be vegetarian, the menu included the McAloo Burger
(based on potato), a special salad sandwich for vegetarians, and the McChicken kebab
sandwich. It also offered spicier sauces, such as McMasala and McImli (made from
tamarind). Other elements of the menu, such as chicken nuggets, fillet fish sandwiches, fries,
sodas and milkshakes, were in common with the rest of the McDonalds system. In 1998,
McDonalds India set up a menu development team to collect consumer feedback.
Subsequently, the team came up with its menu vision, and new products since then have been
based on this vision. The adaptation of the strategy went well beyond the menu,
encompassing many aspects of the restaurant management system. Two different menu
boards were displayed in each restaurant green for vegetarian products and purple for nonvegetarian products. Behind the counter, restaurant kitchens had separate, dedicated
preparation areas for the meat and non-meat products. The kitchen crew (in charge of
cooking) had different uniforms to distinguish their roles and did not work at the vegetarian
and non-vegetarian stations on the same day, thus ensuring clear segregation. The wrapping
of vegetarian and non-vegetarian food took place separately. These extra steps were taken to
20

assure Indian customers of the wholesomeness of both products and their preparation. To
convince Indian customers that the company would not serve beef and would respect the
culinary habits of its clientele, McDonalds printed brochures explaining all these steps and
took customers on kitchen tours.
McDonalds positioned itself as a family restaurant in India . The average price of a Combo
meal, which included burger, fries and Coke, varied from Rs 76 for a vegetarian meal to Rs
88 for a Maharaja Mac meal. This could be compared with KFC meal prices at Rs 59 (Crispy
Burger, regular fries and large Pepsi) and Rs 79 (KFC Chicken, Colonel Burger and regular
Pepsi). McDonalds Happy Meal, which included a complimentary toy, was priced at Rs 46.
The prices in India were lower than in Sri Lanka or Pakistan, and even the price of the
Maharaja Mac was 50 per cent less than an equivalent product in the United States. To fight
its premium image among the public, the company undertook selective price cutting and ran
some periodic promotions. In February 1999, the company was offering economeals for as
low as Rs 29. The company reduced the price of vegetable nuggets from Rs 29 to Rs 19 and
that of its soft-serve ice-cream cone from Rs 16 to Rs 7. Apparently, this still afforded
McDonalds a healthy margin (40 per cent for cones). As Vikram Bakshi, explained, I will
never become unaffordable, as I will not then be able to build up volumes. The lower price
could be attributed to two factors: the pricing strategies of MNC rivals as well as mid-range
local restaurants, and the development of a local (low-cost) supply chain. McDonalds pricing
strategies, as well as special promotions, were influenced by rivals. In February 1999, several
competitors were running special promotions, with KFC offering a meal inclusive of chicken,
rice and gravy for Rs 39. For Rs 350, Pizza Hut was offering a whole family meal, including
two medium pizzas, bread and Pepsi. Wimpys was offering mega meals at Rs 35. A typical
vegetarian set meal, or thali (which included Indian breads, rice, vegetables and yogurt) at
a mid-range restaurant cost around Rs 50, which was considerably lower than a McDonalds
meal. Some analysts believed that that by introducing loss leaders (for example, cones),
McDonalds wanted to highlight good value for all its products. Whether customers attracted
by special promotions pay repeat visits to McDonalds remains to be seen.
In October 2000, the company introduced two new Indianised products to its menu the
Chicken McGrill and the Veg Pizza McPuff. At that point in time, 75 per cent of the menu in
India was unique that is, different from the rest of the McDonalds system. The Chicken
McGrill had a grilled chicken patty topped with onions and mint sauce, to give it an Indian
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flavour. The Veg Pizza was a takeoff on the popular Indian samosa (potato-based curry puff)
with differences in shape (rectangular) and stuffing (capsicum, onions and Mozarella cheese
with tomato sauce). In keeping with the low pricing strategy in India, these items were priced
at Rs 25 and Rs 16, respectively. With its value pricing and localised menu, McDonalds had
attracted some loyal customers. One such customer said, A normal kebab, with all the
trimmings, at a regular restaurant would cost more than Rs 25 and if the new McGrill is
giving us a similar satisfaction with its mint chutney (sauce), then wed rather eat in a lively
McDonalds outlet than sitting in a cramped car on the road.
Some elements of the promotional strategy remained the same as in other parts of the world.
One instance of this included the emphasis on attracting children. A Happy Meal film was
consistently shown on the Cartoon Network and the Zee (a local channel) Disney Hour.
McDonalds also teamed up with Delhi Traffic Police and the Delhi Fire Service to highlight
safety issues, again trying to create goodwill among schoolchildren. In October 1999, in
conjunction with The Walt Disney Company and UNESCO, McDonalds launched a search
for Millennium Dreamers. The program would bring together 2,000 young people from
around the globe who had made a positive and significant impact on their communities.
Based on the number of its outlets, India was allocated two representatives. By June 2000, the
company had started rolling out its first national campaign, as it was expanding beyond
Mumbai and New Delhi. The campaign, budgeted at Rs 100 million, was expected to
highlight (in phased order) the brand (the experience that there is something special about
McDonalds), food quality and variety. The company also ran special promotions during
festivals, and vegetarian days, and was even developing garlicfree sauces to bring in hardcore vegetarian traffic. In terms of the selection of cities, McDonalds followed the same
strategy in India as in the rest of the world. Its initial focus on Mumbai and Delhi was driven
by the following factors: they were the two largest cities in India; their citizens enjoyed
relatively high income levels compared to the rest of the country; and they were exposed to
foreign food and culture. After establishing a presence in the leading cities, McDonalds then
moved to smaller satellite towns near the metropolitan cities (for example, from Delhi to
Gurgaon and Noida, both suburbs of Delhi, and from Mumbai to Pune). McDonalds often
found that there were positive spillover effects, in terms of its reputation, from the
metropolitan cities to the satellite towns. In Jaipur, the company was hoping to attract foreign
tourists.

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Management Information System (MIS)

What is Management Information System (MIS)
A Management Information System is an integrated user-machine system, for providing
information, to support the operations, management, analysis & decision-making functions in
an organization. The System utilizes computer hardware & software, manual procedures,
models for analysis, planning, control & decision making and a database.
MIS provides information to the users in the form of reports and output from simulations by
mathematical models. The report and model output can be provided in a tabular or graphic
form.

Characteristics of Management Information System (MIS)

The Basic characteristics of an effective Management Information System are as follows:
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1. Management-oriented: The basic objective of MIS is to provide information support

to the management in the organization for decision making. So an effective MIS
should start its journey from appraisal of management needs, mission and goal of the
business organization. It may be individual or collective goals of an organization. The
MIS is such that it serves all the levels of management in an organization i.e. top,
middle and lower level.
2. Management directed: When MIS is management-oriented, it should be directed
by the management because it is the management who tells their needs and
requirements more effectively than anybody else. Manager should guide the MIS
professionals not only at the stage of planning but also on development, review and
implementation stages so that effective system should be the end product of the whole
exercise in making an effective MIS.
3. Integrated: It means a comprehensive or complete view of all the sub systems in the
organization of a company. Development of information must be integrated so that all
the operational and functional information sub systems should be worked together as
a single entity. This integration is necessary because it leads to retrieval of
more meaningful and useful information.
4. Common data flows: The integration of different sub systems will lead to a common
data flow which will further help in avoiding duplicity and redundancy in data
collection, storage and processing. For example, the customer orders are the basis
for many activities in an organization viz. billing, sales for cashing, etc. Data is
collected by a system analyst from its original source only one time. Then he utilizes
the data with minimum number of processing procedures and uses the information for
production output documents and reports in small numbers and eliminates the
undesirable data. This will lead to elimination of duplication that simplify the
operations and produce an efficient information system.
5. Heavy planning-element: The preparation of MIS is not a one or two day exercise. It
usually takes 3 to 5 years and sometimes a much longer period. So the system expert
has to keep 2 things in mind one is that he has to keep future objectives as well as
the firms information well in advance and also he has to keep in mind that his MIS
will not be obsolete before it gets into action.

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6. Sub System concept: When a problem is seen in 2 sub parts, then the better solution
to the problem is possible. Although MIS is viewed as a single entity but for its
effective use, it should be broken down in small parts or subsystems so that more
attention and insight is paid to each sub system. Priorities will be set and phase of
implementation will be made easy. While making or breaking down the whole MIS
into subsystems, it should be kept in mind that the subsystems should be easily
manageable.
7. Common database: This is the basic feature of MIS to achieve the objective of using
MIS in business organizations. It avoids duplication of files and storage which leads
to reduction in costs. Common database means a Super file or Master file which
consolidates and integrates data records formerly stored in many separate data files.
The organization of the database allows it to be accessed by each subsystem and
thus ,eliminates the necessity of duplication in data storage, updating, deletion and
protection.
8. Computerized: MIS can be used without a computer. But the use of computers
increases the effectiveness and the efficiency of the system. The queries can be
handled more quickly and efficiently with the computerized MIS. The other benefits
are accuracy, storage capacity and timely information.
9. User friendly/Flexibility: An MIS should be flexible i.e. there should be room
for further modification because the MIS takes much time in preparation and
our environment is dynamic in nature.MIS should be such that it should be used
independently by the end user so that they do not depend on the experts.
10. Information as a resource: Information is the major ingredient of any MIS. So, an
MIS should be treated as a resource and managed properly.

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Management Information System (MIS) of Mc Donalds

There are many types of information systems used in McDonalds such as :
1. Transaction Processing System (TPS)
First transaction happens when two people make an exchange, and collecting data
about it called transaction processing, so transaction processing is collecting, storing,
modifying, and retrieving the transactions of an organization. Transaction system is
important to answer routine questions, and it helps to conduct business such as
payroll, employee record keeping or paying an employee. It's important to store the
data of the transaction save and protected because transaction generally involves an
exchange of money which is critical to any organization.
How Transaction Processing System is implementing in McDonalds?
McDonalds everyday sells a huge amount of hamburgers ,so McDonalds should order
raw material from its supplier , each time McDonalds place an order with its supplier ,
a transaction happens , and the transaction processing system records the relevant
information such as supplier name , address , the quality of the items purchased and
finally the invoice amount.
2. Decision support system (DSS)
Decision support system is used to model data and make quality decision based on the
data , making the right decision is usually based on the quality of the data and one's
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ability to analyze the data , Decision Support Systems are usually computer
applications with a human component. They can sift through large amounts of data
and pick between the many choices and supports the non routine decision.
How decision support system implemented in McDonalds?
At first McDonalds began as a small restaurant, selling foods to customers , the
business expanded slowly ,then McDonalds analyze the market well to come with
opportunity, as we know we live in the time of technology , so McDonalds thought of
providing wireless services , so the company gather information about the customer
usage of wireless services , length of stay and sales level , then the decision support
system analyze the data to come up with the decision of providing wireless service in
their restaurant.
3. Made for you system
In this system McDonalds use modern technology to assist McDonalds operation,
In this system when a customer places an order , the sandwich item will immediately
appears in the computer monitor in the kitchen and a tone sound to alert the kitchen
staff .
4. POS system " Scale of Point system "
McDonalds is very busy restaurant because many customers goes there , the first
priority for McDonalds is to deliver best restaurant experience for the customers , for
that McDonalds used POS system " Point of scale system " to ensure fast and accurate
order , because this system is used to speed the business process, it can track massive
amounts of data in seconds., With these systems, each order is instantly transmitted to
several workstations throughout the facility, The cashier instantly knows what
payment is due. The kitchen knows what orders are coming up, and how long a
customer has been waiting.
5. Hyperactive Bob system
McDonalds implemented this system to let their employees when they are about to be
busy , this system used computers and rooftop cameras to monitor traffic entering a
restaurant's parking lot and drive-thru.

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Technology platform for IMS strategy

Keeping in view the dynamic nature of business and need of satisfying the
requirement of information at any time anywhere, we have suggestion to chooses
following technology platform Enterprise management System.
Operating system platform: NT4.0, UNIX.
Network: Internet/Internal/Extranet/LAN.
Application Technology: Client/Server, Web Enabled applications.
Application Solution: Oracle 8 I, Oracle Financials, Oracle Application-11 i.
Front End: VB,IIS 4.0
Back End: Database server, Application server, Microsoft transaction server,
web server.
Security: Firewall servers and Proxy server.
Use ERP

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Conclusion
McDonalds continuous product innovation and customer satisfaction through greater
customer reach. In order to sustain in a very competitive market McDonalds has to
continuously think of bringing in new concepts into all its operations especially in marketing.
McDonalds had to bring in something that would help in long sustainability and that
unrivaled position on the market as a food trailer. The result of a spontaneous thought led
to the introduction of breakfast outlets and a chance encounter with a technology specialist
ended up with online booking orders and birthday parties and signature outlets. These are
signature products of McDonalds and this will in the long run help McDonalds to improve it
already ace services with better customer service and great shopping experience. The success
of McDonalds in India could be measured by its continuous growth in Indian fast-food
market with 210 branches across India
The task is mammoth as McDonalds tries to keep up in the race for a piece of the great
Indian pie . As per Forbes , McDonalds India operations contribute 30 % to their sales which
is a considerable share. It might become imperative to create a Point of Difference to fight it
out in the Indian market as all fast food brands have modelled themselves on local flavours
now , the latest being KFC with its Streetwise menu. While McDonalds does have the
edge with its excellent supply chain and distribution network the customer ultimately does
become the king with low brand loyalty in this category being the generalization . The
rebranding effort on their part seeks to bring in a new flavour to their brand offering but what
remains to be seen is whether they are still able to strike a chord with the customer.

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Bibliography
http://www.assignmentpoint.com/business/mcdonalds-entry-strategies-in-india.html
http://www.mi.rei.ase.ro/Site%20MI/AI/Studiu%20de%20caz%204_McDonald's.pdf
www.mcdonalds.com
http://mcdonaldsmis.blogspot.in/p/mcdonalds-is_04.html
http://www.ijsrp.org/research-paper-0912/ijsrp-p0935.pdf

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Acknowledgement
I owe a great many thanks to many people who helped and supported me during this Project.
My deepest thanks to Lecturer, Mr. Nilesh Rathod , the Guide of the project for guiding and
correcting various documents of mine with attention and care. She has taken pain to go
through the project and make necessary correction as and when needed.
I would also thank my Institution and my faculty members without whom this project would
have been a distant reality. I also extend my heartfelt thanks to my family and well wishers.

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Methodology
The data used in this project has been collected from secondary sources. There are those data
which have already been collected by someone else and have panel through statistical power.
When the researcher utilizes secondary data, he has to look into various sources from where
he can obtain data usually published data is available in:

Technical and trade journals.

Books, Magazines & newspapers.

Public records & statistics.

Historical Documents and other resources.

Website journals, etc.

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