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McDonald's in India: how far should multinational companies go in adapting to local markets?

Published on April 30, 2019 Originally recorded 2014   7 min
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So here let's take an interesting example of McDonald's in India. So McDonald's as we know the core item is beef-based hamburger. Now think about the market for hamburgers in India is 1.2 billion people. The market for hamburgers is very large or let say the market for fast foods is very large. But then you change, you know, add two words and say, "Well, not the market for hamburgers but what about beef-based hamburger". Now you run into serious trouble if you have been to India. I'm sure you have seen cows sharing the road with the cars and trucks and human beings. And you say, "Why does that take place?" Well the reason it takes places is because India revers cows.
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So what does McDonald's do? Of course, you know, they can say, "Well, the country is not ready for us so we are not ready for India," but that would be rather silly, right? So what do you do? Your core product is beef-based hamburger. So you can say, "Well, you know, you have to adapt your product maybe you don't sell hamburger maybe you sell only chicken burger, so you sell vegetable burgers". You know... Look at the US, doesn't McDonalds sell chicken burgers and vegetable burgers in the US? So therefore what's wrong with selling those in India. So that's one way. So you're saying yes be open to local adaptation. But then of course, you know, you start talking about food. I mean Indians like naan bread, they like chicken curry, they like samosa. Should McDonald's therefore be offering naan bread and samosa and chicken curry on tenderly chicken? In their outlets, you see here the challenge of deciding, you know, how much you should adapt. Sometimes you should go the whole hog. Sometimes you should say, "No we should not adapt at all!" You know, you look at an iPhone. An iPhone in China is identical to an iPhone in the US or an iPhone in India because there's the apps where the adaptation takes place and what Apple says is, "Hey brother you buy the apps that you want." "That's so, you know, we outsource that job to you." But McDonald's cannot say, "Outsource the cooking to yourself to the customer." McDonald's has to cook the food. So, how much should McDonald's adapt. So here my main point is that how much you should adapt. There is no universal answer that applies to all companies, to all industries or to all countries. The answers vary all over the place. They vary all over the place in space, but they vary all over the place in time meaning that the degree of optimal adaptation three years from now could be quite different from the optimal adaptation today. So, number one you have to be pragmatic. To be open to learning from the market. Let the market tell you. Number one, number two is adaptation.
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McDonald's in India: how far should multinational companies go in adapting to local markets?

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