Mcdonalds India. Porters Five Forces Model and Consumer Behaviour Analysis

Authors Avatar by manoj007 (student)

PGPM 2012-14, Term I        

Marketing Strategy Analysis – McDonald’s India

Submitted by- Group 5, Section C, PGPM 2012-14

12P133        -        Apoorva Abhay Dave        

12P145        -        Lucky Sharma                

12P146        -        Manav Gupta                

12P147        -        Manoj Kapoor                

12P149        -        Mayank Bathla                

12P150        -        Mayank Sharma                

        

EXECUTIVE SUMMARY

Purpose of the study: This report analyses the marketing strategy and position of McDonald’s India. For this purpose, SWOT analysis, PEST analysis, Porter’s five forces analysis and consumer behaviour analysis of McDonald’s India was done. The report also contains suggestions and foresights for McDonald’s India for improvement in their marketing strategy.

Background scenario: As per estimates there are approximately 500,000 restaurants in India in the organized sector. Sales by Indian food service companies totalled Rs 350 billion in 2002. The organized sector is responsible for approximately Rs 20 billion worth of sales. Indian consumers spend only 2.4% of their food expenditure in hotels and restaurants (including on premises and take-out sales). In particular, Merrill Lynch estimates a growth in urban consumption at potentially 20% per annum in nominal terms (16% in real terms) for at least the next few years. In addition, higher disposable incomes among consumers particularly in the top 25 cities and the trend towards eating out are combining with growth in organized retailing to fuel growth in the foodservice sector. McDonald’s was one of the early entrants in this market and currently has over 250 restaurants across the country.

SWOT Analysis: McDonald’s major strengths are its first mover advantage and innovative and adaptive work model and focus on customers’ requirements. The main weakness of McDonald’s is its less variety of offerings which are not considered healthy. McDonald’s has a number of opportunities such as to widen its distribution network, introduction of healthier products and more variety of offerings.  And the main threats to McDonald’s are the competition and changing market trend of health consciousness.

PEST Analysis: The political environment for McDonald’s is favourable with no restrictions on investment and moderate levels of taxes applicable. The economic factors like high growth and rising disposable income of consumers also favour McDonald’s scope of growth. While the social factors are positive when the age composition and standard of living are considered but the changing societal concerns like health consciousness and vegetarianism are negative for McDonald’s. And the technological advancements also favour growth of McDonald’s.

Porter’s Five Forces Model: The model suggests that for McDonald’s the competition is very high due to high threat of substitutes and new entrants. Also, the buyers have a lot of power in this market while suppliers have very less power owing to large size of fast-food chains.

Customer behaviour analysed through survey indicated that McDonald’s have good brand recognition but due to easy available substitutes and competition the customers are not loyal towards any one brand. McDonald’s has been successful in positioning itself in the market as per its philosophies of quality, service, cleanliness and value for money and customers are able to relate to these.

McDonald’s has positioned itself as a fast-food restaurant offering value for money food for families and youngsters and is a place to celebrate happiness and togetherness. This strategy is visible from its marketing techniques and advertisements.

But it still has a long way to go with a lot of opportunities like opening more outlets, bringing out more varieties for same products and coming out with new products and innovating and adapting more to Indian culture.


Table of Contents

Topic                                                                                                Page

Section – 1: SWOT and PEST analysis of McDonald’s India                ……………….        5-14

        SWOT analysis                ………………………………………………………………..        7

        PEST analysis                ………………………………………………………………..        11

Section – 2: Porter’s five forces model and consumer

behaviour analysis        of McDonald’s India        ..……………………….        15-24

        Porter’s five forces model        ……………………………………………………….        16

        Consumer behaviour analysis        ……………………………………………..        19

Join now!

Section – 3: Positioning strategy of McDonald’s India

and suggestions and foresights        ……………………………………………..        25-29

Conclusion                ……………………………………………………………………………………..        30

References                ……………………………………………………………………………………..        32

Exhibit-1                        ……………………………………………………………………………………..        33-35


SECTION – 1

SWOT Analysis

and

PEST Analysis

Count of words: 1197


Section – 1

About the company:  

McDonald's, world's leading food service retailer with more than 33,000 restaurants in 118 countries serving more than 67 million customers each day, opened its first restaurant in 1996 in India.  In India, it works on franchise model and is managed by Hardcastle Restaurants Pvt ...

This is a preview of the whole essay