In what is its most significant shift in strategy since it entered the country 11 years ago, McDonald’s India is altering its volumes-led strategy to focus on profitability and value growth, following a diktat from its global parent. Having broken even in the domestic market last year, Big Mac India is looking at upgrading consumers through a series of initiatives all of which are in the process of being fine-tuned and rolled out. These will include introducing high-priced, high-margin products, adopting differential pricing depending on geographical location of restaurants and setting up additional outlets in upmarket multiplexes, food courts and high-street malls, among other measures.
With growth rates of 30%, India and China are now among the fastest growing countries in Big Mac’s global footprint. The change in strategy stems from the fact that now that the global major has established itself as a volumes player in countries like India, it should begin driving profits.
Speaking to ET, McDonald’s (North) India MD Vikram Bakshi said: “All along, we have based our strategy on building volumes, but driving profitability is very much the focus now. We are tweaking our strategy so that we are able to achieve both — improving profitability and adding to volumes. The idea is to capture a bigger spend from the customer.”
He said the fast food major would achieve this through better asset management and efficient unit economics. For example, restaurant formats such as drive-through’s, kiosks and delivery models would be set up and tweaked to suit different geographical locations.
complete article| source ET>
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