McDonalds Entry into the Indian Markets - Essay Example

Running Head: WESTERN CULTURE Western Culture This paper attempts to exemplify the cultural modifications that take place when a foreign corporation enters another country’s markets. To study the effects of the aforementioned case, McDonald’s entry into the Indian markets has been taken as an example. A close analysis of the minute technicalities has been attempted in the paper. Western Culture The Oxford dictionary defines culture as “the customs, ideas, and social behavior of a particular people or group”. These customs and belief are not static in nature, and undergo many changes over the course of time. Centuries ago, the culture of a country was modified by wars and invasions. But now cultures are influenced by the corporate scenario in the country. Whenever a corporate giant enters a country’s local markets, it inevitably introduces a few subtle variations in the existing cultural practices. At the same time, the company has to respect local sensibilities and make certain changes in their strategies. A company’s success in the local markets depends immensely on how skillfully they negotiate the culture of that country, and in turn use it to their advantage. Once the company strikes the right balance, there is an intermingling of cultures, which introduces western cultural influences to the already existing local norms. A failure on the part of the company to adapt to local practices can prove to be a business disaster. For instance, the retail giant Wal-Mart was forced to completely shut down its operations in Germany and South Korea, when the local public did not approve of their characteristic working styles. (Schaefer, 2009) It would be beneficial to study an example to facilitate a better understanding of the influences of western culture brought about by corporate giants. McDonald’s, the world’s largest chain of fast food restaurants has more than 30,000 restaurants in nearly a 100 countries and serves approximately 52 million people daily (Bhushan, 2002). McDonald’s was one of the first corporations to pioneer the field of quick service restaurants. It’s franchise in India is owned and managed locally, employing local staff and product suppliers. Hardcastle Restaurants Private Limited owns and manages McDonalds restaurants in the western region of India, while the northern territory restaurants are owned and managed by Vikram Bakshi’s Connaught Plaza Restaurants Private Limited. The first Mc Donald’s outlet was opened in India’s capital, New Delhi in October, 1996 and currently there are a total of 132 restaurants in the whole of India (Bhushan, 2002). Today, one can find McDonald’s outlets even in the smaller towns of India. Thus, over a span of nearly 12 years, McDonald’s has been able to penetrate through the vast population of India. It can be convincingly argued that McDonalds has brought about major changes in the food habits of the people of India. They introduced the whole idea of fast food in India. Burgers and French fries, which were earlier limited to the rich and the elite, were now accessible to the general masses. Even their customised breakfast which includes eggs, toast and sausages, which is a very American meal, has become pretty popular with customers. Thus, it becomes quite evident that McDonald’s introduced several western cultural aspects to Indian through their food items. But more importantly, they introduced a new lifestyle. McDonald’s has now become the favourite eating spot for a number of Indians, be it college going students, or children, or even adults. It has been able to reach people, irrespective of their age, economic background or profession. Though their Indian menu is less extensive as compared to other countries, it has still been able to strike a chord with Indian palate sensibilities. But again, McDonald’s had to make some rather radical changes in their menu to make it conducive to Indian surroundings. For starters, none of their products contained any beef or pork at all. This was in accordance with the religious beliefs of Indians, wherein cow is considered as a sacred animal. So, it is considered a moral sin to kill cows for their beef. Besides this, McDonald’s also introduced an entire range of vegetarian products. This was undertaken to ensure that their menu caters to the majority of Indians, who happen to be vegetarian. Even the cheese used in the burgers is devoid of any animal flesh. Chicken and fish are the only non vegetarian ingredients used. A lot of potatoes and cottage cheese or paneer (which is the most popular form of cheese in India) is used in the vegetarian burgers and wraps. Also, in order to respect religious sentiments, vegetarian and non vegetarian food products are cooked in separate, by separate cooks. Recently, the company has embarked on yet another policy, where they provide Indian spices with their food products. This provides the costumers the choice to make their burgers and fries more spicy and Indian. Thus, we see that any corporate company, no matter how successful it is internationally, has to incorporate several key elements, when entering a new country. Ignoring the cultural demographics can have grave consequences, as in the case of Wal-Mart, which has been mentioned earlier. As they were one of the first western food companies to enter the hitherto unsaturated Indian markets, they found it relatively easier to establish themselves. The only other western presence at that time was of Pizza Hut. But Pizza Hut was highly priced, and thus was not affordable for a majority of Indians. In fact, McDonald’s affordable prices played a key role in their commercial success in India. The cheapest of their burgers costs Rs.20 which is a little less than half a dollar. Over the course of time, McDonalds has become synonymous with an enjoyable meal, which is easy on the pocket. But then like many other corporate success stories, this one has had its share of controversies as well. The biggest of these controversies erupted in May 2001 when a lawsuit was filed against McDonald’s in Seattle, USA. It alleged that the company had used beef extracts too flavour vegetarian French Fries, without informing the customers. This created intense furore and anger amongst their vegetarian customers. The spokesperson for the company later issued a conditional apology, admitting to using beef in their supposedly vegetarian fries. The effects of this controversy were distinctly felt miles away in India, when certain right wing radical Hindu political organisations ransacked several McDonald outlets, protesting the use of beef in their products. As is mentioned earlier, the cow has an almost divine status for the people of India, and thus eating beef is close to blasphemous by religious standards. Enraged by the international accusations, these political parties caused immense economic loss to McDonald’s by damaging their property. They later submitted a memorandum to the Prime Minister demanding closure of all McDonald outlets across India stating that in a country where 80 per cent of the population worships the cow, one cannot go on with this kind of a controversy. (The Hindu, 2001). These groups also claimed that since McDonald’s had publicly admitted guilty in the United States of America, they might be doing the same in India. Beside this incident, there have been several other protests directed towards the company. The quality standard of the food products used have often come under question, as people have raised doubts about the health and nutritional implications of consuming food which is heavily laden with fat and cholesterol. Vandana Shiva, the director of the The Research Foundation for Science, Technology and Natural Resource Policy, also accuses McDonald’s for producing unhealthy food which ultimately leads to obesity and many more ailments. (Real Audio Interview, 2005). The institute’s tirade against the company is also based along the lines of economic exploitation of the workers and defiance labour standards and minimum wages. The antipathy towards McDonald’s seems to be on the rise recently, especially after the beef fries incident. One can perceive a slightly suspicious and distrusting undercurrent running through the masses. That coupled with the health concerns, and the destruction of indigenous food culture is turning into quite a force to be reckoned with. The recent opposition can also be attributed to the growing awareness about health and nutrition. The example of McDonald’s entering the Indian markets, and the subsequent cultural changes, and the problems that those changes lead to, only exemplifies the issue at hand. The corporate giant introduced not only a new cuisine to India, rather it completely revolutionised the eating habits and lifestyle of the average Indian. By doing that, it familiarized Indian to traces of western culture. But this familiarization had its share of controversies and criticisms. Several social organizations rebuked McDonald’s as an alien western agent trying to invade and thus destroy the fabric of Indian culture. The company was also blamed for being insensitive to Indian religious sentiments. Existence of such allegations only proves that the issue of a country’s culture is a rather sensitive one. And thus, every global corporation must make sincere efforts to respect the local culture. It is but inevitable that certain new cultural trends will be introduced, but at the same time, the company must ensure that no offence is carried out to the older ones. References Bhushan, R. (2002, June 27). Big Mac at a Fast Clip. The Business Line Real Audio Interview (2005) Vandana Shiva on McDonals’s, Global Economy and Exploitation. Retrieved 25 February, 2009 from Schaefer, R.T. (2009) Sociology: A brief introduction. New York, NY: McGraw Hill The Hindu. (2001, May 6). Quit India, Sena tells McDonalds. The Hindu Read More