International Business Ppt

Emphasis on Local Management 
McDonald’s has given the adage of “think global, act local” a concrete shape in India. The company’slocalization strategy is clearly manifest in the critical area of management. McDonald’s decided to set uptwo joint ventures on a 50:50 basis with two local entrepreneurs in Mumbai and Delhi. In Mumbai, Amit Jatia’s company, Hardcastle Restaurants Private Limited, was selected to own and manageMcDonald’s restaurants in the western region. In Delhi, Vikram Bakshi’s Connaught Plaza RestaurantsPrivate Limited was chosen to own and manage McDonald’s restaurants in the northern region. BothVikram Bakshi and Amit Jatia are responsible for running McDonald’s in India. Vikram Bakshi hasextensive background in real estate development in Delhi, while Amit Jatia, a vegetarian, has a chemi-cals and textile business background in Mumbai. It was not their backgrounds, however, that won theconfidence of the Big Mac’s management. Rather, it was their business plan emphasizing India-centricmanagement strategies and their easy access to bureaucracy so critical to effective government relationsbuilding.

“Politically Correct” Strategy 
In the beginning, McDonald’s was faced with two challenges of the Indian market: (1) how to avoidhurting religious sensibilities of Indian consumers; and (2) how to avoid political confrontation withIndian government and political activists. McDonald’s managers were well aware of the fact that politi-cal activists can create trouble for foreign-based fast food chains, as demonstrated in the case of politi-cally organized agitation against KFC in Bangalore in January 1996. With two local managing directors(Bakshi and Jatia) playing critical roles, McDonald’s took a series of politically correct strategies to deal with the initial challenges of the Indian market. Since India’s majority Hindus (80% of India’s popula-tion) revere cows as sacred and 150 million of Indian Muslims do not eat pork, beef and pork have beena “complete...