“Challenges faced by American fast food franchise while opening outlets in India"
The study has introduced about the 5 related topics about Fast Food centres of US into the market of India. The challenges have been well described in this article through annotated bibliography. An annotated bibliography is a list of citation which is related with the articles, books and documents. These details focus on evaluation of contents and summarised the purpose of the article. Different authors have researched about the topic and implemented in the article according to their views.
Article 1: Contemplations for Opening the First McDonald’s Restaurant Franchise in the IT Capital of India’s Bangalore. International Journal of Marketing Practices, 3(2), 33-46.
Shah, and Mujtaba, (2016), has Harley about the new business of US into the market of India. McDonalds being one of the famous franchise in the entire world the brand faced lot of difficulties for getting the most visited place in India as India has 29 states. Organisation has focused on the multicultural religion population which consists 80% Hindus and 13% Muslim for which Mc downloads had to cut pork and beef products as fork is forbidden in Muslim and beef is forbidden in in Hindus. The executive of public relation and marketing strategy of the organisation face a lot of challenges as the organisation have to produce non veg as well as vegetarian products in India. The varieties food products have increased the cost and budget at time of planning the price for the menu. On the same time the organisation has also faced ever changing business environment in India and with the competition of fast food. The organisation has also faced problem for taxes to the government and the land required to setup the organisation. The laws and regulations for the organisation were passed late where through the union government of India and thus after 3 months the organisation successfully set the business in Bangalore (Shah, & Mujtaba, 2016). Another issue the organisation has faced about encountering in both political and ethical sectors which in another term is the high demand brides from business in return for the rights to operate in the country or in the location. As the organisation does not support this protocol thus, it follows the foreign corrupt practice act which helped the organisation about illegal documents of bribery from the foreign government official to obtain and maintain the business. Lastly with all the issues, the organisation has created outsourcing services to the Western world by providing opportunities in India.
Article 2: Starbucks Enters India:
Starbucks in US is one of the famous Cafe with $22.7 billion revenue till 2018. The organisation has 20,000 stores globally in 65 countries and has entered India with Tata coffee in 50 50 joint venture. India has a growing population of more than 1 billion people and the organisation decided to enter India and expand the business for better profit. According to Berger, & Blake, et al. 2016, the trend of Internet and successful Cafe culture in India has helped the Starbucks enter the market easily. However, the organisation has faced the issue of price and location to set up the business. The Indian market is already price sensitive and high initial price could have laid down the customers. Inflation was another hurdle that drops in the purchasing power of the consumer and can result being priced out of the market. At that point of time the inflation was 10% however after outsourcing from US the inflation came down to 8% which helped Starbuck to remove the issue of inflation and could fix the price easily. Another issue Starbucks has faced about several competition and proper location of being promoting of the organisation. The first Tata Starbucks was successfully opened in Mumbai after a seed amount of $80 million and after a long hardship the organisation expanded the business in India with high tech companies in Bengaluru, Chennai and Delhi (Berger, & Blake, 2016). After settling the amount the organisation has made the compliance with policy limited ownership less than 51% in India.
Article 3:Culture and crisis communication:
The article has focus on the theoretical perspective of the crisis communication that has faced a lot of problem for Nestle to introduce Maggie in India. The crisis in communication of Nestle linked with the political and economic system. Nestle was one of the oldest franchise in India by US. The legal system and judicial system has created a lot of challenges for the potential legal liability for the organisation. The legal system in India has delayed the cases for launch in the products in the Market of India and setting up the factory. The organisation has also faced major food crisis in 2015, after a government laboratory found monosodium glutamate (MSG) in one of its flagship products in India. This has created huge problem for the organisation and decreased the production miserably. After the serious court battle ensured in June 2015, Nestle filed a suit against FSSAI in Bombay High Court of resuming manufacturing Maggi for export (Dhanesh, & Sriramesh, 2018). After the legal battle in 2016, Nestle received an order for settling the Maggie enterprise again in India. This has created a lot of problem in Nestle with 50% loss in the stakeholder. The thesis of the crisis communication literature have influence the integrating culture in form of political, legal and economic factors in India. The crisis response strategies respond to the traditional corporate culture and the demands of the environment leading which remove the challenges faced by the organisation in the later part. In that part of the time the organisation face a lot of challenges in terms of reputation and the bottom line. This article was used because of the difficulties that the steady food product has faced which acts as a fast food in different restaurants as well as in the home.
Article 4: Restaurant franchising:
Foreign direct investment is one of the development strategy for the developing Nation like India. America is one of the developed country in the world and has focused on setting up different franchises of food outlets in India. The study has focused on the challenges and threats of FDI in the multi brand retail in India especially for food. One of the most common factor that each and every fast for centre of US face to set franchise in India is capital and government policies. The last foreign players in the market Supermarket with a huge bribe (Khan, 2014). The approval requirements from state government have few limits for which many organisation cannot operate in India freely as there are lot of hassles. Demographic and economic profile have also affected the retail outlets where the condition of bargaining of every food items similar like shopping is reflected in the modern outlets and linked with the traditional outlets. In regards to this, the Food World Health operated over 60 US franchise which are present in 200 locations in India. The eliminating of exploitative Agro processing and marketing and Logistic department has also been affected by the backend infrastructure and has created a multiplier effect for employment and Technology upgradation. Also adopting franchises in India will be difficult for the pricing strategies which is quite different from US to India. The fast food centres of US have to focus on the pricing strategy and according to that it should focus on FDI and implement the outlets in India in their preferred location. This article was highlighted to understand the foreign direct investment issues that have impacted in the different outlets of us in the supermarket of India as well as among the consumers (Khan, 2014).
Article 5: A study of Domino’s pizza with reference to marketing strategies and consumer behaviour in Jammu(Doctoral dissertation, Sf
Domino's Pizza in India has 274 stores in 55 countries focused on the mission of delivering best pizza to the customers. The article has highlighted about the political issues and the environmental issues of Domino's Pizza in entering and setting of franchise in Jammu and Kashmir of India. The social and cultural implication of Indians of not having wave in Hindus and the concept of ahimsa has created a huge problem for Domino's to initially set up in India. However after getting influenced by the Hindu food practices the organisation started focusing on biodegradable products. But the political issues have created problem in the Jammu and Kashmir. Before entering the market the organisation had to deal with all the political requirements which took more than the usual time for setting up a franchise in other parts of India. This has involved in the competitive environment and face a lot of challenges with more opportunities into the market. Another issue the organisation has faced about the price in the heart of Kashmir. In relation to the issues, the study has focused on conducting survey of 100 of respondents were 39 respondents where is satisfied with the price of food items (Kumar, 2018).The overall satisfaction towards the price of food was quite higher and was not at all satisfied. In the later part of the assignment, the percentage of satisfaction level has been highlighted and the most satisfying level of food is vegetarian food of the outlet. Another potential problems faced by the organisation in setting of the franchise is the government taxation policy and large units of MNCs in the absence of group approach.
The above 5 articles about the topic fast food American franchises faced issue in setting of the business into the market of India. The political and environmental issues have been considered in this article however the economy of India is one of the potential growth for exporting and importing the business from US. The annotated bibliography has focused on the extensive research papers as reflected the topic briefly.
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