MCDONALDS 1.pptx mc donalds is one of the famous o

mcdonalds

1. What were the pitfalls of the initial attempts by Mc Donalds India to create its French fry supply chain? While India was third largest producer of potato in the world, less than 1% of the potatoes were process grade. Mc Donalds had to create backward linkages all the way to the farm level, hence spending over $100mn even before the stores were opened, thus having to absorb all the supply chain cost. In order to supply French fries, Mc Donalds initially created joint venture between international French fry supplier Lamb Weston and India based Taral foods. The joint venture's agricultural techniques were unable to produce potatoes of right size and containing ideal amount of solids, which produced oily and limp fries. To avoid the delay in opening of store, Mc Donald's realized importing frozen fries was the best option for the time being.

2. But problems continued as the process for obtaining an import license was complex and time consuming. After 6 months, the Indian government allowed the imports, but the import quantity was restricted up to 800 metric tonnes  of French fries. Import  duties were very high - 56% Lead time of import from US was very high - 60days. Seeing the restrictions Mc Donald's invited another international supplier, McCain so that it can also import 800 metric tonnes of frozen fries. Factors which enabled McCain's success: McCain India's first employee was an agronomist and its second employee was an supply chain manager thus giving them a better understanding of agronomy. Mccain had to bring in potato germplasam (a collection of genetic resources that could be used to grow suitable potatoes locally)

3. Mccain learned that cultivating potato seeds in high elevations was ideal, so it's instituted a Shepody potato seed multiplication valley in 13000 – foot high Spiti valley Vista food's excess capacity helped McCain with enough potato volume to build up small businesses with local farmers and build their trust. The patty supplier Vista's excess capacity was  utilised , McCain was able to test the Indian market with small- scale production, and McDonald's found a route for developing local supplies of French fries making it a win-win situation for all.

4. Under McCain management, the MacFry supply chain has been effective. what are the risks of this model? How can McDonald's address the competitive threats from other firms moving in and capitalizing on the large investments of time and money that McDonalds has made? Natural calamities like droughts, hailstorms or improper rainfall can destroy the crops. Risks of spoilage of raw potatoes and processed frozen fries while transit. Risks involving proper storage of the frozen fries. Improper forecast of supplies requirement . Indian farmers still rely predominantly on monsoon for irrigation. 

5. What are the options McDonald's India can pursue to meet the huge growth in  demand that has been predicted in India? To build a local supply chain in India, in order to increase the supply growth from the farmers through different suppliers. The improved supply chain process will enable McDonald's to utilize the potatoes by farmers to a greater extent .McDonald's should encourage farmers to store the potatoes for a longer period of time.