Question

Critically discuss the challenges facing McDonalds and Yum in India and whether the

models will need to be further changed if economic growth slows.

Answer 1

There is a food rivalry occurred in Indian economy from last 5 years. Indian economy having a very low demand towards Yum and McDonalds. Only one percent of Yum’s global trade from India. China is one of the largest markets of Yum’s. There is a high level of competition between these industries, because of the emergence of mobile food ordering apps. From largest cities, people order food from home and they don’t want to go out to take food from these shops. This type of challenges affects the demand and supply of Yum. From this 20th century, people are more attracted towards the fast food and it’s over consumption. There are several fast food companies were emerged with the changing behaviour of consumers towards thus type of goods. This higher level of competition and emergence of low cost firms leads to reduction of restaurants by Yum. McDonalds also faced this same situation. Increasing young generation leads the increasing demand towards their products. But the Indian culture considered these non vegetarian foods like beef as a taboo. This affects the production and demand for McDonald’s products. Their products are high priced and only above average or high income people were the major consumers.
These two firms having a good name in the industry, so they can’t distribute their products in low price. This affects their production in a competitive firm. So gradually this type of firms will be get back from the market. This will interrupted their future demand in the economy. Comparing to other countries, there is a low level of demand towards this type of high cost foods in India. Most of the Indian people wish to get good quality products at low cost. So the same kind of goods gets from other restaurants at the same time. This will leads to the low level of influence by them in the economy. The traditional economic models should be changed and managed on the basis of the current situation of the economy. There should be more empirical data and methods should be used during the formation of the theory. According to the future expectation, low cost and high quality firms get power in the economy in every field.