Thursday, September 28, 2006

Learning by doing - someone else's doing!

The weekend gone by was rather interesting. I went for a talk by Amit Jatia. Amit used to run his family business before he started HardCastle Restaurants more than 10 years ago. But that’s not why he’s famous. He’s famous because he’s McDonald’s JV partner in India. (And why was I interested? This is why.)

The talk was organized by the Mumbai chapter of The Indus Entreprenuers (TiE) on Saturday morning at the McDonald’s outlet in Phoenix Mills. He spoke about several aspects of McDonald’s India – about how he got selected as JV partner, how their first few years were tough, how he learnt hard lessons along the way and how they’re looking at growing their business exponentially now, from 110 stores in 10 years to doubling their store reach in the next two years! It was quite an interesting talk, but there were three points he made that were of personal interest.

The first was that there was a yawning space for an Indian fast food chain. Amit believed that there was a huge opportunity in Indian fast food that had only been fulfilled to a very small extent by chains like Jumbo King. He also believed that Indian fast food would not compete directly with McDonald’s and would therefore be in a completely different space. I’m not so sure about that assertion – if fast food has to be successful, they will fight for the same customers’ wallets. However, as eating out evolves and the size of the pie increases, there might be more than enough to go around for all the players in the space. Even if they compete for the same wallets.

The second was that the supply chains are not as bad as they were 10 years ago. Amit recalled how there was no quality iceberg lettuce in the market when McDonald’s entered and how the supply chain for this had to be created all the way back to the farmer. It took McDonald’s a significant amount of time and energy to get their supply chains in place. Supply chains are developed enough now that consistent supply of fresh vegetables is not the issue it used to be - there are suppliers like Radhakrishna Foodland that can get food from farmer to doorstep consistently.

The third was the tactical elements that will make the chain successful, and the tough part of making this happen is all about getting these elements right

  • Product line – I still haven’t figured out the right product mix that will drive customers into my restaurants. I need a set of products that are easy to make, take the least time, and that’s pan-Indian in its appeal – any ideas?
  • Operations – Operations is the key to success in fast food operations, and Amit re-iterated its importance by saying that it was the one thing he really needed to get right. The two key insights he offered were to get the right metrics in place and to standardize processes.
  • People –How do you hire, train and motivate a group of people, who move easily and need to be replaced at a phenomenal rate? Amit had some interesting ideas on this – rewarding good performers by giving them the opportunity to grow with the company was the most important lever that he had. McDonald’s, of course, has deep pockets, and enough opportunities – can an entrepreneur do it as well, I wonder.

The talk convinced me that there is an opportunity to play this game. I know who can do the store layout and who can (potentially) figure out the operations, but I need to figure out so much more - just thinking about it leaves me both excited and apprehensive. Any and all ideas are welcome - I'm looking for as many as I can get!

8 Comments:

Blogger nothing spectacular said...

go for it, buddy!! and consider me as well - i can do some (financial) modelling for you :-) and can also be taster-in-chief!!

9:46 PM  
Blogger The Invizible Man said...

done deal! especially the taster job... i might be the cook, so watch out :))

10:36 AM  
Blogger impulsar said...

Thanks for sharing the talk. I seriously feel there is huge potential in the Foods\drinks business.

10:50 PM  
Blogger impulsar said...

Are you looking to start out soon? and in what segment (premium/mid/daily food).

10:51 PM  
Blogger The Invizible Man said...

thanks for your kind words, impulsar :)

am debating starting out soon - it will mean giving up cushiness and taking on risk, so i'm not sure yet... if i do start, though, it will be in the mid/daily food segment.

7:46 PM  
Anonymous Anonymous said...

great but you should mot think on the same lines as that of you partner mc donalds,if you give the right taste for bombay you boom or

4:30 PM  
Blogger swahel said...

hey....its quiet an interesting idea...but according to me the product line is going to be most difficult...i remember when we were in college a few years back...me.my friends had given this a thought but we got stuck with the product line...and we didnt want to look like an indianised version of mcd, can you give me a rough idea on how your product line would look like?

7:13 PM  
Blogger Ashutosh said...

Yes may be a good idea but to execute it is a diffrent ball game.First and foremost is the product list.Then comes a conistency in taste and quality [ macdonald has done huge resurch on small things like potato chips spending millions of dollors]At the end will it satisfy indian taste who are use to eating substandard indian food which costs very less.

2:21 PM  

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