Amit Jatia and McDonald's stuck by each other and adapted to value-conscious, vegetarian India. After 15 meagre years, they're finally feasting
America changed Amit Jatia. When he went to the University of Southern California (USC) in 1984 as a reserved 17-year-old, he discovered a culture of learning that clicked with him: The freedom to choose classes and theory applied to real world examples. He was the youngest in his fraternity, Alpha Kappa Psi (a business frat known for its networking and seminars), but that didn’t stop him finishing his four-year course in three. When he came back to India and joined his family’s BL Jatia Group, the American connection continued.
In 1987, after he graduated from USC, the family had just established a joint venture with an American company for specialty lubricants. Asked whether he wanted to live off-shore and run the trading business or return and work on this, he made it clear it was always about coming to India and manufacturing. “I couldn’t think of anything but manufacturing!” he says. “When I understood the product lines in the lubricants business, I said nobody in India is going to pay for safety!” says Jatia.
He got the cost structure right by 2002. The goal was for every new McDonald’s to make money on its own account. McDonald’s did this by localising the fabrication and equipment, bringing down building cost by 50 percent. According to their research, in 2003, of 100 meals that people ate in a month, only three were eaten out. That’s when the Rs 20 menu came in. The objective: Take the three meals to five, and seven and 10. Jatia says that’s when we introduced ‘value’. “Once we got the Happy Price Menu in, the frequency in Mumbai went from three to eight,” he says.
(This story appears in the 21 March, 2014 issue of Forbes India. To visit our Archives, click here.)