‘Fear was never a part of me’

Font Size

Print

Feedback

Email

Discuss

Related Articles

Gold the most preferred investment

: Amit Jatia, managing director and joint venture partner, McDonald’s India (west & south), loves selling burgers so much that he will not trade it for anything else at any cost. The eldest of three brothers, Jatia cut his teeth in business (family enterprise) producing and selling specialised lubricants. He also has a real estate company West Pioneer Properties Ltd, which he set up in 2005 for putting up malls and hotels in the country. This company was listed on the Alternative Investment Market (AIM) in London in 2007. The first “value mall” called Metro Junction was launched this year in Kalyan, a city 30 miles north-east of Mumbai, in Maharashtra. Plans are afoot to set up more such malls in areas that have a large middle class population. Says Jatia, “Malls in India are perceived to be expensive. That’s because most of them have a tenant mix that includes retailers at different ends of the spectrum. We are targeting only value retailers through our malls. That makes the proposition exciting because there are a lot of consumers who want something like this.”

For all his varied interests though, nothing excites Jatia, who has a degree in business administration from the University of Southern California, Los Angeles, more than his retail venture: McDonald’s. His Hardcastle Restaurants took up responsibility for setting up McDonald’s outlets in the west and south of India following a joint venture with the multinational corporation in 1995. He was all of 28 when he signed up as a partner. But fear and pessimism never filled his mind. He’s an optimist. “My father gave me full freedom when I was involved in the lubricants business earlier. So, fear was never really a part of me. I was confident I could take the new business forward despite being the youngest JV partner at McDonald’s.”

To give the young entrepreneur company was counterpart Vikram Bakshi, a Delhi-based businessman, whose Connaught Plaza Restaurants had a JV going with McDonald’s for the north and east regions. The two have been responsible for India operations along with the parent. Jatia admits that the tasks are many as owners and managers of McDonald’s restaurants. “There has to be consistency in operations. At the same time, the local culture and flavour has to be borne in mind.”

Keeping local tastes in mind is at the heart of the food business. For a uniform-service company like McDonald’s this translates into a menu that comprises vegetarian burgers, absence of beef and pork products, separate production and supply channels for vegetarian and non-vegetarian items, etc. These innovations are unique to India. Combine all of this with the company’s fastidiously clean policy and self-help approach at outlets— something it is known for across the world—and it takes the brand up a few notches, claims Jatia.

In a cluttered retail environment, Jatia knows these details count. This is why the company is innovating at various levels not just food alone. For instance, it is aggressive with price points, promotions, combo offers, etc. A McDonald’s Happy Price Menu stands at Rs 20 only and Jatia makes no bones about the fact that it has been so for the last four years. The Family Value Meal, another popular offering, combines burgers, colas and soft toys to woo the family audience, which swells over the weekends. The regular office-going and college crowd anyways troops in on weekdays ensuring that there are adequate footfalls at outlets. “We serve about 300,000 customers a day. Our business is about volumes,” he says.

Playing the volume game implies being on the ball when targeting customers. Jatia is ensuring this by expanding operations beyond the 61 outlets that currently exist in the west and south of India. On a nation-wide basis, McDonald’s has 140 outlets. This number pales in front of neighbouring China, which has about 1,000 restaurants. Further, about 150 outlets are being added ever year in China. But Jatia is not distressed by these figures. “We have to understand where we stand and the business potential that exists here,” he says. In keeping with this he intends adding about 15-20 outlets by the end of this year to take his tally of restaurants to about 75-80. He says, “I don’t think there will be a glut of outlets. The idea is to make ourselves available to as many people as possible. At the same time, we are not setting up restaurants for the sake of it. We realise that commercial viability matters.”

It is commercial viability alone that prevents Jatia from making fancy announcements about new launches. “It doesn’t make sense doing that. We have to understand why we are in the business.”

This need to keep one’s focus on the business is something Jatia claims to have imbibed from the McDonald’s international system. Frequent training by the parent, which has a large franchisee network across the world, has ensured that its philosophy has been dinned into Jatia. “There are lessons I’ve learnt while managing the business. I enjoy what I do.”

Part of the learning involves weeding out inefficiencies in the system. “If costs can be controlled effectively, there is no need of passing it on to consumers,” says Jatia. “We work hard to keep our price points.” One way of minimising costs is by combining backend operations. Jatia and Bakshi work together on supply chain, marketing and equipment handling issues. “I run the national supply chain out of Mumbai and Vikram manages equipment supply out of Delhi.” There are other fora where the two meet. “We have something called the national marketing board, the national menu management board and the national supply chain board. We also have something called the partners meeting. Every two months, Vikram and I meet along with our core team members. Key decisions concerning the brand are made on these occasions. This is how we ensure that standardisation is maintained throughout. Our operations people work together. So do development people. But on marketing and supply chain the interaction is on a daily basis.”

This tendency of taking people along characterises Jatia’s leadership style. He is described as fun-loving by his peers but at the same time hardworking and committed to his business. “I don’t compromise when it comes to work. I do believe though that I should give my employees the freedom to decide what they want to do or not do. It doesn’t make sense if I take all the decisions. What is the point of hiring them then?”

The 40-year-old father of twin sons has given complete freedom to his wife Smita too, who assists him in his retail venture as chief operating officer of McDonald’s (west & south). Her beginnings were humble at the company, though. She began with the responsibility of launching the brand as part of the marketing effort to get it noticed. Slowly but steadily she took on more responsibilities — training, HR, operations — eventually becoming COO last year. Today, she manages day-to-day activities, while Jatia is into store development and supply chain management. “It helps to have her on board because I travel a lot,” he says.

Jatia’s travels have exposed him to diverse cultures and thinking. “I love going to exotic places,” he says. Spending time with the kids is a must when he’s in town. “Dinners are with the family,” he says. “I need to give the kids some time. That helps me understand them better and provide for their needs.”