Big Mac's different strokes

Stung by a consumption slowdown and cut-throat competition from other quick-service chains, Big Mac is trying hard to give customers more reasons to come to its stores. So its latest India menu now comprises a differential pricing strategy and better in-store experience.

While Vikram Bakshi’s Connaught Plaza Restaurants, which has a joint venture with McDonald’s and has rights for the north and east, cut prices by 6-15 per cent from August 1 to boost sales, Hardcastle Restaurants, a development licensee of McDonald’s which runs West and South India operations, has refrained from doing so.

“When customers are feeling the pressure of inflation from all sides, we thought it is a good time to rationalise prices,” says Bakshi. He claims the chain has seen 10 per cent increase in sales, though it has taken a hit of 40 basis points in its margins after it cut prices. “We think 10 per cent growth is far superior than a 40 basis points hit on margins.”

Bakshi may have a point as early this year, Pizza Hut, run by Yum Restaurants India, launched the ‘Rs 29 pizza’ and KFC added two snacker burger and new beverage Krushers Frappe to its Streetwise Menu which starts at just Rs 25.

But Hardcastle’s Amit Jatia has a different take. “We do not need to reduce prices as we are seeing a strong comparable sales growth in our stores in the south and west. We believe consistency in offering ‘everyday low value’ has paid off for us,” says.

Doesn’t such differential pricing create confusion in the minds of consumers? Jatia does not think so. “Anyway, different states have different taxes which make prices different. The consumers’ perception of value is also different,” he adds.

Even retail consultants such as Devangshu Dutta, chief executive, Third Eyesight, see logic in the move. “Firstly, in India, McDonald’s has two JVs with separate P&Ls – so the opinions of the partners in their respective regions would have more weight than a simple franchisee’s would. Secondly, local relevance of product mix and pricing is a key driver of success in all retail products.”

Besides pricing, McDonald’s is also experimenting with different formats to woo customers. While Jatia’s Hardcastle is looking at bigger restaurants of 4,000 sq ft , Bakshi recently launched smaller-sized ‘remote kiosks’ which are within three to four kms of a “mother store” and located at metro stations, hypermarkets and high streets.

McDonald’s is also opening new stores and revamping the existing ones under new designs to make them more appealing. So you have cushioned bar stools, plush LED lights and POS/EDC terminals from the earlier stainless steel furniture and dim yellow lightings. “We have learnt that design has to keep up with consumer demands,” says Jatia.

Being modern and contemporary also led McDonald’s to increasingly accept credit cards at almost all its new outlets.

Experts, however, say the improvement of McDonald’s stores should have happened much earlier. QSRs, which focus on coffee, have overtaken McDonald’s. There is no doubt that McDonald’s needs to look contemporary, soft and modern with cutting edge,” says Harish Bijoor, CEO of Harish Bijoor Consults Inc.

Even for Shripad Nadkarni, founder director, MarketGate Consulting, a brand consulting firm, McDonald’s stores had begun to look “dull” for some time now. “One of McDonald’s’ biggest successes is understanding the Indian palate. They draw on ‘glocal’ products which have been a huge success for them. However, where McDonald’s was lacking was in-store experience. Their stores needed improvement. It now seems the in-store experience is moving along the consumer preferences,” says Nadkarni.

NKorea's economic zone remains under construction

More than a year after construction began, the road from China to North Korea's special economic zone in Rason is paved. Power substations are being built, railway lines are being linked to routes to Siberia, and piers at the harbor expanded.

This week, an international trade fair staged at the exhibition hall in the zone in North Korea's far northeast offered foreign investors and visitors from China, Britain, Russia and elsewhere, as well as journalists from The Associated Press, a glimpse at the efforts to turn a long-neglected, remote region into a manufacturing, tourism and transportation hub.

A diorama of the future Rason International Commercial Trade Center displayed at the trade fair showed rows of modern buildings sparkling with lights and cars parked under street lamps along tree-lined streets ― a look at what officials hope the zone will look like in years to come. But whether that vision comes to fruition will depend in large part on whether China comes through with the electricity, supplies and money needed to bring Rason into the 21st century.

Over the past two years, North Korea's leadership has made the bid to transform Rason into an international hub a priority, along with drawing much-needed foreign investment. Last week, Jang Song Thaek, a senior official and uncle of leader Kim Jong Un, led a visit to China to discuss joint cooperation on developing economic zones along the border in an indication that the project has the attention of top officials.

North Korea's economy has languished in sharp contrast to the booming market economies of its neighbors in Northeast Asia. Pyongyang has not publicly released detailed economic data for decades, but the CIA Factbook estimates its per capita GDP at $1,800. Outside the capital, Pyongyang, much of the country remains poor, with buildings and roads in dire need of repair, and the United Nations says two-thirds of North Koreans face some form of chronic food shortage.

In recent years, North Korea has turned increasingly to China to provide trade, investment and knowhow in exchange for access to its minerals and labor.

Government policy calls for strengthening economic cooperation with other countries while still maintaining North Korea's "juche" policy of self-reliance, Yun Yong Sok, vice department director of North Korea's Committee for Investment and Joint Venture, told the state-run Korean Central News Agency in March.

"Contracts on joint venture and joint collaboration have been on increase with the investment environment changing for the better," he told KCNA.

The government directive to seek foreign business partnerships is a shift in a policy away from the insularity of past decades.

Still, doing business in North Korea is a challenge. Most foreign visitors cannot travel freely in and out of the country, drive their own cars or communicate with their local counterparts by cellphone ― basics for conducting business anywhere else in the world.

New rules for Rason were designed to get around some of these restrictions and make it more foreigner-friendly. Still, Rason is working on providing basic infrastructure, said Kim Yong Nam, vice director of the Economic Cooperation Bureau of the Rason City People's Committee.

"Right now, the most important thing is to improve the infrastructure, including electricity supply, transport and harbor construction as soon as possible," he said.

The geographic potential of Rason, which encompasses the cities of Rajin and Sonbong, is clear. It sits in the far northeastern tip of North Korea, with Russia on one side and China on the other. Officials told AP the zone is called the "golden triangle" because it has three ports with waters that never freeze, even in winter, offering potential routes into all three countries.

NAB to probe CDA multi-billion rupee scam

The Executive Board of the National Accountability Bureau (NAB) has given a ‘green signal’ to launch a probe into Rs6.5 billion mega scam of LED streetlights project of the Capital Development Authority (CDA).

The decision was taken in the weekly meeting of the Executive Board of NAB that was presided over by Chairman Admiral (r) Fasih Bokhari here on Wednesday.

According to initial inquiry conducted by NAB, CDA is procuring LED streetlights for Rs150,000 per piece which is excessive, considering the lights are available for Rs20,000.

The entire cost of the project cannot be more than Rs1.36 billion if calculated using the lower rate for the lights.

According to sources, the Rs6.5 billion contract awarded will burden the exchequer as the Asian Development Bank had refused to finance the project.

In the instant case in January 2010, CDA advertised the project for replacement of conventional streetlights with LED lights without any planning and deliberations through CDA’s internal resources.

Earlier on May 29, 2012 under its preventive measures, the NAB had advised CDA for strict compliance of its recommendations to scrap the present LED project. NAB proposed CDA to prepare a new proposal in the light of inputs by a consultant of international repute as a host of newer and cheaper techniques are available in the market.

The NAB also instructed that non-compliance on their part could attract punitive provisions of the National Accountability Ordinance 1999.

Now the prevention department of NAB has recommended to the Board to hand-over the case to Operations Division for regular inquiry/investigation as they apprehend that the civic agency is planning to award the contract against the decision of the honourable High Court Islamabad.

In a case against Haji Adam Jokhio Managing Director, Karim Housing Project Karachi and others the Board accepted Voluntary Return (VR) of Rs442 million and decided to refer the case to Sindh building Control Authority/Association of Builders and Developers (ABAD) for further necessary action at their end to redress the grievances of allottees.

In this case the persons were accused of cheating public at large where the society did not hand over the plots to allottees.

Even there is no development made at site after lapse of more than 20 years. The society also cancelled plots without intimation to allottees.

Since 1990 to date, the accused persons booked plots against heavy amounts from the general public in three housing projects namely M/s Gulshan-e-Elahi, Gulshan-e-Muhammad and Muslim City projects of M/s Karim Housing Project Pvt Ltd.

In another case against Saghir Ahmed Senior Manager HBL, the Board accepted request of HBL for sale/auction of the property of accused person to recover the loss.

The Board also directed to deposit surplus auction proceeds with NAB for future settlement with accused persons in case of any claim is submitted. In this case the accused person embezzled Rs2.548 million through parallel banking.

The accused person as manager HBL, PAF Branch Karachi misappropriated various amounts of customers lying in their accounts and credited the embezzled amount into accounts of his family members and other staff.

House of the week: Tata Beach bach

For Nelson architect David Jerram, his Golden Bay beach house combines the design he has most loved and appreciated after 30 years of practice. And it has thrown up unexpected results, even for him.

Areas around the house positioned for protection from the wind have proved better than he envisaged, maximising views, location and that fabulous Golden Bay sun.

Using polished concrete floors, concrete block work on the ground level, plywood and an unexpected and unusual roof line, Jerram reckons he has conjured up a beach house feel, with a contemporary look and ease of use and care.

His peers agree. The house won a local New Zealand Institute of Architects award and was praised for the way it combines passive solar principles and boyhood fantasies to create a unique holiday house.

"From the lagoon it appears as a sleek black creature poised on the side of Tata Hill, while from the beach a large sloping window reflects the bush below, giving a sense of transparency. Dark stained interior plywood and polished black concrete floors are countered with large areas of glass, maximising views and the possibilities for solar gain. A bold response to a prominent site."

The house is self-contained downstairs with a rumpus room, kitchenette, bunkroom, bedroom, bathroom and decking. Upstairs, bedrooms, bathrooms and expansive living and dining open on to decking overlooking Tata Beach.

The roof line was designed to follow the hillside and the tilt enables the last of the evening sun to be enjoyed along with unobstructed sea views.

A bold step was to paint the interior plywood black, covering over beautiful natural wood grain.

"When we had brushed in hand with black paint on we did look at each other and wonder what we were doing," says Jerram. "But I felt there was so much light, and in fact there is in that part of the world, that we needed something that shielded us a bit from the late sun. And the black frames the view, it's a bit like having shades on or a hat."

The feature red inside picks out the colour of the flowers of the surrounding pohutakawa and gum trees.

Jerram says he thought carefully about placement of lighting to retain the timber ceilings and their line. He's mixed halogen, fluorescent and LED with unexpected results.

"With black walls and no street lighting, when we around the dining table with the light above someone can walk across the room and you barely know they are there. and when various parts of the room are lit up the rest of the room disappears."

The black theme is continued on the outside with the hope the build would recede into its environment when looking at it from the sea.

A large front window has been tilted to ensure it is non-reflective from the sea, an angle that is continued through the building. The rest of the house is double-glazed and a lap pool on the upper level provides all year round swimming through solar heating.

Time To Review The Architectural Board of Review?

As an architecture buff, I appreciate the history and need behind creating an ABR. A disaster created an opportunity in the 1925 earthquake. The city was devastated, and the then Plans and Planting Committee seized the chance to rebuild the city to the lovely red-tile roof Spanish Mission style we have today.

I went before the ABR to support the West Downtown lighting plan. The item in-progress was a fast-food restaurant on Milpas St, so I watched with keen interest. The owner and architect presented their final outside lighting plan, required as a result of their last go-round with the ABR.

They held their breath as the ABR members bent their heads and scrutinized the minute changes.

Then the ABR sat back, eyeing each other. One jumped in, and the rest followed.

A nitpicking exercise ensued. They debated whether the brackets, as chosen, fit the building. They finally grudgingly agreed the light brackets probably were ok in form.

Should the light brackets be Mariner Brown, as presented, or something more suitable, from the brochure? They finally decided Sea-Foam Green was a better fit with the architectural aesthetic of Milpas St.

What architectural aesthetic?! Milpas is a collision of eras: strip shopping centers, old bungalows, concrete block buildings, and 1950’s markets. The ‘architectural aesthetic’, such as there is, could perhaps best be described as “California eclectic.”

We were next. I remembered how my Brinkerhoff neighbors pushed for Victorian lights for 20 years. My stomach sank.

The West Downtown lighting project arose from six Eastsiders stabbing a boy to death on my block of lower De La Vina. He fell in a dark patch. Late-night bar traffic, if they saw him, assumed he was a drunk passed out in the bushes.

The police told us we needed to get lights down here, so a terrific neighbor wrote a grant, and Mayor Schneider, then a city council-member, shepherded it through the CDBG process.

Two years later, the Public Works department made the presentation to the ABR. I’d been in Planning Commission hearings and City Council appeals, but the ABR was new to me.

The Public Works team brought the plan for the lighting placement, and actual lights so the ABR could see the streetlights versus the smaller sidewalk lights. They then demonstrated the wattage.

One pounced: he wanted to change the placements. He felt there was too much ‘road furniture’ in the neighborhood. The others nodded, and started suggesting changes. They wanted to move the very light that would illuminate the dark hole where that boy died. Another proposed move would have preserved a darkened corner that had seen some drinking, drug use and a shooting.

I interrupted, as a neighbor whose corner and street they were discussing, to point out that they were undermining placements that were intended to INCREASE safety – the whole point of the lights.