McDonald's Russia: A Jewel in the McDonald's Emerging Market Operations?

            
 
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : BSTR366 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

Entry and Expansion Strategy / Globalization / Managing across Borders and Culture / Emerging Market
Case Length : 34 Pages
Period : 1990-2010
Pub Date : 2010
Teaching Note : Not Available
Organization : McDonald's Corporation
Industry : Fast Food
Countries : Russia

Abstract:

McDonald's Corporation is one of the oldest chains of quick service restaurants in the world and the largest. It was started in the late 1930s by two brothers Richard and Maurice McDonald in California, the US. Within a few years, the chain had become quite popular and it started to grow in numbers. The founders started to franchise out the stores to other partners at a premium price. In 1967, it started its international expansion for the first time by entering Canada and subsequently ramped up its presence in other international markets.

McDonald's opened its first outlet in Russia in 1990. It entered at a time when the country was still struggling to gain political and economic stability after reforms had been introduced.

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It started by developing the food processing unit and training the local suppliers. McDonald's became an instant hit in the country where the culture of fast food was as new as the burger. The company experienced many obstacles along the way but it continued its slow and steady growth in the country. As of 2010, Russia was one of its key markets in Europe and some experts considered it as the jewel in McDonald's system.

The case details the difficulties McDonald's had in entering the country and discusses how it overcame various challenges to establish itself firmly in the market. It discusses in detail some of the strategies adopted by McDonald's in Russia, including HR strategies, procurement strategies, expansion strategies, etc. that helped it gain a strong footing in the Russian market - so much so that the company accounted for more than two-third of the fast food market in Russia. The case ends with the challenges that the company is facing in the country.

Issues:

To understand entry and expansion strategies for an international company.
Evaluate McDonald's globalization strategies.
Study and analyze the entry and expansion strategies of McDonald's in Russia.
To learn about the challenges of international operation for a fast food chain in an emerging economy like Russia.
Explore the strategies McDonald's can adopt in the future to sustain growth in the Russian market.

Contents:

  Page No.
Introduction 1
Background Note 3
International Expansion 4
Entering Russia 7
Expansion in Russia 9
Results 14
Overcoming Challenges 16
Outlook 18
Exhibits 20

Keywords:

Entry strategy, Expansion strategy, Globalization, Political environment, Regulatory environment, Competition, Operations, Culture, Pricing, Purchasing, HR Strategy, Russian fast food market, Emerging market strategy, Russia, Mcdonald's

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