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Case Title:

McDonald's in Russia

Publication Year : 2008

Authors: Sai Prasanna Rajendar Singh Rathore

Industry: Retailing

Region:Russia

Case Code: GGL0044

Teaching Note: Available

Structured Assignment: Available

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Abstract:
McDonald's - a name easily digested by commons and celebrities alike, in the developed nations - has been trying hard to serve developing nations. It would be a mistake if one assumes it is out to better the living standards in the second world. Rather, McDonald's stalled growth in developed nations led its foray into emerging markets. The case study chronicles McDonald's entry into Russia and how it set up its outlets, leaping over Russian brand of communism. After its first Russian outlet opened in 1990, McDonald's leveraged the Russian's love for American food and gradually strengthened its presence. But its growth was restrained - due to Russian bureaucracy as well as a behavioural shift from bigger-in-size to better-in-customer-reach. How should McDonald's deal with its dilemmas in Russia? What are its growth options there? Should it be wary of store expansions or spread across Russia?

Pedagogical Objectives:

  • To examine the characteristic features of emerging markets, particularly Russia
  • To analyse the political, economic and social conditions in Russia and identify areas in which the nation differs from other developed countries
  • To understand and compare McDonald's business model, both globally and in Russia
  • To examine the food consumption trends and consumer behaviour in the Russian fast food segment
  • To analyse the reasons behind McDonald's cautious growth in Russia and suggest ways to gain sizeable market share there

Contents:

  • Russian Economy Before and After the Collapse of the Soviet Union
  • McDonald's in Russia The Initial Struggles and Crisis Management
  • McDonald's After the Crisis The Growth Dilemmas

Keywords : Fast food; Russian economy; Collapse of the Soviet Union; Economic reforms; Liberalisation; privatisation & globalisation; Ruble inconvertibility; George Cohon; Khamzat Khasbulatov; Russian financial crisis and its impact; Russian bureaucracy and communism; Market Entry Strategies Case Study; McDonald's flawed expansion strategy; McComplex; Competition from local and global rivals; Growth plans for McDonald's in Russia; McDonaldl's at Pushkin Square

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