Mcdonald’s Russia: Managing a Crisis Essay

1092 Words Apr 29th, 2013 5 Pages
#1. In the late 1980s, Soviet Union had brought its glasnost (openness) era. Soviet president Mikhail G. introduced the revolutionary idea of Perestroika, which refers to “economic restructuring.” Gradually, Soviet’s culture and business began to grow. The political parties began to spring up, and farmers began to sell their products on the open market. In 1987, the Kremlin passed a new law on the joint ventures, easing restrictions on the importation of foreign capital, technology, and expertise.

#2. First of all, Cohon’s idea to open a McDonald in Russia was originated at the Montreal Olympic Games where he met a group of dignitaries from the Soviet Union went in McDonald’s for snacks. When these officials entered McDonald’s, they
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People ate food with cutlery; no one ate food with their hands etc. However, dinning in McDonalds, the place was so clean, so sparkling and cheerful. The atmosphere was more relaxed, there were more choices of food and Russian people had their own unique way of eating the Big Mac, as mentioned, eat Big Mac as two sandwiches.

#7. Menu, the core menu had to be the exactly same as the ones in NY, Toronto and many other countries. No special menu, and the price of Big Mac was universal because economists used it as an inflation index. The rationale behind it was “100 percent that McDonalds had to be the same anywhere in the world.”

Pricing, in terms of pricing, the team decided to use the Soviet Cafes as a benchmark. A meal in McDonalds tends to cost less than a mea in Café. The rationale behind it was labor costs were significantly lower in the Soviet Union than in most other McDonalds countries, and these price still yielded high margins for the company.

Store Design, the restaurant provided seating close to 1000 people and have 27 cash register lines. In terms of designing, the restaurant tends to make people feel like they were anywhere in the world.

Rules of Conduct, the team decided to institute a “no smoking” policy in the restaurant, no alcohol from premise, no coat check, and most important, no special privileges for foreigners in line.

#8 in terms of pricing related to ruble crisis, McDonalds had the option to raise price like many other

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