McDonald's Russia: A Jewel in the McDonald's Emerging Market Operations?
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Case Code: BSTR366 Case Length: 34 Pages Period: 1990-2010 Pub Date: 2010 Teaching Note: Not Available |
Price: Rs.400 Organization: McDonald's Corporation Industry: Fast Food Countries: Russia Themes: Entry and Expansion Strategy, Globalization, Managing across Borders and Culture, Emerging Market |
Abstract Case Intro 1 Case Intro 2 Excerpts
"We are not afraid of competition. The market is still in the making and one who takes right decisions at the right time will be the leader. We did it 20 years ago... When we saw the first queues that were lining up to our first restaurant in Moscow every day and night all year round, our success was predetermined and all we had to do was to develop as fast as possible."
- Khamzat Khasbulatov , McDonald's Corporation, president for Russia and Eastern Europe, in December 2009.
"Of the 118 countries where McDonald's Corp. does business, none can boast more activity than Russia. On average, each location serves about 850,000 diners annually -- more than twice the store traffic in McDonald's other markets. That has presented the world's largest restaurant chain with an unusual dilemma. Russia, with its burgeoning middle-class and consumer appetites for all things American, is a jewel in the McDonald's system."
- The Wall Street Journal, October 16, 2007.
Introduction
The year 2008 was considered a landmark year for the world's largest fast food chain, McDonald's Corporation (McDonald's).
While many companies, cutting across industries, were caught in the grip of the global economic recession, the fast food chain registered record performance. "[...] 2008 was a banner year for McDonald's. Revenues increased to a record $23.5 billion … global comparable sales increased 6.9 percent, and we marked our 68th consecutive monthly increase... operating income and earnings per share rose 17 and 15 percent, respectively (excluding the 2007 Latin America transaction)... and we returned $5.8 billion to shareholders through share repurchases and dividends paid. These financial results are among the best in our Company's history,"4 said Jim Skinner, Vice Chairman and CEO, McDonald's.
The company's European operations accounted for 42% of McDonald's total revenues. According to the company, McDonald's had registered sound growth in Europe in 2008, and this growth was spurred by performance in countries such as France, the UK, Russia, and Germany. The company also posed strong results in 2009, with these markets spurring the growth...
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