The purpose of this thesis is to provide an international management exercise, derived from a case study, that tests the ability of students to overcome cultural obstacles and structure an integrative marketing agreement. The existing thesis examined and judged the case study, which was written by Youngme Moon and Kerry Herman from Harvard Business School (HBS). It will describe the business plan as well as possible solutions of McDonald’s in Russia during the financial crisis, which ones judged in the case study of the HBS.
After an introduction to the history of the McDonald’s worldwide and McDonald’s Russia, the „Big Mac Index” defines. The second chapter of this thesis is the description of the strategic situation. The construction of strategic planning, the market entry forms and marketing concepts of McDonald’s follows, which ones being examined in detail. Furthermore the second chapter contains the opening of the first McDonald’s restaurant in Russia. The descriptions of the problems in the year 1998 as well as McDonald’s approach of the crisis are carried out to counteract as another point of this thesis. The outline of the possible solutions of one's own like environmental analysis or the „Best Mix of 4P´s” forms the quintessence of this thesis. Different suggestions have been discussed recently, and experienced partners and personal contacts is one of those impressive ones. Last, a short summary is given to the factors of success of McDonald’s Russia and an outlook, what one can expect from the Russian market in future.
Table of Contents
1 Introduction
1.1 History McDonald´s
1.2 Story of McDonald´s Russia
1.3 Big-Mac-Index
2 Situation and construction
2.1 Market entry
2.2 Marketing strategies
2.3 Marks admission strategies
2.4 Franchising
2.5 Strategic planning and construction
3 Problems and solution trials
3.1 Crisis
3.2 Solution of McDonald´s
4 Own assessment
4.1 Analyse enviroment
4.2 Best Mix of 4P´s
4.3 Experienced partners and personal contacts
4.4 Marketing process and strategic planning
5 Conclusion and view
5.1 Success by different factors
5.2 View
Objectives and Topics
This thesis examines the strategic management approach of McDonald's in the Russian market, focusing specifically on the company's ability to navigate the financial crisis of 1998 through adaptive marketing and operational planning.
- Strategic market entry and expansion strategies in Russia
- Implementation of franchising and supply chain management
- Crisis management and adaptation of the marketing mix (4P's)
- Macro-environmental analysis of the Russian economic and cultural landscape
- Long-term success factors and future market outlook
Excerpt from the Book
2.5 Strategic planning and construction
After the decision was taken to the franchise, it was to carry out necessarily strategic planning and the strategic construction of the fast food chain. The first step was to hiring and training a crew.
The employees were searched over a single day job advertisement in only one Newspaper and unbelievable McDonald’s gets 27000 written responses. The fast food chain announced: we pay based on productivity, come grow with us. For many Russians it was a chance for a better life and one moreover strode on the career ladder. After hiring the four top managers were sent for training in Toronto. Khamzat Khasbulatov the today’s president of McDonald’s Russia and Sarah Casanova the senior marketing director was one of these [6]. In addition, a number of only 60 Canadians support the whole crew of 630 employees in the beginning.
After hiring and training the crew the currency decision was the next step in the strategic planning. The choice was between two currencies. On the one hand the hard currency like U.S. Dollar or German Marks and on the other hand the Rouble. The first mentioned would reinforce the exclusivity and excluding most of the potential Consumers. The Rouble was worthless on the international exchange and nonconvertible for the western Market. If the fast food chain takes the Rouble for payment, the currency would have no value outside Russia. The situation seemed to hopeless, as moreover industry analysts estimated that out of the roughly 1400 joint venture deals Moscow had signed with western enterprises to 1990, only about 100 had a reasonable shot at profitability. But, the decision for the Rouble was taken, because it is a Russian company with Russian employees and Russian raw materials and it improves the further investment in Russia [6].
Summary of Chapters
1 Introduction: Provides a history of McDonald’s worldwide, the story of McDonald’s in Russia, and an explanation of the Big-Mac-Index.
2 Situation and construction: Details the market entry strategy, marketing concepts, and the establishment of the franchising system in Russia.
3 Problems and solution trials: Analyzes the 1998 financial crisis and the strategic responses adopted by McDonald's to maintain business viability.
4 Own assessment: Presents an environmental analysis (cultural, political, economic, legal) and evaluates the marketing mix and strategic planning.
5 Conclusion and view: Summarizes the success factors of McDonald's Russia and provides an outlook on the future development of the Russian market.
Keywords
McDonald's, Russia, Crisis Management, Franchising, Market Entry, Strategic Planning, 4P's, Financial Crisis, Rouble, Supply Chain, Perestroika, Big Mac Index, Economic Environment, Marketing Strategy, Foreign Direct Investment
Frequently Asked Questions
What is the primary focus of this work?
The thesis focuses on how McDonald’s entered the Russian market and successfully managed the challenges brought about by the 1998 financial crisis.
Which central thematic areas are covered?
The work covers historical development, strategic market entry, supply chain construction, marketing strategies, and crisis navigation in Russia.
What is the core research goal?
The goal is to provide an international management exercise that demonstrates how a company can overcome cultural obstacles and economic instability through effective marketing and strategic agreements.
Which scientific methodology is used?
The research is based on a case study analysis, utilizing data from the Harvard Business School, macroeconomic indicators, and strategic management models like the marketing mix.
What topics are discussed in the main body?
The main body treats the history of the firm, the specifics of Russian market entry, the selection of franchising as a business model, and an environmental analysis of the country.
Which keywords best characterize this work?
Key terms include McDonald's Russia, crisis management, franchising, market entry, and the 4P's marketing mix.
Why did McDonald’s choose to use the Rouble despite its instability?
The decision was made because McDonald's operated as a Russian company with local employees and materials, and utilizing local currency facilitated further investment within the country.
What was the function of the "McComplex"?
The McComplex was a large-scale food processing and distribution centre established in 1990 to ensure quality control and satisfy the supply needs of the restaurants in Russia.
- Quote paper
- B.Sc. David Molch (Author), 2007, McDonald’s Russia: Managing a Crisis, Munich, GRIN Verlag, https://www.grin.com/document/133188
