Contemporary Business Article Review Three 1

Contemporary Business Review Three - Could McDonald's Be the Latest Victim of Russian
Retaliation?
Thiago Indalcio Santos
BA 2020 DAY AA Operations Management
October 21, 2014
Professor Edward Ruppel


Contemporary Business Article Review Three 2


Business Review Three - Could McDonald's Be the Latest Victim of Russian Retaliation?
Summary
The restaurant chain McDonald's can be considered a great representation of American
capitalism in the face of Russia, the whole network has 438 franchised units distributed all over
Russia.
Russia has applied various forms of retaliatory trade sanctions imposed after the conflicts
in Ukraine, as food imports from the United States and the European Union, especially meat and
dairy products. Russian authorities temporarily closed four units of McDonald's in Moscow and
began the inspection of other branches in the country amid deteriorating relations between the
Kremlin and the White House because of the Ukrainian conflict.
According to Russian sanitary service, which began oversight of McDonald's in the
Sverdlovsk and Chelyabinsk regions, the measures apply because of several reports of Russian
citizens.
Among the four closed establishments stands the legendary McDonald's Pushkinskaya
Moscow square, the first to open the doors on Russian territory in 1990, a year before the
disintegration of the Soviet Union, and that for many Muscovites foreshadowed the fall of the
Iron Curtain . One of the other three closed restaurants in the Russian capital is situated just next
to the Kremlin in Manezhnaya square.
In early April, McDonald's announced the temporary closure of its three restaurants in the
Crimea because of "suspension of the necessary financial services" due to sanctions from
Western powers to Moscow after the annexation of this Ukrainian peninsula.
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One of the largest affected in this retaliation may be the European Union, which is the
largest economic partner of Russia, could lose approximately $ 9 billion in sales due to the
prohibitions imposed by Putin. Research predict that in addition to financial losses such
retaliation may lead to loss of 130 thousand job positions within the block of nations, and
predicted loss of 12 000 jobs in the USA accumulating loss of $ 1.7 billion.
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References
Matlack, Carol. (2014, October 20). Could McDonald's Be the Latest Victim of Russian
Retaliation? Retrieved September 22, 2014, from Business Week:
http://www.businessweek.com/articles/2014-08-20/russian-sanctions-bite-europe-
mcdonalds-in-russia-suffer-too