Erlangga Dwinda Putra Rakhmatullah

225001

Discuss FOUR (4) success factors of McD's business operation in Russia. Please
support your answer with strong arguments.
Anwser:
McDonalds background (Brand Power)
Everyone knows MC Donald is one of largest fast food restaurant in the world.
McDonald's existence and expansions has been one of the prominent events in
revolutionizing the eating habits and lifestyles of people globally. Located in 119
countries world-wide, it is estimated that more than 46 million people dine at one of
the 31,000 outlets every day. So its not difficult for most valuable company entering
new market. When McD firstly open up their business in Russia, they received lots of
enthusiasm reflecting that the company was well known and the products were
accepted in that country.
Ability to adapt with costumers culture and situatuion
The ability that almost all of multinational companies possess, MC Donald tries to
provide the new simple menu with the price that can be attained during the rubles
crisis and also the restaurant in Russia is designed with formal dining rooms due to
the ignorance of Russians about fast food concept.
Dare to Take a Risk
At the beginning they knew that bringing McDonalds to Moscow would be no minor
undertaking. In the mid-1970s, most Russians had no concept of fast food and also
they realized that they were entering unchartered territory. During that time cold war
occurred and condition was so gloomy, but they were patience waiting and believing
that they would get lots of benefits. Eventually, their patience began to pay off. The
early 1980s brought the dawn of the glasnost (openness) era, and in 1985, Soviet
President Mikhail Gorbachev introduced the revolutionary idea of perestroika
(economic restructuring). Gradually, the Soviet hold on culture and business began
to thaw.
Menu
McD keep using core items they usually sell in headquarters and which global
standard product that can be offered all over the globe. At the first time Russian there
had no idea what kind of product they could order, so the company took initiatives to
give them a brochures and guide them. As resulted, the company received good
response from customer and most of the costumers satisfy eith the menu offered
especially for Big Mac and French Fries.

Erlangga Dwinda Putra Rakhmatullah

225001

Discuss FOUR (4) cultural challenges that had been faced by McD Russia.
Answer

Supply Chain

At the first time McD came pursuing Russia market it was stated that its almost
impossible to get reliable suppliers in Soviet Union because Their agricultural system
was outdated and highly inefficient. Supplier is the main core of output so they came
up with solution by Bringing McD European potato supplier, Dutch cucumber
specialist, and German meat supplier to train Russia counterparts from the ground
up.

Quality Control
The second challenge involved creating tightly quality food production system within
the crumbling Russia. Since their company always to aim offering consistently best
quality food, and since that was non-negotiable so the create their own production
facility.
Hiring and Training Employees
McD well known not only with the products offered but also the service from their
employees. There were some services standard that we could not compromise on.
So the number of Canadian managers were brought to support Russian crew.
Political Issues
At the first time the company penetrated the Russia market, around 1970s, Soviet
Union in the middle of cold war, and continuing with invasion of Russia toward
Pakistan.

Describe FOUR (4) rationales why McD was so confident to penetrate Russian fast food
industry.
Long-Term Vision

Erlangga Dwinda Putra Rakhmatullah

225001

Through their long-term vision to be the best in the world quick service fast food restaurant they
believe that they could serve all market all over the globe, they always think how to make our
costumers back to their restaurant and always make them smile after coming to theirrestaurant.