Mcdonalds Russia
Introduction:
George Cohon was a young lawyer in 1968 when Ray Croc, the founder of McDonald’s, offered him exclusive perpetual rights to McDonalds in eastern Canada. Just eight years later at the Montreal Olympic Games, Cohon decided to bring McDonald’s to Russia. It took him 14 years to open up the first store in the heart of Moscow’s Pushkin Square. The opening of the store was a grand affair and was covered in the international news. Cohon eventually opened up another 25 stores in Russia before the Ruble crisis.
This paper deals with the entry of McDonald’s into the Russian market and the prevailing economic environment in Russia at the time. It will briefly outline the steps taken by the team to ensure a successful establishment in Russia and discuss the problems faced by McDonald’s during the 1998 Ruble crisis.
A brief background - Russia:
The restaurant facilities in Russia were not diversified in the 1970’s. It consisted of formal dining room restaurants or informal cafes. The formal dining rooms were incredibly rigid with a strict Russian menu. The service was inferior and waiters were lazy. The atmosphere with the white table cloth and cutlery was gloomy. A two to three hour leisurely lunch, served by lazy waiters was a common scene at these restaurants. The informal cafes on the other hand, were the complete opposite. The menu was again Russian and consisted primarily of soups and coffee. There were no seats for the guests and they ate while standing around small table. The entire set up was very unsanitary. Looking at the restaurant structure and the kind of food the Russians consumed (meat, potatoes and bread) Cohon realized the massive potential for McDonalds to expand into Russia.
The bureaucracy during the Cold war era in the Russian was overwhelming. Russia was called the “Evil Empire”. Cohon kept travelling to Russia to meet with and persuade the officials, but little came off it. Later in 1980’s, Russia saw the dawn of the glasnost
George Cohon was a young lawyer in 1968 when Ray Croc, the founder of McDonald’s, offered him exclusive perpetual rights to McDonalds in eastern Canada. Just eight years later at the Montreal Olympic Games, Cohon decided to bring McDonald’s to Russia. It took him 14 years to open up the first store in the heart of Moscow’s Pushkin Square. The opening of the store was a grand affair and was covered in the international news. Cohon eventually opened up another 25 stores in Russia before the Ruble crisis.
This paper deals with the entry of McDonald’s into the Russian market and the prevailing economic environment in Russia at the time. It will briefly outline the steps taken by the team to ensure a successful establishment in Russia and discuss the problems faced by McDonald’s during the 1998 Ruble crisis.
A brief background - Russia:
The restaurant facilities in Russia were not diversified in the 1970’s. It consisted of formal dining room restaurants or informal cafes. The formal dining rooms were incredibly rigid with a strict Russian menu. The service was inferior and waiters were lazy. The atmosphere with the white table cloth and cutlery was gloomy. A two to three hour leisurely lunch, served by lazy waiters was a common scene at these restaurants. The informal cafes on the other hand, were the complete opposite. The menu was again Russian and consisted primarily of soups and coffee. There were no seats for the guests and they ate while standing around small table. The entire set up was very unsanitary. Looking at the restaurant structure and the kind of food the Russians consumed (meat, potatoes and bread) Cohon realized the massive potential for McDonalds to expand into Russia.
The bureaucracy during the Cold war era in the Russian was overwhelming. Russia was called the “Evil Empire”. Cohon kept travelling to Russia to meet with and persuade the officials, but little came off it. Later in 1980’s, Russia saw the dawn of the glasnost