Recently New York Times talked about Mc Donald’s entry in Russia and how 20 years hence, is outsourcing its last of 200 ingredients, in its article “Russia’s Evolution seen through Golden Arches”.

Read the full article here

“We discuss how to think about this case study in Chapter Four of our book.  As the NYT article says, McDonalds’ entry into Russia required it to invest in a variety of services that it took for granted in other locations – getting potatoes with the right texture and consistency, and getting them in a very timely fashion was difficult, given the absence of the right supplier base; making sure there were logistics providers who could adequately deal with McDonalds’ needs was hard, nor did many logistics providers who served McDonalds elsewhere wish to expand into Russia at the time.   In the language of our framework, there were lots of missing services – institutional voids – in Russia at the time, and McDonalds had to fill these voids to launch its operations, even though these services were not part of what it would consider ‘core.’  Over time, as these voids have been filled by independent entities, McDonalds has withdrawn from these businesses.  The operation, needless to say, has been quite successful.  It is a good example of the framework, and how multinationals have to think about adapting to particular contextual circumstances in emerging markets.”, -Authors, Winning in Emerging Markets.

Do you agree? Looking forward to your comments and experiences in similar situations.

One Response to “McDonald’s in Russia: Institutional Voids to address”

  1. McD says:

    [...] McDonald’s in Russia: Institutional Voids to address » Winning in …McDonald’s in Russia: Institutional Voids to address. Recently New York Times talked about Mc Donald’s entry in Russia and how 20 years hence, … [...]

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