McDonalds Russia: Managing a Crisis Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Add low priced Russia-specific food item

Another option that is available for McDonald’s in order to attract the customer back to the restaurant in the state of currency crisis is to add the Russia specific food items at low prices. The main advantage of introducing Russian local food items in the product category would provide McDonald’s with the opportunity to produce the food at very cheap rate as the products that are required for the preparation of the food are locally available. This would allow the company to attract the larger amount of customers that are unable to pay the high prices for the food items. Additionally, the introduction of the low priced food items would also provide the opportunity to attract those Russian customers that have never visited their restaurants.

Furthermore, there are also some disadvantages related to the introduction of low priced local food items. The main shortcoming of this option is that it may impact the brand perception and recognition of McDonald’s. Another disadvantage is that it could divert the focus of the company from its core menu as all the restaurants of McDonald’s consist of the same core food items.

Solution Evaluation

From analyzing the available solutions for the problem, it is recommended that it is beneficial for McDonald’s to introduce the low priced local food items in their product category at Russia rather than raising the prices of the food items. As this would help McDonald’s to improve their sales by increasing the demand of the food items as well as it is lowest cost option to implement.

As the company has selected only the ruble as a way for payment that is non-convertible currency rather than conducting McDonald’s Russia operations in hard currency that is the convertible currency. Therefore, it is favorable to target the Russian customers by offering them low priced local food item as it is also the aim of the company. Since, the value of Russian currency has fallen that lowers the purchasing power of the customers, so it contains a great opportunity for the company to target this group of customers with their low cost local food offerings.

McDonald’s could implement this solution by adopting a valuation approach in order to calculate the value of adding the local Russian food items in the menu. For this, the company needs to analyze the future expected cash flows with the addition of new food items during the expected time period as this would allow McDonald’s to function properly and efficiently. Likewise, McDonald’s could also use the international trade approach as well as acquisition of the existing operations that provide the opportunity to the company to enhance its market share by minimizing the risk of the loss .As well as these approaches would help the company to effectively introduce the new local food items in the menu and encourage the customers to come inside the restaurant which would encourage the customers to try their restaurant regardless of the currency crisis.

Conclusion

In the end, it is concluded that in order to implement the solution successfully, it is also important for the company to gather information about the activities of the competitors offering low priced quality local food already in the country by analyzing their brand offerings and actions.

However, it is necessary for the company to analyze all the external and internal factors that could impact the credibility and reputation of McDonald’s in order to sustain this adverse currency situation. McDonald’s could develop and implement this option by creating awareness among the customers by using the social media that may involve different online and offline marketing tools. Additionally, it is more important to measure the performance of this solution by getting a customer. As this would help the company to analyze the situation effectively in the state of currency crisis also to make any changes that may affect McDonald’s ability to achieve desired results.

Lastly, the company needs to develop the innovate business and marketing strategies that would help McDonald’s in order to attract the customers back into the restaurants as well as to target those customers who have never visit McDonald’s. Therefore, by focusing constantly on identifying the methods which help McDonald’s to gain continuous improvement in terms of profitability and sales. This would allow McDonald’s to survive during the time of currency crisis as well as to meet the expectations of the Russian customers..............................

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