the Economic Environment
- Big Macs
updated 2010 Jan 19
see also
 

In a number of international business textbooks an example of rapid changes in the economic environment is the establishing of McDonalds in Moscow after the period of Glasnost and its effect on the Russian economy.
http://www.mcdonalds.com/countries/russia/russia.html
formerlyat  www.mcdonalds.com/countries/russia/russia.html
McDonald's Pushkin Square restaurant

Since opening in 1990, McDonald's now operates 79 restaurants in Russia.
Many people in Toronto know that George A. Cohon, who ran McDonald's in Canada, is the one that opened up McDonald's in Russia and serves as Senior Chairman, McDonald's in Russia.

 
Contact made w Ron Christianson, Corporate Communications Manager, McDonald's Restaurants of Canada Limited, June 2005.
Copies of emails kept in the permissions binder.
.
McDonald's in Russia
- some opinions
In the 4th week of Sept 2005, a student in MGTC44, Victoria Zaynullina,  commented that Americans like to think that McDonald's in Russia is identified in the public mind with glasnost and perestroika (policies of openness and restructuring) under Mikhail Gorbachev, but Victoria found tons of negative information and some interesting posters and logos, like the one featured to the left.
ccc
Victoria says 

"In fact, Mcdonald's is a symbol of America and capitalism at its worst in the minds of many Russians. When war in Iraq started somebody wrote on the walls of McDonald's in Moscow: "Peace to Iraq, war to McDonalds".
pic supplied by Victoria

In some texts there is mention that nominal exchange rates (rates adjusted for inflation) are not often a good indicator of the international differences between economies. It is explained that there is a disparate price of a Big Mac in Russia and the U.S.A. This difficulty (and the use of comparing Big Macs) became well known among international business people so it was decided that a serious discussion could be made using the Big Mac - therefore the origins of the Hamburger Standard.
.
The Economist magazine took up the challenge and for several years produced a chart showing the price of a Big Mac in the countries of the world.
A simplisitic version of the chart is reproduced below.

 http://www.oanda.com/products/bigmac/bigmac.shtml (current listing)
Country
BigMac Price
in Local Currency
in US dollars
United States $2.43
-
Argentina Peso 2.50
1.03
Brazil Real2.95
1.21
Britain £1.90
0.78
Canada C$2.99
1.23
China Yuan9.90
4.07
Euro area €2.52
0.97
France FFr17.50
7.20
Germany DM 4.95
2.04
Hong Kong HK$10.2
4.20
Indonesia Rupiah14,500
5,967
Japan ¥294
121
Mexico Peso19.9
8.19
Russia Rouble33.50
13.79
Singapore s$3.20
1.32
South Korea Won3,000
1,235
Switzerland SFr5.90
2.43
Taiwan NT$70.0
28.8

When last checked in June 2005, this website www.oanda.comstill had a version of the chart for viewing
 http://www.oanda.com/products/bigmac/bigmac.shtml
(MGTC44 students are provided this info FYI, you are not expected to be tested on this)


 
McDonald's in Hong Kong In the 2nd week of Jan 2010, MGTC44 student Wallace C. at UTSC sent an interesting email talking about his experiences buying a Big Mac in Hong Kong and how he didn't think the BIG MAC chart was quite accurate.

Wallace explains
I was on your website earlier today just browsing around and there was this McDonald's page that caught my eye. Having traveled to various parts of the world and being a big fan of fast food I decided to take a look at the prices of Big Macs in various countries, starting with Hong Kong, where I was born and travel to frequently. To my surprise a Big Mac was listed at $4.20 USD! I believe there was something wrong with this, as I had been back to Hong Kong during 2005 and it did not cost me $4.20USD to have a Big Mac, so I looked up the exchange rate of HKD vs USD.

I had realized that in 1998-2005 that 1 USD was about 7.80 HKD and in May 2005, something known as the Linked Exchange System Rate was introduced which had 1 USD set at upper and lower limits of $7.75-$7.85 HKD. So if a Big Mac was around $10.2 HKD it would be approximately $1.31 USD. 
c
Wallace notes the 2009 figures can be seen for the Big Mac, according to 2009 exchange rates, by clicking on the screen capture to the left.
 
c
 
 
witiger.com
   CONTACT I MAIN PAGE I NEWS GALLERY I E-BIZ SHORTCUTS I INT'L BIZ SHORTCUTS I MKTG&BUSINESS SHORTCUTS I TEACHING SCHEDULE
.
  MISTAKES ITEXTS USED I IMAGES I RANK IDISCLAIMER I STUDENT CONTRIBUTORS I FORMER STUDENTS IPUBLICATIONS I TIPS I
.
.