| the
Economic Environment
- Big Macs updated
2010 June 7
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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.
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.
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| 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. |
| 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)
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| United States | $2.43 |
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| Argentina | Peso 2.50 |
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| Brazil | Real2.95 |
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| Britain | £1.90 |
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| Canada | C$2.99 |
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| China | Yuan9.90 |
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| Euro area | €2.52 |
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| France | FFr17.50 |
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| Germany | DM 4.95 |
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| Hong Kong | HK$10.2 |
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| Indonesia | Rupiah14,500 |
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| Japan | ¥294 |
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| Mexico | Peso19.9 |
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| Russia | Rouble33.50 |
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| Singapore | s$3.20 |
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| South Korea | Won3,000 |
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| Switzerland | SFr5.90 |
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| Taiwan | NT$70.0 |
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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 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. |
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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. |
McDonald's
in Beijing
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In the 1st week
of June 2010, MGTC44 student Jonathan S. at UTSC sent an interesting email
talking about his experiences buying a Big Mac in Beijing and how he ALSO
didn't think the BIG MAC chart was quite accurate.
Jonathan's helpful comments but the price of the Chinese Big Mac into the context of wages for the McDonald's employees in China. Jonathan explains
It
is important that people should view the working time-based Big Mac Index
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