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NYT -- McDonalds Make vs Buy in Russia

NYT -- McDonalds Make vs Buy in Russia - Russias Evolution...

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Russia’s Evolution, Seen Through Golden Arches By ANDREW E. KRAMER Published: February 1, 2010 MOSCOW — Viktor A. Semenov was growing lettuce on a collective farm outside Moscow in 1990 when a representative of McDonald’s stopped by. The company had just opened a restaurant. Could he sell it a few boxes of lettuce each week? At the McComplex outside Moscow, buns are made now by a contractor, and McDonald's has put the building up for sale. Mr. Semenov’s assistant turned it down. One restaurant was too small an order. “I said, ‘My friend! You see how many McDonald’s there are in the West?’ ” Mr. Semenov recalled recently. “I said, ‘Sell them lettuce at any price. It’s our new strategy.’ ” With that, Mr. Semenov started a company that has all but cornered the market on packaged fresh vegetables in Russia . With a buy-one-get-one-free deal on hamburgers and a traditional Russian accordion band, McDonald’s celebrated on Monday the 20th anniversary of the opening of its first store in the Soviet Union, a restaurant that drew long lines. But the company celebrated a different milestone earlier this year by outsourcing the last product — hamburger buns — it had made at a proprietary factory outside Moscow called McComplex. It was built before the chain opened its first restaurant. Nearly everywhere else, McDonald’s buys ingredients, rather than making its own. But in the Soviet Union, there simply were no private businesses to supply the 300 or so distinct ingredients needed by a McDonald’s outlet.
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