International business has brought about a global reorientation of supply chain strategies. While a particular product may be sold here, its subcomponents may come from many different nations. The components of the Big Mac, for example, come from seven different countries. Sesame seeds are from Mexico, pickles from Germany, burger buns from Russia, beef patties from Hungary, onions from the U.S., cheese from Poland and lettuce from Ukraine.
The Big Mac Index that is published annually by the Economist shows the average price of the burger around the world and is a way to measure purchasing power parity (PPP) between countries. It is also an indicator of the individual purchasing power of an economy.
In this year’s index, Switzerland tops the list with a price of USD 7.54. The United States ranks sixth with a price of USD 4.79. In Russia and Ukraine, however, you can buy five to six more burgers than in Switzerland as the price of a Big Mac is USD 1.36 and USD 1.2 respectively.
The Big Mac, as a top-selling McDonald’s burger, is used for comparison because it is available in almost every country and manufactured in a standardized size, composition and quality. McDonald’s is a worldwide operating fast food restaurant chain with global revenue that amounted to about 28.11 billion U.S. dollars in 2013.
Is this accurate? How much is the Big Mac in your country?
The Economist. Global prices for a Big Mac in January 2015, by country (in U.S. dollars)*.
Michael R Czinkota, Ilkka A Ronkainen, and Michael H. Moffett. Fundamentals of International Business (New York: Wessex, 2015).
Related posts on global brands: