McDonald’s/Burger King Analysis
McDonald’s and Burger King have competed as the top two fast food chains in the nation since the middle of the twentieth century. Both of these companies established a strategy built around delivering food at a fast pace and in a consistent quality. The cases at hand revolve around one McDonald’s and one Burger King, both located in Hillybourne, so as to provide a level backdrop to compare the two restaurants in more depth. This analysis will first compare and contrast the two Hillybourne operations; looking at their production process, strategy, and overall impact on competition, profit, and strategy. The second section of this analysis will compare the operations of the Hillybourne McDonald’s with the operations of a modern McDonald’s, as McDonald’s underwent a major shift in production strategy in 2001. Here, we will look to the change in process, and the impact of such change on McDonald’s positioning, competitive viability, and sustainability. Analysis:
Part A: McDonald’s Case vs. Burger King Case:
Looking first at the McDonald’s process map from Hillybourne, one can quickly see that it is built for pure speed. Large amounts of burgers and fries can be produced in a short amount of time, and additional inventory is held ready to be sold for when a customer places their order. The process map for the Hillybourne McDonald’s is found in Exhibit A. Burgers, fries, and pies are all created based on estimated sales by the day and hour, and held in inventory for when customers place their orders. Custom orders must be created from the beginning of the cycle. McDonald’s strove to meet a customer wait time at no more than one minute in line and 30 seconds at the counter. The Hillbourne location was just over those marks, at two minutes and three seconds total time. The service process at McDonald’s is shown in Exhibit D. The customer made their order either at the counter or at the drive-thru, and the cashier was responsible for assembling the order, pouring the drinks, and collecting the money. All of this was to be included in the 30 second customer wait time. The Burger King process was much different. Instead of preparing a large quantity of finished product to sell, they created an inventory of the meat for the sandwiches and burgers, and performed the actual assembly when the customer placed an order. This process, found in Exhibit B, produced a final product that was more fresh than the food at McDonald’s but at the cost of speed. The Burger King target customer-to-door time was three minutes (twice as slow as the McDonald’s time) and the Hillybourne location averaged four minutes and five seconds, which is twice as slow as the actual time at McDonald’s as well. The service process at Burger King, found in Exhibit C, is extremely similar to that of McDonald’s. The cashier is responsible for assembling the order, pouring the drinks, and collecting payment. One additional duty for the Burger King cashier though, is the responsibility of calling the customer’s order back to the kitchen over the loudspeaker, so it could be assembled. Both restaurants planned their WIP inventories based on expected consumption per hour of each product. They both performed a similar analysis with regard to scheduling employees. The peak times at each restaurant held the most product and used the most staff. Method of Competition:
The McDonald’s operation at Hillybourne is based on a made-to-stock strategy. Made-to-stock operates where inventory is created before the final customer is known. By understanding purchasing trends, McDonald’s is able to estimate the inventory they will sell over a given period, and have that inventory created essentially as soon as the customer places their order. This method gives the absolute fastest time from order to product, and is the cornerstone of McDonald’s strategy. The...
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