Mcdonald's Value Chain Analysis

Topics: Supply chain management, Supply chain, McDonald's Pages: 19 (5736 words) Published: March 16, 2011

Management Information System: McDonald’s case study
Idris Sugiarto (21671532)
McDonald’s is no doubt the world’s most powerful brand in quick service restaurant industry in terms of market share and brand value. Committed in quality, service, cleanliness, and value, McDonald’s must deliver its product to consumers with consistency and efficiency. This report will explore how McDonald’s corporation maintains its operational excellence through support from integration of sophisticated technologies. It suggests that to be able to apply technology in organization, value chain process must be defined and by then, information technology can be utilized to link each process that forms a comprehensive information system. It further explains how the use of Point of Sales (POS), Geographic Information System (GIS), online order system, and electronic payment will enhance effectiveness of decision making and supply chain efficiency.


Management Information System: McDonald’s case study 2010


About McDonald’s Corporation
In late 1948, two brothers, Richard and Maurice McDonald’s invented the “Speedee service” system that radically changed the method of preparing food. The system applies scientific management theory previously used in factory assembly line where workers are performing only one task to achieve greater efficiency (Schlosser, 2002). By 2009, McDonald’s had operated 32,478 restaurants in 117 countries and served 60 million customers per day (McDonald’s, 2009). There are many factors that contribute to this success. However, this report will focus on McDonald’s value chain model that delivers values from the suppliers to customers and how technology may help to facilitate the process. The next section will discuss McDonald’s business model, people, organization, technology factors, value chain model, and application of technology in McDonald’s value chain process.


Management Information System: McDonald’s case study 2010


McDonald’s business model analysis
Business model & business strategy In organization perspective, McDonald’s have grown with Q.S.C.V value which stands for Quality, Service, Cleanliness, and Value (McDonald’s, 2009).Quality is maintained by applying strict quality control and audit all production facilities and indirect suppliers to ensure product quality and consistency (Vignali, 2001). For example, meat for Big Mac must weigh 45grams, contain 20% fat, buns are 9.5-9.8 cm in diameter and 6cm in high (Vignali, 2001). Service must be fast and pleasant. Since 2009, McDonald’s has been aiming to serve most customers in under 90 seconds of taking their order (Dentch, 2009).Cleanliness of the restaurant is maintained through sending mystery shoppers to restaurants every quarter (Kruger, 2004; Vignali, 2001). And lastly, Value to customers is achieved through affordable price from supply chain efficiency and standardized operational procedure (Schlosser, 2002).

Franchise and business growth In 1954, Ray Croc (Milkshake-mixer salesman) convinced the Mac Brothers to give him the right to franchise McDonald’s across the nation (Schlosser, 2002). In just 5 years, there are 100 McDonald outlets opened in USA. In 2009, there were 6,262 restaurants operated by McDonald’s Corporation and 26,216 restaurants operated by franchisees (McDonald’s, 2009). McDonald relies on franchise to expand and gain crucial cultural experiences from the local franchisees. However, company’s operated restaurants were not neglected as it is essential to provide company personnel with restaurant operation experience (McDonald’s, 2009). Then, In order to ensure long term occupancy rights, helps to control related cost, and assists in alignment with franchisees, McDonald’s usually owns land and buildings or secures long term leases for both company-operated and franchised-operated restaurant (McDonald’s, 2009). In 2008, the company owned approximately 45% of the land and 70% of the...
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