McDonaldsThis is an exciting and interesting essay to write for a number of
reasons. For one it\'s an honour to make a research on one of the most
profitable societies of the world, for second because the kindness of
McDonald\'s employees and the precision of McDonald\'s Web site, are
perfect sources for all kind of information that can help analyse
through Porter\'s value chain, all the aspects of its value creation.
In the late 1940s, Dick and Mac McDonalds were searching for a way to
improve their little drive-in restaurant in San Bernardino, California,
U.S.A.; they invented an entirely new concept based upon speed service,
low prices, and big volumes. Word of its success spread quickly, in
1952 they had more than 300 franchising inquires a month from all over
the country. McDonald\'s is now the largest and best-known foodservice
retailer and one of the two best-known and powerful brands in the
market. With more than 24,500 restaurants in 115 countries, some of
those operated by the company, some by franchisees or by affiliates
operating under joint-venture agreements. The global market potential
is still huge: yet on any day, even as the market leader, McDonald\'s
serves less than one percent of the world\'s population. The restaurant
chain plans to expand their leadership position through convenience,
superior value and excellent operations. The effort to increase market
share, profita! bility and customer satisfaction has produced high
returns to shareholders: a compound annual total earning of 21% over
the past 10 years. McDonald\'s vision is to dominate the world-wide
foodservice industry. Universal dominance means setting the
performance standard for customer satisfaction and increasing market
share and profitability through successful fulfilling McDonald\'s
convenience, value and execution strategies. A precise way of
considering McDonald\'s\' role of operations is through Porter\'s value
chain analysis. The Value chain breaks down the firm into its
strategically relevant activities, in order to understand the behaviour
of costs and the existing or potential sources of differentiation. A
firm gains competitive advantage by performing these strategically
important activities more cheaply or better than its rivals. For a
company which feeds some 38 millions clients every day, finding a
reliable quality supplies is a major factor for success. McDonald\'s has
solved the problem by making food supplies part of their success.
McDonald\'s distributors are strategically to be accessible to the each
restaurant and carry practically everything, from meat and potatoes to
lightbulbs. Coca-Cola, the right well-known drink, has been with
McDonald\'s from the beginning supplying beverages. McDonald\'s is
increasingly using its leverage to capitalise upon global purchasing
practices. New restaurants throughout Europe feature tabletops from
Belgium; chairs, floors and tiles from Italy; doors from Austria etc.
all using low-cost, quality suppliers. McDonald\'s \'new \'Made for you\'
preparation food system will allow it to serve hotter, fresher food.
When a burger is being created the bottom bun and the meat is heated up
together in the microwave, than the cheese, ketchup, mustard and
pickles are being put on and covered up with the other half of the bun.
The whole finished burger is then wrapped up into special paper and
market with the time. New cookers are being added which grill the
burger meat faster. Everything is then put in special storage cupboard,
which additionally holds the food warm for no more than 10 minutes,
after that the burger is eliminated. When the customer orders his/her
food is straightaway served. The quest for variety to satisfy the
growing number of customers was attracting ultimately led to new items
being added to the Classical menu (hamburger, cheeseburger, milkshake
and coffee, soft drinks and fries). Now there is a wide range of
products that have been introduced throughout the years: Quarter
Pounder (1972), Chicken McNuggets (1983), Egg McMuffin (1973), Big Mac
(1963), etc. In addition many new products are always under development
in McDonald\'s test Kitchens for evaluation in selected markets. The
menu is often enchanted with promotional products to add variety on
limited time bases. The group constantly examines their menus around
the world in light of changing customer\'s taste, as well as local
customs. In addiction to traditional favourites, customers will find
special menu offerings in some countries outside the U.S. Examples
include the popular Teriyaki Burger in Japan and vegetable Nuggets in
India. Also in a large Muslim populations, such as Malaysia a! nd many
Middle East countries, their menu is Halal, prepared in keeping with
Muslim guidelines. Research indicates that customers feel a unique
emotional bond with the chain, the idea of a visit to them triggers a
feeling of anticipation and excitement unlike in any other restaurant.
Customers come to McDonald\'s for signature products they can\'t find
anywhere else. In addition many families visit the restaurants because