Critical Success Factors in a Competitive Dairy Market

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McDonald’s Restaurant

STAT 2800

Survey of Operations Management

Project II

Dr. Rotimi Aderohunmu

By:

Stephanie Earley

Matt Kellond

Heather Kraich

Eddie Phillips

Rabab Sadeq

Thuy Van


Table of Contents

Introduction …………………..…………………………………………………….……3

Operations Competitive Strategy

        Competition Bases……….……………………………………………………..…4

        Strongest Priority………….………………………………………………………6

        Strategy Changes…………….…………………………………………………....8

Quality Management

        Speed……………………………………………………………………….…….11

Quality Inspection………………………………………………………….…….12

        The 5 P’s…………………………………………………………………………14

        Training…………………………………………………………………………..15

Raw Materials

        Arrival and Maintenance………………...……………………………………….16

        Grade “A” Beef and other Meats………..……………………………………….17

        Produce…………………………………..…………………………………...….18

        Restaurant Inspection…………………………………..……………………...…18

Forecasting

        Aspects of Forecasting……..………………………………………………….....19

Supply Chain

        Examination of Supply Chain………………………….………………………...22

        Supply Chain Efficiency….……………………………………………………...23

        Quality along Supply Chain….…………………………………………………..24

        Share Costs………………….……………………………………………………25

Summary…………………………………………...……………………………………25

Appendices        

Appendix A………………………..……………………………………………. 27

        Appendix B………………………..……………………………………………. 28

        Appendix C………………………..……………………………………………. 29

        Appendix D………………………..……………………………………………. 30

Introduction

McDonald’s, first started by Ray Krov, is now one of the most popular fast food restaurants across the world. They proudly serve more than 46 million customers in 59 different countries and have more than 30,000 different locations domestically and internationally (Food Service). The fast food industry is booming at a rapid rate, especially the healthy trend, with this in mind, McDonald’s has strategically plan to stay on top of their competitors by providing consumers with more options of healthy meals, cheaper prices, and better service. McDonald’s is competitive in many categories; examples are price, quality, management and employee training, other categories will be explained throughout the preceding sections. Consumers trust McDonald’s products because they use many of the same trusted brands that families buy at local grocery stores. The only difference is that their shopping cart is a whole lot bigger.

OPERATIONS COMPETITIVE STRATEGY

        McDonald’s Corporation competes in a challenging market segment by providing need-satisfying products to customers.  In this segment, ineffective competitors often fail without proper strategies (Kerin).  To sustain its viability, the McDonald’s corporation employs an effective competitive strategy to make it stand out against competitors such as other fast food restaurants.  McDonald’s competes on several bases, including cost, speed, and nutrition, their strongest priority is “making customers happy” (“McDonald’s Worldwide” 3).  The company recently made drastic changes to its process by introducing the “Made for You” system (Chase).

Competition Bases

Speed

        McDonald’s competes on several bases mainly to “make their customers happy” by providing speedy, affordable, and nutritious foods.  Through extensive market research and survey, the organization discovered that its customers desire speed as one of the restaurants’ top priorities.  Therefore, McDonald’s vision aims to “provide fast, friendly and accurate service” (“McDonald’s Worldwide” 5).  McDonald’s realizes that specific targets are necessary to measure the performance of speed, and continuously takes relevant measurements to compare actual performance with desired targets (measurements are detailed later in this report in the “Quality Management” section).  To achieve efficient service times, the company utilizes proven, standardized training processes for its employees and new drive-thru layouts to reduce service times.  Along with speed, McDonald’s also competes by offering prices at a low cost.

Cost

        To offer high quality products at low cost, requires efficient processes throughout the entire McDonald’s organization.  Once again, this goal is built into their vision statement when they claim that “We will be the most efficient provider so that we can be the best value to the most people” (“McDonald’s Worldwide” 5).  McDonald’s incorporates several avenues to provide great value to its customers:

  • One strategy that the company has employed for many years is the value meal.  The value meal allows customers to buy a sandwich, french fries, and beverage at a discount when purchased together.  McDonald’s restaurants offer from seven to twelve value meals, both for their lunch menu and breakfast menu.
  • More recently, McDonald’s began offering a value menu, consisting of many individual items costing only $1.00 each.  First tested in southern California, the value menu has proved to be very successful and has been since incorporated to the individual stores (Zuber 2).
  • Some individual franchise owners choose to offer daily specials of special menu items, such as “$0.39 hamburger Wednesdays,” or other similar specials.  Big Mac Mondays are a popular regional promotion.

Nutrition

        McDonald’s third main competitive base is nutrition. The organization understands that health trend is an increasingly popular trend therefore; the organization has recently focused extraordinary efforts to promote their new nutritious choices.  Although not specifically built into the organization’s vision, McDonald’s has already introduced many options to achieve this goal:

  • In the United States, “Go-Active” meals have been offered within the last few years.  These meals include a salad, bottled water, and a “step-o-meter” to help customers keep track of how many steps they take a day.
  • Other countries have seen similar healthy options. The United Kingdom saw fresh fruit bags, containing apples and grapes, as an alternative to french fries (“McDonald’s Worldwide” 12).
  • Not only does McDonald’s care about its customers, but it is also considerate of its employees’ health.  In Europe, the organization worked with external nutritionists to develop an “Employee Guidebook” which contains tips and nutrition information for healthy lifestyles (“McDonald’s Worldwide” 13).
  • McDonald’s has assembled their Global Advisory Council on Balanced Lifestyles.  This council consists of exercise & obesity specialists, environmentalists, and other professionals to ensure that McDonald’s takes appropriate steps in helping its customers achieve optimal health.
  • The company is also utilizing technology to their advantage.  The current McDonald’s website lets a user select any combination of menu items, place the items in the online bag, and conduct a nutritional analysis on their selections.  The user can break down the analysis even further than a menu item, down individual condiments, including ketchup, pickles, etc. (“Bag a McMeal”).

        Not only has the company introduced many steps to ensure nutrition, but it will strive to continue the trend toward nutrition.  McDonald’s plans to: add additional healthy menu options (fruits and vegetables); increase nutrition awareness among McDonald’s employees; conceive new ways to deliver nutrition information to its customers, and other actions (“McDonald’s Worldwide” 13).

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Strongest Priority

At McDonald’s, making customers happy is what our business is all about.  And we know it takes a lot to make that happen.  We work hard to provide every customer with a choice of meals and an experience that exceeds their expectations.”

        The preceding statement is the quote which introduces McDonald’s Worldwide Corporate Social Responsibility Report (2004).  Although the company strives to compete on several bases, their ambient goal is customer satisfactions.  They reach this goal through a variety of efforts.

        McDonald’s visionary goal is to continually improve their organization.  One example is the manager on duty ...

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