Running head: CHAPTER 4.2 DISCUSSION QUESTION
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Chapter 4.2 Discussion Question
Student’s Name
Institutional Affiliation
CHAPTER 4.2 DISCUSSION QUESTION
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Chapter 4.2 Discussion Question
The history of McDonald’s dates back to 1940 when Richard and his brother Maurice,
began operating a single unit restaurant in California. With the assistance of Kroc, the company
ventured into a franchise program. Fifteen years after the inception of the mother restaurant, and
throughout the partnership deal, McDonald’s was established; with Kroc serving as the
company’s chief executive officer (C.E.O.). Since 1955, the company has recorded substantial
growth, and it presently operates in approximately 121 countries (Rothaermel, 2017).
McDonald’s success story provides valuable lessons to the management of existing and new
businesses. This paper performs McDonald’s value chain analysis and highlights some of the
changes that the company has made to its menu.
The company’s principal activities encompass the inbound and outbound logistics, with
the former covering licenses, operations, and the payment of the rents by the franchise
businesses. McDonald’s works collaboratively with the franchisees by allowing the franchise
restaurants to establish new restaurants in the company’s owned lands (Rothaermel, 2017).
Besides, the franchise businesses operate independently, and they account for 80% of the total
restaurant stores that are part of McDonald’s. Conversely, the latter includes the provision of
services along the line of drive-thru and sit-down without the option of the door-to-door delivery.
McDonald’s operates based on other support activities that also include sustainable
business’ infrastructure, and the use and application of technology to promote the firm’s
objectives such as the expansion of the number of the franchisees. As a business that continues to
invest in technology, the firm’s IT systems ease the capacity of the firm to track procurement
operations and respond to clients’ concerns (Rothaermel, 2017). Currently, the company is in
partnership with Fujitsu to implement a project that will culminate to the installation of the point
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of sale (POS) systems. The essence is to build an IT system that improves the delivery of
services.
McDonald’s continues to build its brand by adding value to the services it provides to
customers. For example, it offers coherent and consistent services in the sense that the foods that
various McDonald’s stores provide are the same. Still, the whole company operates on the idea
of the convenience, and recently, some of the restaurants it owns started running for 24 hours in
various branches across the country (Rothaermel, 2017). This way, customers can access
McDonald’s products and services at any time. Furthermore, the business recently began
allowing customers to pay for services using mobile payment solutions, and it particularly
encourages clients to use the Quick Mac application to order and pay for their meals.
As a firm that faces competition and strives to make profits, McDonald’s promotes cost-
management initiatives. Ideally, the firm serves a sizable market, and it, therefore, buys in bulk
to benefit from the opportunity costs. Also, the company works based on the established
relationship with the supplier, and it pays for supplies as soon as the supplier delivers goods
(Dixit, 2017). Indeed, such a measure is vital in the sense that it minimizes the financial pressure
the firm may face when it delays paying for the supplies.
Finally, McDonald’s recently started making changes to its menu by introducing health-
friendly options including the fruit smoothies. It is evident that the changes have had a
significant impact on the improvement of the customer experience considering that the company
introduced red leaf lettuce salad following complaints from clients that the iceberg lettuce had
not health-benefits. Since the adoption of the changes, the company has managed to attract new
clients which reflect in the rise in the sales (Miller, 2014). The company continues to record
growth in the revenue following the introduction of the healthy menu program.
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References
Dixit, D. (2017). Global Marketing Strategies of McDonald’s Corporation (with Reference to
India and Russia). International Journal of Applied Research, 3 (1), 870-875. Retrieved
from http://www.allresearchjournal.com/archives/2017/vol3issue1/PartL/3-1-133-
625.pdf.
Miller, R. L. R. (2014). Business law: Text and cases : the first course. Stamford, CT : Cengage
Learning.
Rothaermel, F. T. (2017). Strategic management concepts (Custom 3rd ed.) New York, NY:
McGraw-Hill.
