A Case Study On McDonald’s Supply-Chain

Mcdonald's Supply-Chain
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In 2015,  when Steve Easterbrook assumed control as CEO, that was time corporation head of MacDonald was expecting insider and outsider things were about to change.

Since MacDonald inception in 1966 by Ray Kroc, the company is experiencing extraordinary growth and success in the QRS industry; sometimes growth was declined as the company was trying to adopt environmental change especially in the year 2014. This was most lull period for the company when domestic revenues were decreased by 2.4% and net income was dropped down by 15%. Analyst of that time have referred, the company might be present on the wrong side in history as a younger customer was opting healthier food. Meanwhile company was trying harder to conquer the challenges it faced in its sector

MacDonald is a world-leading limited menu restaurant characterized by operations speed.  Currently, it has 33,000 restaurants in 118 countries serving about 67 millions foodies every day. Their ways of serving healthier and tastier food with creativity also bring competitive advantages for it. As per outlook Mr Easterbook, MacDonald has always been a progressive burger company and for it, selling good and healthier products is their priority. But the changes we have highlighted above don’t go with the statement produced by Mr Easterbook during earlier times of MacDonald Success. Henceforth having a complete understanding of MacDonald’s supply chain is becoming equally important as serving sustainable services. In this article with the help of assignment help UK experts, we are going to put forward some uncover dimension of MacDonald supply chain management that is the backbone of company huge success in 2020.

Food Retail Industry

It’s been in news since past years, MacDonald announces huge gain in marketing share because of sustainability. The impact of this staggered around- the company has sold more than 40 million Quarter Pounders in Q1 in compare to last year which is about 30% of the total sales of the same year. Such a sizeable growth is quite amazing for Marion Gross supply chain officer of North America MacDonald Branch (Toffel, 2020).

The domestic market of MacDonald is extensive afterall the company has more than 14000 restaurants worldwide, but the success of the company validated with a remarkable performance of supply chain management.

Gartner Inc. in 2018 moved to MacDonald into Master Category as it is sharing sustainable supply chain networks in the past decade and join bigger giants like Apple, P&G and Amazon.

As per Kelso, 2019 perspective, The key to MacDonald’s success is highly skilled orchestration among strategic suppliers network and thousands of companies owned its franchise.

Despite this, as said by management assignment writer, the rapid spread of mobile technology created complex environment, that is MacDonald needed to join the online conversation platform. However, Macdonald has taken this into consideration and started responding to customer feedback and currently allowing prompt services via distinctive food channels.

All Day Breakfast Case

MacDonald’s has 36,899 franchised stores in 120 countries which have shown significant growth of 16% till 2016. McDonald’s owns long term or short term lease under franchise agreement of land and buildings. These franchises provide initial capital for seating, décor via investing in their business. In a report, McCorkle, 2019 has directed the actual revenues of the company through company store and franchise. According to this, 63% of the revenues in 2014 company generated from the company-oriented store and 23% from franchise and rent. Henceforth it can be deduced, the company success is largely depended on store profitability (Vitasek, et.al, 2016).

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MacDonald all-day breakfast proposal has been seen as a key proposal that helped management to drive competitive advantages. The demographic of the many countries might seem stagnant but the US demographic is always changing. The company positioned itself to target younger market, however, the company still need some amendments to change its policy to attract a younger customer base.

Source- Statista 2020

In the recent report produced by Statista, 2020, it has been seen, McDonald’s is the most acknowledge food supply restaurants worldwide having estimated brand value worth $129.3 billion US dollars. Similarly in the year, 2020, star bucks amounted 47.48 billion US dollar which is comparatively lower than MacDonald’s. The way the company identified sentiments and culture using multi-layer supply chain networks definitely brings out effective outcomes in the coming years.

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Multilayered Supply Chain Network

The first restaurant of MacDonalds was established in Des Plaines, Illinois, the USA in 1955. Till then Kroc ultimate desire is to gain maximum profitability from its business venture. 

It would be so difficult to find out partners who will be connected with business till longer period. 

In matter with dealing science, There is no doubt MacDonald’s does have a secret sauce for the recipe. With long term unwavering belief on everyone and considered as part of MacDonald System, Ray Kroc tried to form precedent of loyalty and trust. 

With the help of online assignment help Australia experts, we have drawn five supply chain success factor of MacDonald 

  • MacDonald’s Vision

As per Kroc’s point of view, System success is attributed to business owners, employees and suppliers. Due to which MacDonald has become able to set standards of food quality and assured safety. The customer knows they will get the same food either its is US or Russia. The recipe for each food supplements will be same as its taste.

  • Outcomes Focus Not A Transaction

Kroc rules second greatly influence the way success is seen within the business. As it is said by Kroc, their foremost priority is not about only conducting business even building a transactional relationship with long term suppliers who will help a company to drive an outcome and gain maximum advantages. The suppliers accountable to meet MacDonald’s Standard 

  • Focusing On What Not On How

MacDonald’s is very managing when it comes settling tone with suppliers as a company always avoid any form of micromanaging. In the view of Kate et.al, 2012, MacDonald gives huge importance to the sustainable cost and ensures how it can improve things in a system in the long run

  • Agree On Measurable Outcomes

MacDonald plans to win is strategic tactics that help all the system members to meet the evolving needs of the customers. As its customer-focused plan suggested to become better, not bigger, it is commonly said, the company tries harder to adapt to the country culture for providing its services.

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  • Pricing Model

The pricing model is based on the three-legged stool where company ensure MacDonald owners suppliers, employee and franchiser must be profitable in the course of business expansion. MacDonald never was in news for its pricing policy as it aims to give competitive advantages to supplies and its other tool members according to the market price.

Conclusion

In this blog, we have tried to enumerate each aspect of MacDonald’s supply chain success by providing enough evidence on MacDonald’s strategic plans. Through reviewing journals and renowned newspaper, we have deduced MacDonald is the world-leading limited menu restaurants characterized by operations speed and supply chain networks. In the next section, we have defined MacDonald’s plays in the Foodservice industry where we came to know the company announced a huge gain in marketing share because of sustainability and competency. Aftermath we have discussed all-day breakfast case of Breakfast and briefed how the company owns long term or short term lease under franchise agreement of land and building. There we deduced MacDonald’s success is highly skilled orchestration among strategic suppliers network. Aftermath in the next segment we have drawn statistics depicted brand value of the company among the top ten food industry. At last, we have enumerated multilayered supply network of the company signifies system success, is attributed to business owners, employees and suppliers.

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References

Jones.M(2020). Will new leadership curb McDonald’s digital momentum?. Available at-

https://techhq.com/2020/02/will-new-leadership-curb-mcdonalds-digital-momentum ta  [Data Accessed on 18, January, 2021]

Kelso.A(2019). Customers Are Noticing’ McDonald’s Significant Supply Chain Changes. Available at-

https://www.forbes.com/sites/aliciakelso/2019/07/09/customers-are-noticing-mcdonalds-significant-supply-chain-changes/?sh=323f99df5962 [Data Accessed on 18, January, 2021]

Kenneth C. McCorkle(2019). McDonald’s All Day Breakfast Launch: The Strategic Value of McDonald’s Supply Chain. Available at-

https://agribusiness.purdue.edu/wp-content/uploads/2019/08/1-mcdonald-s-case-study-cs6-2.pdf [Data Accessed on 18, January, 2021]

Sharma, K. (2013). A case study on McDonald’s supply-chain in India. Asia Pacific Journal of Marketing & Management Review ISSN, 2319, 2836.

Statista(2020). Brand value of the 10 most valuable quick service restaurant brands worldwide in 2020(in million U.S. dollars). Available at-

https://www.statista.com/statistics/273057/value-of-the-most-valuable-fast-food-brands-worldwide/. [Data Accessed on 18, January, 2021]

Toffel, M. W. (2015). McDonald’s Corporation: Managing a Sustainable Supply Chain—From Amazon Soya to Cage Free Eggs.

Vitasek, K., Manrodt, K., & Kling, J. (2012). McDonald’s Secret Sauce for Supply Chain Success. In Vested (pp. 119-152). Palgrave Macmillan, New York.

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