Executive Summary
McDonald’s company is the largest international fast food restaurant with more than 30,000 restaurants in 121 countries globally. Affiliates, twenty-eight operate Fourteen percent of the stores by the company, and franchisees operate fifty-eight percent. The company was founded in 1955, and it serves over 70 million customers in a day (Ang, 2017). The company has expanded into foreign markets through franchising and joint ventures. It uses a centralized international structure in its operations to ensure top quality services are offered. Its operating strategy relies on high consistency, relationship building with its franchises and vendors innovatively to enhance the operating system and, the introduction of new goods.
Table of Contents
Consumer value propositions. 3
Impact of Blockchain in Supply Chain Performance. 6
Relationship Between Service Quality and Profitability. 8
Challenges Faced by McDonald’s Restaurant. 8
Slow and Inaccurate Services. 9
Consumer value propositions
Delivering and creating a value proposition is a vital issue that McDonald has considered in its planning strategies. Izquierdo-Yusta, et al. (2019), stated that currently, there is a high level of competition and profound changes in the market and technology, making it hard for a company to deliver quality products hence the need to focus on delivering value that customers require. The difference in the environment and customer experience also changes the value proposition that the customers need. McDonald’s restaurant has invested in marketing research to gain deep customer insights to shape their development plans. Value can be created from different elements such as price, location, and quality. Besides, companies are responsible for maintaining value based on their shareholders and strategies.
Website Establishment
McDonald’s company has recently developed a website that links management and consumers. The restaurant has been able to post all its information on its official website to assist consumers. When consumers order goods, they are tracked using the website hence ensuring the secure delivery of goods they requested for. Windler, et al., (2017, pgs. 173-186), argued that all shipping and the cost of products is posted on the website making it easy for customers to pay and order goods of their desire. Also, through the website, consumers can enquire about a product and also given immediate feedback when they need clarification about an item. This move has helped the management to efficiently communicate with their customers hence facilitating business to grow and expand. The website has enabled the company to reach a broader market hence outdoing its close competitors.
Pricing of commodities
For the company to be able to reach a large number of customers, they have decided to cut down on the prices of their products. Many of their competitors used to offer affordable foods; hence they attracted a large number of consumers. This has also made McDonald’s company lower its prices as its competitors to attract more customers. Many people globally are middle and low class; therefore, they can afford only well-priced products hence the need for the company to price its commodities well (Shamar, et al., 2018, pgs. 446-456).
Location
McDonald’s company is strategically located close to its customers to offer commodities to them. (Priem, et al., 2018, pgs. 22-31). Many of its stores are centrally located in cites that have a well-developed transport system to enhance the faster delivery of commodities. Furthermore, in large cities, there are a high number of populations that provide a ready market for the foods offered by the restaurant.
Product Diversification
McDonald’s offers a wide range of products such as hamburgers, cheeseburgers, French fries, among other products (Namin, 2017). The variety of products provided provides a wide range of commodities for customers to choose from. For example, in India, they don’t eat beef; therefore, the firm introduced the maharaja burger, which was liked by many Indians hence capturing a wider market. They have also introduced kids’ dresses, toys, and captivating things for kids so as diversify the chances of risks occurring. Many kids visit the restaurants and enjoy the services offered hence providing revenue to the firm.
Outsourcing
The organization has opened over 100 stores in many different countries and employed many workers to reach a large number of consumers. The workers are paid well to ensure they provide quality goods to their customers. Many people are attracted to high-quality products. Customers are served fresh, affordable foods and of good quality, making them remain loyal to the restaurant (Meredith and Shafer, 2019).
Process Map for McDonald
Impact of Blockchain in Supply Chain Performance
Blockchain technology is regarded as a tool for sustainable growth in the supply chain. The strategic partnership between the buyer and supplier is vital to facilitate the success factors in supply chain management. Rapid joint decision making and sharing of information are essential elements in the supply chain (Karamchandani, et al., 2019). Recently, there is increased use of money, such as bitcoin, which has increased the usage of money both in online and offline markets. This money is based on blockchain technology. Blockchain has assisted in information transparency and immutability to support reliability and sustainability, which are needed for supply chain collaboration. McDonald’s restaurant ensures all participants see relevant information, including transaction history. The information immutability prevents data and information collected and stored by the firm from being modified or deleted. This information may contain essential files that are vital to the operations of the company. Competitive advantage cannot be easily achieved without the use of technology in the production, distribution, and marketing of commodities.
Blockchain is a database system that distributes and records transactional data and is secured by cryptography. The restaurant serves 69 million customers daily in over 36000 restaurants across many countries (Kshetri, 2018, pgs. 80-89). This is achieved through maintaining a sustainable supply chain management. The company’s long-term supply chain strategy created by Ray Kroc has played a significant role in its success. Many of its suppliers have worked with the company for a more extended period. This has assisted the restaurant with nature trust and has supported the firm in working closely with suppliers and create innovations and inventions. The company tracks its products and shares data with its franchise owners and partners. Tracking ensures the safety of goods while on transit hence meeting consumer’s needs and wants.
Blockchain enables trustless networks allowing firms to transact without physical contact. Blockchain can validate the identities of individuals by using digitally signed documents to help monitor the transaction process. Francisco and Swanson (2018, pg. 2), stated that business is done online and the goods transported to the premises of the company without physically seeing each other. This process assists in boosting the growth and efficiency of the supply chain since the manual way is tiresome and time-consuming. Furthermore, it ensures consumers receive a steady flow of goods from the restaurant, which meets their requirements. Therefore, nanotechnology has impacted positively in supply chain performance and should be embraced by several companies.
Relationship Between Service Quality and Profitability
With the adoption of blockchain in supply chain management, the service quality provided by the restaurant has increased hence increasing profitability. The Company and its franchisees purchase food, packaging, equipment, and other goods from numerous independent suppliers. The Company has established and enforces high-quality standards and product specifications (Heifa, 2019, pgs. 83-90). The Company has quality centers around the world designed to ensure that its high standards are consistently met. The quality assurance process involves not only ongoing product reviews but also on-site supplier visits. A quality leadership board, composed of the Company’s technical, safety, and supply chain specialists, provides global strategic leadership for all aspects of food quality and safety. Besides, the Company works closely with suppliers to encourage innovation, assure best practices, and drive continuous improvement. Leveraging scale, supply chain infrastructure, and risk management strategies, the Company also collaborates with suppliers toward a goal of achieving competitive, predictable food, and paper costs over the long term. Independently owned and operated distribution centers, approved by the Company, distribute products and supplies to McDonald’s restaurants. In addition, restaurant personnel are trained in the proper storage, handling and preparation of products
Challenges Faced by McDonald’s Restaurant
McDonald’s management is faced with problems since the replacement of the CEO of the restaurant. Blockchain can deliver huge savings by improving the operational efficiency of a company. Besides, challenges arise with emerging technology.
Gaining Industry Adoption
This is one of the most critical challenges that determine the success of blockchain technology. In the supply chain, a strong network impact is caused as stakeholder acceptance exceeds a critical mass. When more and more players invest in the supply chain, blockchain becomes increasingly essential and grows as a business-standard. However, at first, having stakeholder participation would be challenging due to varying degrees of digital preparation and the initial need to understand the shared advantages of blockchain-based cooperation. This can be particularly difficult as there are existing procedures, rules, and legislation regulating various facets of the sector because customers would experience costs of transitioning from existing structures to merging with modern systems to practices.
Lack of Transparency
McDonald’s company has been faced with reputational challenges that arise from a lack of transparency. Some few years back, an ill-judged illegal case saw the restaurant acting against a small environmental group. The movies of super-size me said that the company was promoting bad health, poor ecological practice, and food that was disgusting. There are many operations in the restaurant, which may be harmful to people’s health, yet they do not disclose such information (Dixit, 2017, pgs. 870-875).
Slow and Inaccurate Services
The fast-food restaurant, through its CEO, said it introduced many items last year, such as Wraps. They slowed down the services offered by the restaurant and inaccurate orders. The menu of the restaurant was a bit complicated, and it did not serve a large number of people due to the lack of variety of products. Its rivals continued offering high-quality, affordable services hence attracting more customers in their company compared to McDonald’s.
Increased Competition
The restaurant is faced with stiff competition from other fast-food restaurants such as Wendy’s Burger King and Taco Bell. According to Chen, et al., (2020, pgs. 1-27), the restaurants have invested more in customer service and menu variety. They provide a variety of goods at affordable prices hence attracting more customers to the company. Furthermore, they provide high-quality customers as compared to their closest rival, the McDonald’s company. Good marketing strategies have assisted the company in reaching a wider market and outdoing its close competitors. Therefore, for the company to become successful, it should consider reorganizing its plan and also offering a higher wage rate to employees to provide high-quality services to customers.
Recommendations
To improve customer service, McDonald’s should train its employees. Training is essential. Being ignorant of the employees’ occasional training is cutting off a necessary element in the organizational working formula to achieve greatness. McDonald’s should train its employees to inform them of the importance of quality and customer service. Customer services cannot be improved through advertising; it is enhanced through daily improvements to ensure employees are keen and up-to-date in the company’s activities. Products should have higher quality and be enhanced with new and fresh additives. McDonald’s should aim at standardization and customization of its menu to attract and connect with more customers in different markets.
To be competitive, McDonald’s should improve the viability of its business through continued global expansion, particularly in potential markets (Ceil, 2017). Likewise, the corporation can decrease risks through the development of new products and exploring new industries associated with fast-food restaurants. McDonald’s should have international strategies giving attention to large cities of the world to attract more customers. McDonald’s restaurants are very few in Asian potential markets. For instance, Japan is the only country that has its restaurant in the whole of Asia. Compared to China, which is known as the big world market due to the high population, China is the ninth country that has many McDonald’s restaurants with about 900 in total. In contrast, the U.S has approximately 1500 restaurants. Thus, the company should develop more restaurants in Asia to improve its competitive advantage.
To empower franchisees, Mcdonald’s should embrace Self-service tools for local marketing. Since franchisors are not enabled to deliver direct individual help, there is a need to allow franchisees to through online marketing solutions as a self-service local marketing tool. Franchisees will be able to do online marketing, both locally and globally, through reliable brand identifications. The company should also have a sound marketing system to enable franchisees to do marketing anytime, such as through emails, customer events, or menu items. They should ensure that brand sections are limited to ensure the provision of franchisees with customized information that serves their interests (Banerjee, 2018pgs. 69-98). To provide timely information to the franchisee, McDonald’s should incorporate social media in its operation. This will make communication easy and faster. The sharing of information by franchisees will be less costly and convenient
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