CHUPTERL Managment Sete Teor. andPacice ED Interview two local business managers or entrepreneurs and ask them how they learned about managing. Ask what kind of books they might have read on management (e.., textbooks or popular books). Here are examples of management books: Gary Hamel and © K Prahalad, Competing for the Future; Michael Hammer and James Champy, Reengineering ‘the Corporation; Chaties Handy, The Age of Paradax; john P. Kotter, The New Rules: How t0 Succeed in Today's Post-Corponate World: Peter M. Senge, The Fifth Discipline. W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy, Probe to what extent these books have helped them to manage. You may also find it interesting to read one of the best-selling, books on. ‘management and mention it in the class discussion, Interview two public administrators and ask them how their job differs from that of business managers. How do they know how well their department, agency, or organization is per forming since profit is probably not one of their criteria for measuring effectiveness and. ‘efficiency? Do they consider management an art of science? inwahcoeue Review tivee of the following websites for current topics of management www:businessweek.com, www.economist.com, www-fortune.com, www forbes.com, Wworw industryweek com, http//public.wsjcom/home.himl, waw hsp harvard.edu/produets) hibriindex hin, hap://mitstoan mit edu/sm/index hem! Read the cover stories of Business Week, Fortune, and The Economist on the web (www.businessweek com, ww. fortune.com, www.economist.com) and identify any section in this book that relates to these stories. CASE McDonald's: Serving Fast Food around the World” Kroc opened the first McDonald's restaurant in 1955 in the United States. He offered a menu of high-quality, moderately priced food served fast in speiess soroundings ks QSCAV (quay, service, cleanliness, and value) was ht. The chain expanded into “every ‘tate in the nation. By 1983 it had more than 6,000 restaurants in the United States, and by. 1995 it had more than 18000 resturants tn 89 countries, located in six continents In 1995 “one, the company bu 2400 reaurants, and by 2007 had more thanks 31.000 resturants “119 counties. In 1967, McDonald's opened its ist restaurant ouside the United States Canada, Since ‘then, is itemational growth accelerated. In 1995, the “Big Sia” counties that provided abot 480 percent of the itemational operating income were Canada, Japa, Geran, Aust, Fance, and Briain. Ye fastfood has barely touched many culties. The opportunites forBFeal, a5 99 percent of the world population are not yet McDonald's ‘China, with 2 population of 1.2 billion people, there were only 62 MeDonald's restaurants in 1985. McDonald's vision is to be the major player in food services around the world. “In McDonald's maintains a small percentage of restaurant sales but contands a large share of the fastfood market. It took the company 14 years of planning before it opened a Fesaurunt in Moscow in 1950, But the planning paid off. After the opening, people were ‘Sanding in line for up to two. hours for a hamburger. t has been said that’ McDonald's festaurant in Moscow altracts more vistors (ot average 27,000 dail) than Lenin’ mausoleum, {about 9,000 people), which used to be the place to see. The Beijing opening in 1992 attracted some 40,000 people to the largest (28,000 square foot) Is location where some 800,000 pedestrians puss by every day. ‘Food i prepared in accorthince ‘Anb i : $290 US. Big Mac: Chile $2.18, Euro area $3.28 (weighted average of member countries), Hong Kong $1.54, Japan $2.33, Mexioo $2.08, Peru $2.57, Singapore $1.92, and Thailand $1.45, Bi tena, afriional menu has been surprisingly. successful. People with diverse dining ra le a costly experiment, “ars atic Noa aye WSS da BY Wilda ‘ant good taste, fast and friendly service, clean surroundings, and quality. To attain quality, so. Called quality assurance centers are located in the United Sates, Europe, and Asia. In addiion, traning plays an important part in customer service. Besides day-to-day coaching, Hamburger universities in the United States, Germany, Britain, Japan, and Australia teach the necessary skills Monat en the in viking 100 pace cscone sus. ereing tht MeDonald's was one of the fist restaurant panes aaa eo any restaurants they are abo enced wh crayons and oe aurea ann the adult market. With hea with generally aging stakes aim at wy eb as been Sal Oat MeDoras ll spend $0 bburgen, the company introduced Arch (on potato‘lower bun with lettuce, onions, ‘ketchup, tomato slices, American cheese, grainy mustard, and mayonnaise. Although McDonaldCHAPTER 1 Management Sane, Theory and Pcie ET “adult burger a great success, a survey conducted five weeks afier is } mixed results. ‘promise the same busic menu and QSCAV in every restaurant. Is ‘cooking procedures, and kitchen layouts are standardized and stitly revoked the first French franchise because the franchisee failed to meet pservice and cleanliness, even though their restaurants were highly profit- < its expansion in France, Gare run by local managers and crews. Owners and managérs auend ty near Chicago or in other places around the world to team how to Testaurant and maintain QSCRV. The main campus library and modem (which include simultaneous translation systems) are the envy of many ds opened in Moscow, a one-page advertisement resulted in 30,000 4,000 people were interviewed and some 300 were hired. The pay is ‘than the average Soviet salary {consistent products by controlling every stage of the distribution. Re centers purchase products and distribute them to individual restaurants. The focal suppliers ifthe suppliers can meet detailed specifications. McDonald's me concessions to available products. For example, itis cificult to introduce ‘Burope because of special soil requirements, s essentially the same competitive strategy in every country: be first in a “its brand as rapidly as possible by advertising very heavily, New restau ec with a bang. So many people attended the opening of one Tokyo restaurant sed the strect to vehicles. The strategy has helped McDonald's develop. a in the fast-food market, even though its US. competitors and new local dy enter the market ad ‘campaigns are based on local themes and reflect the different envi- ‘where burgers are a snack, McDonald's competes against confectioneries restaurants. Many of the charitable causes McDonald's supports abroad by its local restaurants Ssructures take a variety of forms, with 66 percent of the restaurants & The development licenses are similar to franchising, but they do not require Joint ventures are undertaken when understanding of the local environ Tmportant, The McDonald's Corporation operates about 21. percent of the fis has been willing to. relinguish the most control to its Far Eastem any restaurants are joint ventures with local entrepreneurs, who own 50 ofthe restaurant di South American restaurants. are generally company-operated or franchised ‘re many affiliates, of joint ventures, in France). Like the US. franchises, ‘are allowed to expetiment with their menus, In Japan, hamburgers are sthey are considered a snack. The Quarter Pounder does not make much sense "metric system, s0 It is called a Double Burger. Some German restaurants serve festaurants serve wine. Some Far Eastern McDonald's restaurants offer Tn Canada, the menu includes cheese, vegetables, pepperoni, and deluxe these new items must not disrupt the existing operation fs success, McDonald's faces tough competitors, such as Burger King, Wendy's, Chicken (KFC), and now also Pizza Hut. Moreover, fast food in reheatable‘satisfy the evolving needs of its market, as well as 10 maintain its competitive advantage” Due to the growing popularity of Starbucks and coffee shops in general, McDonald introduced MeCafé to capitalize on this latest trend. McCafé is a concept developed by MeDonald’s Australia in 1993. As of the end of 2003, there were over 600 McCafé worldwide In 2006, MeDonale’s also introduced its "Forever Young” brand by redesigning all of their restaurants, the first major redesign since the 1970s. The new design included the traditional ‘MeDonald's yellow and red colors, but the red will be muted to terra cotta, the yellow will tum golden for 4 more “sunny” look, and olive and sage green will be added. To warm up their look, the restaurants will have less plastic and’ more brick and wood, with modem hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on the walls ‘The new restaurants will feature three new different areas: "3 ‘© The “linger” zone will offer armchairs, sofas, and! Wi-Fi connections, a concept introduced by Startuicks. '* The “grb and go” zone will feature tall counters with bar stools for customers who eat alone; Plasma TVs will offer them news and weather reports * The “flexible” zone will be targeted toward families and will have booths featuring fabric cushions with colorful patterns and flexible seating. . Finally, the company has also made an effort to offer @ wider range of meni options for the health conscious consumers. McDonalds is now offering a range of high-quality foods that can fit into a balanced diet, from salads, to wraps, to yogurt based desserts, _The company is conscious of the growing competition from its rivals and the changes in ‘ends ofits consumers, therefore itis crucial for the company to keep innovating and introdue- ‘ing new altematives in order to maintain and attract old and new MeDonald's lovers. Questions 1. What opportunities and threats did McDonald's face? How did it handle them? What ines tee eed y “5 > Petre MeDenals cee the Broan mkt, few people Delve ht ft od cold be successful in Europe. Why do you think succeeded? What strategies did it follow? Kow did these differ from its strategies in Asia? ‘4. Should McDonald's expand its menu? If you say “no”, then why not If you say “yes, what kkinds of products should it add? 5. Why is McDonald's successful in many countries around the world?