Operations Strategy and Competitiveness

Chosen Business: McDonald’s

Brief History of McDonald’s

• The first McDonald’s restaurant was opened in 1940 by brothers Maurice (“Mac”) and Richard

McDonald in San Bernardino, California. It originally was a drive-in that offered a wide selection
of items.

• In 1948, the brothers decided to revamp the business, and after a three-month renovation, a
newly envisioned McDonald’s opened.

Competitiveness

• Their customer service is made faster because a kiosk is used so that our customers can
order immediately without compromising the quality of the service.

Competitive Advantage

• McDonalds serves quality food and drinks that makes it a standard fastfood restaurant.
To achieve a cost advantage, the company makes extensive use of economies of scale.
Mcdonald’s is known for providing quick customer service without sacrificing quality.

Key Purchasing Criteria

• Price – They prove to affluent at using cost leadership pricing strategy by offering meals at
low prices.

• Quality – By doing the right and proper procedure and they say that “If not right, don’t serve.”

• Variety – They have a high degree of variety to choose what suits their choices.

• Timeliness – The McDonald’s Company focuses on providing tremendous customer service

and best operations facilitated by the employees.

Order Qualifiers vs Order Winners

• Order Qualifier – The most in-demand menu because of its quality is BigMac.

• Order Winner – The most in-demand menu because of its cheaper price is Chicken Fillet
Meal.

Competitive Priorities

• Cost – They based it on the ups and downs of the products. They make sure that their
customers can afford their prices.

• Quality – They are strict about temperature and time control throughout the entire
production process and the compliance with microbiological standards.

• Flexibility – They need to focus on improving the quality of its core products.
 • Delivery – Mcdonald’s is working on marketing initiatives to encourage large delivery
orders.

Core Competency

• McDonald’s best core competence is its ability to standardize its food service and
processes. Every McDonald’s offering tastes and looks exactly the same regardless of its
geographical location or outlet.

Strategy
Operations Strategy - Yes, because the crews and the manager are well-trained in the process
of making the production of foods and drinks of high quality.
Corporate Strategy - Growth strategy is one of their strategy to corporate the products and
services. Because aside from tasting food offers, McDo introduce or add new features to increase
the product line to keep up with their competitors.
Business Strategy – They use a value-based pricing strategy and strive to provide value to its
customers across the menu.
Functional Strategy - Coordination is the function of management which ensures that different
departments and groups works in sync. There is called " unity" among the employees, groups and
department. That's because McDo are very friendly to their valued customers.

10 Critical Decisions

1. Design of Goods and Services – McDonald’s goal is this strategic decision area of operations
management is to provide affordable products.

2. Quality – The company aims to maximize product quality within constraints, such as cost and
price limits. McDonald’s uses a production line method to maintain product quality consistency.

3. Process and Capacity Design – McDonald’s process and capacity design is centered on efficiency
of cost-minimization that supports the company’s strategies.

4. Location – McDonald’s located inside of University of Pangasinan. There are always lots of people
especially students.

5. Layout Design and Strategy – McDonald’s uses practically for this decision are of operations
management. The strategy involves maximizing space utilization in restaurants and kiosks, rather than
focusing on comfort and spaciousness.

6. Human Resources and Job Design – McDonald’s human resource strategies involve training for skills
needed in the production line in restaurant kitchens or production areas.

7. Supply Chain Decisions – The firm’s global supply chain supports its various locations around the
world. Mcdonald’s has a strategy of supply chain diversification for this decision area of
operations management.

8. Inventory – By the end of month we conduct inventory checking so that they know what raw
materials are lack of stocks.
9. Scheduling – They always make sure the production are match with the orders of the customers and
serve it on time.

10. Maintenance - They always check the equipment if it is working well. They make sure that
every equipment is clean before and after use.

Quality Based Strategies - Mcdo has quality that always satisfies customers one of these is having a
budget friendly food offers and having simple treats especially for the kids.
Time Based Strategies - Mcdo makes sure that every crew are always prepared. Such there are
some food offers that are ready to serve and also make sure that their foods are prepared to have
a time saving cooking.