how has cometition to macdonalds changed over time ?

what are the main operations performance objectives for macdonalds?

draw an operations strategy matrix for macdonalds ?

here is the link if its not clear

https://books.google.ae/books?id=vA5MDwAAQBAJ&pg=PT85&lpg=PT85&dq=how+has+competition+to+mcdonald%27s+changed+over+time+?+what+are+the+main+operations+performance+objectives+for+macdonalds?+draw+an+operations+strategy+matrix+for+macdonalds+?&source=bl&ots=F0_HCuJn1e&sig=ACfU3U08t6opKMRx-Ru1kNh0kB0PQ2vreA&hl=en&sa=X&ved=2ahUKEwiMyZyWh4PoAhVEz4UKHROsABQQ6AEwAHoECAMQAQ#v=onepage&q=how%20has%20competition%20to%20mcdonald's%20changed%20over%20time%20%3F%20what%20are%20the%20main%20operations%20performance%20objectives%20for%20macdonalds%3F%20draw%20an%20operations%20strategy%20matrix%20for%20macdonalds%20%3F&f=false

CASE STUDY McDonald's It's loved and it's hated. It is a shining example of how Plaines, Illinois in June 1955. However, later, Kroc and the good value food can be brought to a mass market. It is a McDonald brothers 'quarrelied, and Kroc bought the symbol of everything that is wrong with industrialised', brothers out. Now with exclusive rights to the McDonald's capitalist, bland, high-calorie, and environmentally name, the restaurants spread, and in 5 years there were unfriendly commercialism. It is the best-known and most 200 restaurants through the US. After 10 years the com- loved fast food brand in the world, with more than 32,000 pany went public, the share price doubling in the first restaurants in 117 countries, providing jobs for 1.7 million month. But through this, and later expansion, Kroc insisted staff and feeding 60 million customers per day (yes, per on maintaining the same principles that he had seen in the day!). It is part of the homogenisation of individual national original operation. If I had a brick for every time I've cultures, filling the world with bland, identical; cookie cut repeated the phrase Quality Service, Cleanliness and ter', Americanised and soulless operations that dehumanise Value, I think I'd probably be able to bridge the Atlantic its staff by forcing them to follow ridged and over-defined Ocean with them.' (Ray Kroc) procedures. But whether you see it as friend, foe, or a bit of both, McDonald's has revolutionised the food industry. Priority to the process affecting the lives both of the people who produce food Ray Kroc had been attracted by the cleanliness, simplicity and the people who eat it. It has also had its ups (mainly) efficiency and profitability of the McDonald brothers and downs (occasionally). Yet, even in the toughest times operation. They had stripped fast-food delivery down to it has always displayed remarkable resilience. Even after its essence and eliminated needless effort to make a swift the economic turbulence of 2008, McDonald's reported an assembly line for a meal at a reasonable price. Kroc wanted exceptional year of growth in 2009 posting sales increases to build a process that would become famous for food of and higher market share around the world. It was the sixth consistently high quality, using uniform methods of prepa- consecutive year of positive sales in every geographic ration. His burgers, buns, fries and beverages should taste region of their business. just the same in Alaska as they did in Alabama. The answer was the "Speedee Service System', a standardised process Starting small that prescribed exact preparation methods, specially Central to the development of McDonald's is Ray Kroc, designed equipment and strict product specifications. The who by 1954 and at the age of 52 had been variously a emphasis on process standardisation meant that customers piano player, a paper cup salesman and a multi-mixer could be assured of identical levels of food and service salesman. He was surprised by a big order for eight multi- quality every time they visited any store, anywhere. Oper- mixers from a restaurant in San Bernardino, California. ating procedures were specified in minute detail. In its first When he visited the customer he found a small but suc operations manual, which by 1991 had reached 750 cessful restaurant run by two brothers Dick and Mac pages, it prescribed specific cooking instructions such as McDonald. They had opened their Bar-B-Que' restaurant temperatures, cooking times and portions to be followed 14 years earlier adopting the usual format at that time; rigorously. Similarly, operating procedures were defined to customers would drive-in, choose from a large menu and ensure the required customer experience, for example, no be served by a car hop'. However, by the time Ray Kroc food items were to be held more than 10 minutes in the visited the Brothers' operation it had changed to a self- transfer bin between being cooked and being served service drive-in format with a limited menu of nine-items. Technology was also automated. Specially designed equip He was amazed by the effectiveness of their operation. ment helped to guarantee consistency using fool-proof Focusing on a limited menu including burgers, fries and devices. For example; the ketchup was dispensed through beverages, had allowed them to analyse every step of the a metered pump. Specially designed 'clam shell' grils process of producing and serving their food. Ray Kroc was cooked both sides of each meat patty simultaneously for a so overwhelmed by what he saw that he persuaded the pre-set time. And when it became clear that the metal brothers to adopt his vision of creating McDonald's restau- tongs used by staff to fill French-fry containers were awk- rants all over the US, the first of which opened in Des ward to use efficiently, McDonald's engineers devised a simple V-shaped aluminium scoop that made the job faster the summer period. Notwithstanding investment in cold and easier as well as presenting the fries in a more attrac storage facilities, all the stored potatoes rotted. Not to be tive alignment with their container. beaten, he offered another suggestion. Why don't For Kroc, the operating process was both his passion and McDonald's consider switching to frozen potatoes? This the company's central philosophy. It was also the founda- was notrivial decision and the company was initially tion of learning and improvement. The company's almost tious about meddling with such an important menu item compulsive focus on process detail was not an end in itself. However, there were other advantages in using frozen Rather it was to learn what contributed to consistent high- potatoes. Supplying fresh potatoes in perfect condition to quality service in practice and what did not. Learning was McDonald's rapidly expanding chain was increasingly dif always seen as important by McDonalds. In 1961, it ficult. Frozen potatoes could actually increase the quality founded "Hamburger University, initially in the basement of the company's fries if a method of satisfactorily cool of a restaurant in Elk Grove Village, Illinois. It had a ing them could be found. Once again McDonald's devel research and development laboratory to develop new opers came to the rescue. They developed a method of cooking, freezing storing and serving methods. Also fran air drying the raw fries, quick frying, and then freezing chisees and operators were trained in the analytical tech them. The supplier, who was a relatively small and local niques necessary to run a successful McDonald's. It supplier when he first suggested storing Idaho Russets, awarded degrees in Hamburgerology. But learning was grew its business to supply around half of McDonalds US not just for headquarters. The company also formed a business 'field service unit to appraise and help its restaurants by Throughout their rapid expansion a significant danger sending field service consultants to review their perforfacing McDonald's was losing control of their operating mance on a number of dimensions including cleanliness, system. They avoided this partly by always focusing on queuing, food quality and customer service. As Ray Kroc, four areas: improving the product, establishing strong said, 'We take the hamburger business more seriously than supplier relationships, creating largely customised equip anyone else. What sets McDonald's apart is the passion m ent, and developing franchise holders. But also it was that we and our suppliers share around producing and their strict control of the menu which provided a platform delivering the highest quality beef patties. Rigorous food of stability. Although their competitors offered a relatively safety and quality standards and practices are in place and wide variety of menu items, McDonalds limited this to executed at the highest levels every day ten items. This allowed uniform standards to be estab No story illustrates the company's philosophy of learning ished, which in turn encouraged specialisation. As one of and improvement better than its adoption of frozen fries. McDonald's senior managers at the time stressed, French fried potatoes had always been important. Initially wasn't because we were smarter. The fact that we were the company tried observing the temperature levels and selling just ten items and had a facility that was small cooking methods that produced the best fries. The prob- and used a limited number of suppliers created an ideal lem was that the temperature during the cooking process environment. Capacity growth through additional was very much influenced by the temperature of the pota s tores) was also managed carefully. Well-tilised stores toes when they were placed into the cooking at. So, were important to franchise holders, so franchise oppor unless the temperature of the potatoes before they were tunities were located only where they would not seriously cooked were also controlled (not very practical it was dif- undercut existing stores. Ray Kroc used the company ficult to specify the exact time and temperature that would plane to spot from the air the best locations and road produce perfect fries. But McDonald's researchers have junctions for new restaurant branches perseverance. They discovered that, irrespective of the temperature of the raw potatoes, fries were always at their securing supply best when the al temperature in the cooking at increased McDonald's said that it has been the strength of the align by three degrees above the low temperature point after ment between the Company, its franchisees and its sup they were put in the vat. So by monitoring the temperature pliers (collectively referred to as the System that has been of the vat, perfect fries could be produced every time. But the explanation for its success Expanding the McDonalds that was not the end of the story. The ideal potato for fries chain, especially in the early years meant persuading both was the Idaho Russet, which was seasonal and not avail franchisees and suppliers to buy into the company's able in the summer months, when an alternative inferior) vision: "Working as Ray Kroc put it not for McDonald's potato was used. One grower, who, at the time, supplied but for themselves, together with McDonald's 'He pro a fifth of McDonald's potatoes, suggested that he could moted the slogan, 'In business for yourself, but not by put Idaho Russets into cold storage for supplying during yourself. But when they started suppliers proved problematic. McDonald's approached the major food sup some Christians give up eating red meat on Fridays and pliers, such as Kraft and Heinz, but without much success instead eat only fish or no meat at all some customers Large and established suppliers were reluctant to conform avoided the traditional hamburger He went to Ray Kroc, to McDonald's requirements, preferring to focus on retail with his idea for a Filet-o-Fish a steamed bun with a sales. It was the relatively small companies who were will shot of tartar sauce, a fish fillet and cheese on the bottom ing to risk supplying what seemed then to be a misky ven bun. But Kroc wanted to push his own meatless sandwich ture. Yet, as McDonald's grew, so did its suppliers. Also, called the hula burger a cold bun with a piece of pineapple McDonald's relationship with its suppliers was seen as less and cheese. Groen and Kroc competed on a Lenten Friday adversarial than with some other customers. One supplier to see whose sandwich would sell more. Kroc'shula burger is quoted as saying 'Other chains would walk away from failed, selling only six sandwiches all day while Groen sold you for half a cent McDonald's was more concerned with 350 Filet-o-Fish. Similarly, the Egg McMuffin was intro getting quality, McDonald's always treated me with duced by franchisee Herb Peterson, who wanted to attract respect even when they became much bigger and didn't customers into his McDonalds stores all through the day, have to. Furthermore, suppliers were always seen as a not just at lunch and dinner. He came up with idea for the source of innovation. For example, one of McDonald's signature McDonald's breakfast item because he was meat suppliers, Keystone Foods, developed a novel quick reputedly very partial toeges Benedict and wanted to freezing process that captured the fresh taste and texture create something similar of beef patties. This meant that every patty could retain its Other innovations came from the company itself. By the consistent quality until it hit the grill. Keystone shared its beginning of the 1980s, poultry was becoming more fash- technology with other McDonald's meat suppliers for lonable to eat and sales of beef were saging Fred Tyres McDonald's, and today the process is an industry standard then the Chairman of McDonald's had an idea for a new Yet, although innovative and close, supplier relationships meala chicken finger food without bones, about the size were also rigorously controlled. Unlike some competitors of a thumb. After six months of research the food techni who simply accepted what suppliers provided. complaining cians and scientists managed to reconstitute shreds of only when supplies were not up to standard, McDonald's white chicken meat into small portions which could be routinely analysed its supplier's products breaded, fried, frozen then reheated. Test-marketing the new product was positive, and in 1983 they were launched Fostering franchisees under the name Chicken M ugets. These were so SC McDonald's revenues consist of sales by company-oper cessful that within a month McDonalds became the sea ated restaurants and fees from restaurants operated by ond largest purchaser of chicken in the USA. By 1992, franchisees. McDonalds view themselves primarily as a Americans were eating more chicken than beef. franchisor and believe franchising is... important to Other innovations came as a reaction to market cond- delivering great locally relevant customer experiences tions. Criticised by nutritionists, who worried about calore and driving profitability. However, they also believe that rich burgers, and shareholders who were alarmed by directly operating restaurants is essential to providing the fattening sales, McDonald's launched its biggest menu company with real operations experience. In 2009, of the revolution in 30 years in 2003 when it entered the pre- 32,478 restaurants in 117 countries, 26,216 were operated pared salad market. They offered a choice of dressings for by franchisees and 6,262 were operated by the Company. their grilled chicken salad with Caesar dressing and crou Where McDonalds was different to other franchise operatons or the lighter option of a drizzle of balsamic dressing tions was in their relationships. Some restaurant chains Likewise, recent moves towards coffee sales were concentrated on recruiting franchisees that may then be prompted by the ever-growing trend set by big coffee ignored. McDonalds, on the other hand, expected its fran- shops like Starbucks. McCafe, a coffee-house-style food chisees to contribute their experiences for the benefit of and drinkchain, owned by McDonald's, had expanded to all. Ray Kroc's original concept was that franchisees would about 1,300 stores worldwide by 2011 make money before the company did. So he made sure that the revenues that went to McDonalds came from the Problematic periods Success of the restaurants themselves, rather than from The period from the early 1990s to the mid-2000s was if initial franchise fees ficult for parts of the McDonalds empire. Although growth in many parts of the world continued, in some developer Initiating innovation markets, the company's hitherto rapid growth stalled. Party Ideas for new menu items have often come from fran- this was due to changes in food fashion, nutritional com chisees. For example, Lou Groen, a Cincinnati franchise cerns and demographic changes. Partly it was because holder had noticed that in Lent (a 40-day period when competitors were learning to either emulate McDonald operating system, or focus on one aspect of the traditional Angus Third Pounder, smoothies and frappes, together with quick service offering, such as speed of service, range of more convenient locations, extended hours, efficient drive- menu items, (perceived) quality of food, or price. Burger thru service and value-oriented promotions. In the UK, King, promoted itself on its 'flame-grilled' quality. Wendy's changes to the stores' decor and adapting menus have also offered a fuller service level. Taco Bell undercut McDonalds' helped stimulate growth. Jill McDonald's views are not prices with their value pricing' promotions. Drive-through untypical of other regions, 'We have probably changed more specialists such as Sonic speeded up service times. But it was in the past four years than the past 30 more chicken, 100% not only competitors that were a threat to McDonald's breast meat, snack wraps, more coffee-lattes and cappuc growth. So-called "fast food was developing a poor reputa- cinos, ethically sourced, not at rip-off prices. That really tion in some quarters and, as its iconic brand, McDonald's connected with customers. We sold 100m cups last year. was taking much of the heat. Similarly, the company Senior managers put their recent growth down to the became a lightning rod for other questionable aspects of decision in 2003 to reinvent McDonald's by becoming modern life that it was held to promote, from cultural impe. "better, not just bigger and implementing its "Plan to Win rialism, low-skilled jobs, abuse of animals, the use of hor. This focused on 'restaurant execution', with the goal of mone-enhanced beef, to an attack on traditional (French) ... 'improving the overall experience for our customers'. er called Jose Bove (who it provided a common framework for their global business was briefly imprisoned) got other farmers to drive their trac yet allowed for local adaptation. Multiple improvement tors through, and wreck, a half-built McDonald's. When he initiatives were based on its 'five key drivers of excep. was tried, 40,000 people rallied outside the courthouse. tional customer experiences' (People, Products, Place, The Chief Executive of McDonald's in the UK, Jill Price and Promotion). But what of McDonald's famous McDonald (yes, really!), said that some past difficulties standardisation? During its early growth no franchise were self-induced. They included a refusal to face criticisms holder could deviate from the 700+ page McDonald's and a reluctance to acknowledge the need for change.'l operations manual known as the Bible'. Now things are think by the end of 1990s we were just not as close to the different, at least partly because different regions have customer as we needed to be, we were given a hard time developed their own products. In India, the 'Maharaja in the press and we lost our confidence. We needed to Mac' is made of mutton, and the vegetarian options con- reconnect, and make changes that would disrupt people's tain no meat or eggs. Similarly, McDonald's in Pakistan view of McDonald's Investing in its people also needed offers three spicy 'McMaza meals. Even in the USA things to be re-emphasised. 'We invest about 35m a year in have changed. In at least one location in Indiana, there's training people. We have become much more of an edu- now a McDonald's with a full service "Diner' inside, where cator than an employer of people'. Nor does she accept waitresses serve 100 combinations of food, on china, a far the idea of 'Mclobs' (meaning boring, poorly paid, often cry from Ray Kroc's vision of stripping out choice to save temporary jobs with few prospects). That whole McJob time and money, thing makes me so angry. It's snobbish. We are the biggest employer of young people in Britain. Many join us with out qualifications. They want a better life, and getting qualifications is something they genuinely value.' 1 How has competition to McDonald's changed over time? Surviving strategies 2 What are the main operations performance Yet, in spite of its difficult period, the company has not only objectives for McDonald's? survived, but through the late-2000s has thrived. In 2009 3 Draw an operations strategy matrix for McDonald's results showed that in the US, sales and market McDonald's share both grew for the seventh consecutive year, with new products such as McCaf premium coffees, the premium