Value Chain Analysis of McDonald

Value chain analysis of McDonald’s
Primary activities
1. Inbound logistics
“McDonald’s purchases raw vegetables and other raw materials from its fixed, pre-defined
suppliers only, therefore by increasing capital and labour, their production will increase
proportionately.”
McDonald’s has practiced a backward vertical integration, by replacing most of its suppliers.
It has done so far two reasons.
(1) To reduce costs and
(2) To ensure that its products are of top quality
These suppliers include beef and milk to be used in its products, which it gets from its farms.
Other suppliers include local grocery stores that supply McDonald’s with fresh vegetables.
Soft drinks are supplied exclusively by Ccs-Cola, which is also its ally. McDonald’s suppliers
also include raw material such as flour, sugar, yeast, etc.
2, operations
The McDonald’s brothers change the design of restaurant kitchen. Instead of having lots of
different equipment and stations for preparing a wide of variety food, the speedy kitchen had:
 A very large grill where one person could cook lots of burgers simultaneously
 A dressing station where people added the same condiments to every burgers
 A fryer where one person can made fresh fries
 A soda fountain and milk shake machine for desserts and beverages
 A counter where customers placed and received their orders
The process
 The mass- production process requires each restaurants chain to have a distribution
network to carry the food to every restaurant. Warehouses store enormous amounts of
everything a restaurant needs. Including foods, paper products and cleaning supplies.
Warehousing and distribution just like the management of chain is centralized rather
than handled by each restaurant.
 In other chains, it is automated, which means, a computer keeps track of what the
restaurants have and should have on hand, or the distribution the necessary items on a
regular schedule instead of waiting a request from the restaurant.
 This shad been done with the view to increase of the supply chain in terms of
capacity, technology selections and buying policies.
3. Outbound logistics
McDonald’s is committed to providing the highest quality food and superior service at a great
value, in a clean and welcoming environment. That is why the company work with its
employees, franchises and suppliers to serve a balanced array of food choices and provide
and nutrition information needed for customers to make sound decisions.
At the restaurant level, McDonald’s is focused on energy conservation, sustainable packaging
and waste management. The company dedicated to innovation and improving our operations
in order to build an even more sustainable, environmentally friendly and profitable business.
And the company will continue to reoptimize menu, modernize the customer experience and
broaden accessibility to the brand, so that consumers will always enjoy the maximum
McDonald’s experience.
4. Marketing and sales
McDonald’s restaurants are found in 119 countries and territories around the world and serve
58 million customers each day. McDonald’s operates over 31,000 restaurants worldwide,
employing more than 1.5 million people. The company also operates other restaurants brands
such as Pile Café.
McDonald’s has for decades maintained an extensive advertising campaign. In addition to the
usual media ( television, radio and newspaper), the company makes significant use of
billboards and signage, sponsor sporting events ranging from Little League to the Olympic
Games and makes coolers of orange drink with its logo available for local events of all kinds.
Nonetheless, television has always played a central role in the company’s advertising
strategy.
Support activities
1. Firm infrastructure
McDonald’s Infrastructure is modern sophisticated, they using the advance IT and yet they
are still maintaining the green activities.
McDonald’s strives to provide eco-friendly workplaces and restaurants that reflects our
sustainability goals and demonstrate environmental stewardship in the workplace.
2. Human resource management
The work offered by McDonald’s may have some positive elements but workers are often
choosing employment at McDonald’s in the context of having few other attractive options.
Almost regardless of what people think of the work itself, working at MacDonald’s could be
said to offer advantages for some employees who want flexible hours and are engaged in
other activities and responsibilities. For those marginalised in the labour market who have
few chances of a job elsewhere, McDonald’s offers much needed work.
3. Technology development
McDonald’s will focus on modernizing restaurants, evolving the menu and engineering
value.
McDonald’s enters five years IT support deal with Fujitsu. The IT outsourcer will offer
support for point-of-sale systems and bank office operations to both company-owned and
franchise outlets, replacing various incumbent suppliers.
4. Procurement
McDonald’s procurement system is basically a main reason for their successful supply chain
management. It is so efficient that it provides the backbone not only to all the logistics but the
whole McDonald’s supply chain management.
It is a procurement hub launched in 2001 allow all of McDonald’s franchises across the globe
to buy everything needed to run their restaurants. Aside from being faster and more
convenient for franchises, the procurement site allow business owners to buy suppliers and
materials at a discounted price, ultimately reducing costs for McDonald’s.
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Value Chain Analysis of McDonald

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