Unformatted text preview: ention than anyone else to field
service and training at store level. Production was concentrated in huge
plants devoted exclusively to McDonald¶s. McDonald¶s also started with
tiny suppliers and grew with them displaying great loyalty.
Nowhere is the supplier loyalty more evident than in development of new,
improved products. Some of McDonald¶s classic food items like Filet-oFish, French Fries, and Chicken Nuggets etc. are results of supplier
innovation. Interestingly, it took KFC more than three years before in
finally introduced its own version of chicken nuggets. Thus supplier
technological expertise had given McDonald¶s a product which was not a
mere marketing innovation but a technical one. McDonald¶s attempted to
squeeze labour out of the stores by moving more preparation back into
the processing plant, creating the opportunity to develop unique products
based on suppliers¶ processing skills. For the first time, McDonald¶s
suppliers became the focal point of new product development. This
converted the fast-food industry¶s most fragmented distributed system
into more efficient one which helped McDonald¶s reduce its inventory and
manage costs effectively. OPERATIONS COMPETITIVE STRATEGY 43 | P a g e McDonald¶s Corporation competes in a challenging market segment by
providing need-satisfying products to customers. In this segment,
ineffective competitors often fail without proper strategies.
To sustain its viability, the McDonald¶s corporation employs an effective
competitive strategy to make it stand out against competitors such as
other fast food restaurants. McDonald¶s competes on several bases,
2. Speed and
their strongest priority is ³making customers happy´. The company
recently made strong changes to its process by introducing the ³Made for
You´ system. COMPETITOR¶S ANALYSIS
McDonald¶s has been a leading fast-foods outlet in Vile Parle. But the
outlet understudy has other competitors eating away into its market
share. In addition to its traditional rivals²KFC, Dominos, Pizza Hut²the
firm encounters new challenges. Jumbo King competes using a back-tobasics approach of quickly serving up burgers for time-pressed
consumers. On the higher end, the KFC has become potent competitor in
the quick service field, taking away customers from McDonald¶s.
Perhaps in the new environment, fast, convenient service is no longer
enough to distinguish the firm. At this time, a new critical success factor
may be emerging: the need to create a rich, satisfying experience for
This brings us to service and experience based competition which
McDonald¶s can use for competitive advantage against Jumbo King.
44 | P a g e Keeping in mind the demographics of the area, McDonald¶s has Wi-Fi
enabled the outlet to cater to the student community.
It is for this overall ³Food, Fun & Folks´ experience that customers pay a
premium over the other competitors.
MCDONALD¶S COMPETITOR¶S: COMPETITION BASES:
McDonald¶s competes on several bases mainly to ³make their customers
happy´ by providing speedy, affordable, and nutritious foods.
Through extensive market research and survey, the organization
discovered that its customers desire speed as one of the restaurants¶ top
Therefore, McDonald¶s vision aims to ³provide fast, friendly and accurate
service´. McDonald¶s realizes that specific targets are necessary to
45 | P a g e measure the performance of speed, and continuously takes relevant
measurements to compare actual performance with desired targets. To
achieve efficient service times, the company utilizes proven, standardized
training processes for its employees and new drive-thru layouts to reduce
service times. Along with speed, McDonald¶s also competes by offering
prices at a low cost.
To offer high quality products at low cost requires efficient processes
throughout the entire McDonald¶s organization.
Once again, this goal is built into their vision statement when they claim
that ³We will be the most efficient provider so that we can be the best
value to the most people´. McDonald¶s incorporates several ways of
approaching to provide great value to its customers. One strategy that the
company has employed for many years is the value meal. The value meal allows customers to buy a sandwich, French fries, and
beverage at a discount when purchased together.
restaurants offer from seven to twelve value meals, both for their lunch
menu and breakfast menu.More recently, McDonald¶s began offering a
46 | P a g e value menu, consisting of many individual items costing only $1.00 each.
First tested in southern California, the value menu has proved to be very
successful and has been since incorporated to the individual stores.
Some individual franchise owners choose to offer daily specials of special
menu items, such as ³$0.39 hamburger Wednesdays,´ or other similar
specials. Big Mac Mondays are a popular regional promotion.
McDonald¶s third main competitive base is nutrition. The...
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