Macdonald's --> Global Food Industry --> Fast Foot Industry --> Shakeout phase (Intensifying our efforts to drive sales and customer visits despite challenging economies and a contracting Informal Eating Out segment) Value Chain

Value Chain of McDonald’s (Michael Porter)
Raw Food Suppliers --> Processing --> Cooks --> Stores and Franchises --> Consumers

Primary Activities

1. Inbound Logistics 1) “McDonald’s purchases raw vegetables and other raw materials from its fixed, pre- defined suppliers only, therefore by increasing capital and labor, their production will increase proportionately.”
Source and further information:
“McDonald’s has practiced a backward vertical integration, by replacing most of its suppliers. It has done so for two reasons, 1) To reduce costs, and 2) To ensure that its products are of top quality. These supplies 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 Coca-Cola, which is also its ally. McDonald’s supplies also include raw material such as flour, sugar, yeast, etc.” 2) McDonald’s own information:
“We import some beef raw materials from Australia and New Zealand. And those plants have to meet all our same requirements that we hold our U.S. plants to; which includes animal welfare and food safety, testing — everything.” 2. Operations :
McDonald’s Backgrouds for Operation Management
Before the McDonald’s brothers invented their fast-food operations system, some restaurants did make food pretty quickly. These restaurants employed short-order cooks, who specialized in making food that didn’t require a lot of preparation time.
Being a short-order cook took skill and training, and good cooks are in high demand. These speedee system, however, was completely different. Instead of using a skilled cook to make food quickly, it used lot of unskilled workers.
The McDonald’s Brothers changed the design of restaurant kitchen. Instead of having lots of different equipment and stations for preparing a wide of variety food, the Speede 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 french fries
- A soda fountain and milkshake machine for desserts and beverages
- A counters 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. The warehouses the ship supplies to each restaurant by truck. Warehousing and distribution, just like the management of chain, is centralized rather than handled by each restaurant.
In some chains, managers track the restaurants’s inventories of food, wrappers, cups, and other necessary items. They often order everything the restaurant need from the distribution center, which ships it to them.
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 center ships the necessary items on a regular schedule instead of waiting a request from the restaurant.
McDonald’s is always keen to take the charge of crucial task of turning the company around to meet customer demands. One of thefirst steps that it prposeshas been to inovate the process of manufacturing and logistics.
This had been done with the view to increase efficiency 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’s why we work with our employees, franchisees, and suppliers to serve a balanced array of food choices and provide the 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. We are dedicated to innovation and improving our operations in order to build an even more sustainable, environmentally friendly, and profitable business. And we will continue to reoptimize our menu, modernize the customer experience, and broaden accessibility to our 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 restaurant brands, such as Piles Café.
Focusing on its core brand, McDonald’s began divesting itself of other chains it had acquired during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until October 2006, when McDonald’s fully divested from Chipotle through a stock exchange. Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald’s sold Boston Market to Sun Capital Partners.
Notably, McDonald’s has increased shareholder dividends for 25 consecutive years, making it one of the S&P 500 Dividend Aristocrats In October 2012, its monthly sales fell for the first time in nine years.
Advertising
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, sponsors 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.
To date, McDonald’s has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns.
McDonald’s in Indonesia
The first McDonald’s restaurant was founded in 1940 by two brothers Dick and Mac McDonald, but was later bought out by Ray Kroc and expanded to the entire world.
Until in 2004, McDonald’s has 30,000 restaurant worldwide with an average number of visitors to 50 million people and visitors per day and eating houses 1,700 people.
The first McDonald’s restaurant located at Sarinah in Indonesia, Jakarta and opened on February 23, 1991. Different from most McDonald’s restaurants abroad, McDonald’s also sells fried chicken and rice in a restaurant-restaurant in Indonesia.
On October 1, 2009 McDonald’s turned into a Tony Jack’s Indonesia but not all McDonald’s outlets. There are 13 outlets of McDonald’s owned by Bambang Rachmadi changed among others located in Sarinah (Thamrin), Melawai Plaza, Blok M Plaza, Arion, Kelapa Gading, Sunter, Bandung Indah Plaza, Tunjungan Plaza, Soekarno-Hatta Airport, ITC Mangga Dua, Citra Land , Gajah Mada Plaza, and Kebon Jeruk. Shortly thereafter, in 2010 Tony Jack’s Indonesia expert bankrupt and was taken by McDonald’s. 5. Services
Free Wi-Fi @ McDonald’s
Your favorite McDonald’s meal now comes with complimentary Wi-Fi. Get some work done, check email, connect with friends…for free!
With free Wi-Fi at more than 11,500 participating restaurants, customers can access the Internet using their laptops or PDAs at no charge. So grab a McCafé Latte and log on…it’s on us! Just one more thing to love about McDonald’s.