McDonald’s Corporation- McDonald’s Corporation- Operation ManagementOperation Management

ContentsContentsMc Donald’s history Competitors Operations: Supplier side Customer side Environmental Issue Franchisees Product innovations

HistoryHistory 1940 First McDonald’s 1952 Attempts at

franchising 1954 Milk Shake

Machine 1955 prototype opens

in Des Plaines, IL 1956 14 McDonald’s 1961 McDonald

brothers sell rights

• 1965 McDonald’s go public

• 1968 Introduction of Big Mac and shift to Network Television

• 1970 1600 restaurants

• 1980 6000 McDonald’s Restaurants

• 1990 record sales

History ContinuedHistory Continued

1994 Kuwait City, Kuwait 2002 Forty seven years after

– 30,000 locations– 2000 new restaurants – World Wide Web– McDonald’s a recognized Brand

Name

Competition - RivalsCompetition - Rivals

• Customer Service– McDonald’s is currently ranked last amongst

its top competitors in the FFHR subsector.• #1 – Burger King• #2 – Wendy’s• #3 – McDonald’s

– - Three competitors hold 73% of the FFHR market

Competition - RivalsCompetition - Rivals

• Burger King – 14%– Wendy’s – 13%

• Other strong competitors– Sonic – 6%– Jack in the Box – 4%– Hardee’s – 3%– White Castle – 1%

Operations: Supplier SideOperations: Supplier Side

“You have got to be deaf, dumb & ignorant to loose Mc Donald’s business once you have it”

Supplier Side Contd..Supplier Side Contd..

Customer OrientationCustomer Orientation

FranchiseesFranchisees More than 30,000 resturants in more than 119

countries They want to be their own boss Selling a well established, high quality product Excellent training Continuous support Benefit from national marketing carried out by

McDonald’s

McDonald & EnvironmentMcDonald & Environment

Tie up with Environmental Defense Fund (EDF)

EDF Assess McDonald's solid waste stream Suggest ways to improve it

EDF - founded in 1967 to stop spraying spread of DDT

Waste Reduction Waste Reduction

Task Force -– 4 sr. Managers(McD) + 2 scientists + Economist(EDF)

Action Plan1. Comprehensive2. Incremental Solutions3. Environmental Action – Ongoing feature

Suggested – 42 new features around 3R’s – Reduction Reuse and Recycle

Initiatives would cut waste at 8500 US restaurants by 80%

Waste Reduction Waste Reduction

1 McDonald generated .12pounds waste per customer , 238 pounds on premise waste per day– OTC waste 21% , BTC waste -79%

Stressed on reducing waste during the entire lifecycle – Acquisition , Manufacturing & distribution

Lifecycle AssessmentLifecycle Assessment

InitiativesInitiatives

Brown Bags – 100% recyclable

Corrugated Boxes - 35% recyclable mandate

McRecycle USA – Before EDF , spend $100mn on using recycle products

Sandwich PackagingSandwich Packaging

Abandon polystyrene clamshell packagingNew Packaging – 3 areas

o Availability , Functionality & Cost

Perform in 4 areas – o 1st – food warm , 2nd – food tasty , 3rd – easy to handle ,

4th – meet standard of appearance

3 layer wrapped

Affected – 5 suppliers

Layered wrappingLayered wrapping

Reduce waste1. Less volume of boxes

2. Less industrial pollution

3. Layered wrapping lower in volume so less weight disposable