Class Work
Class Work
Class Work
2. Quality Management.
The company aims to maximize product quality within constraints, such as costs and price
limits. McDonald’s uses a production line method to maintain product quality consistency.
Consistency satisfies consumers’ expectations about McDonald’s and its brand in this strategic
decision area of operations management.
4. Location Strategy.
McDonald’s goal in this strategic decision area of operations management is to establish
locations for maximum market reach. McDonald’s marketing mix includes restaurants, kiosks,
and the company’s website and mobile app as venues. Through these locations/venues,
McDonald’s reaches customers in traditional and online ways.
8. Inventory Management.
McDonald’s goal for this strategic decision area of operations management is to minimize
inventory costs while supporting restaurant operations. The company does not directly sell
products and ingredients to its restaurants. Instead, local and regional intermediaries and
distributors coordinate with McDonald’s restaurant managers to manage their inventory.
9. Scheduling.
McDonald’s uses corporate conventions for scheduling, based on local market conditions and
laws, as well as supply chain needs. For example, the company’s strategy involves regular and
seasonal schedules to address fluctuations in local market demand. Thus, in this decision area
of operations management, McDonald’s is flexible and adapts to local market conditions.
10. Maintenance.
McDonald’s lets restaurant managers or franchisees select maintenance service providers.
However, for kitchen/production equipment, McDonald’s Corporation also has
certified/approved maintenance providers. Thus, the company addresses this strategic decision
area of operations management through local and corporate control.
Funding
• McDonald’s makes money by leveraging it's product, fast food, to franchisees who
have to lease properties, often at large mark-ups, that are owned by McDonald's.
• According to the data from their latest annual report, approximately 93% of total
capacity are franchises which is still below McDonald’s long-term goal of 95%.
• Franchisees are lured by the impressive margins that make McDonald’s franchises an
almost guaranteed moneymaker.