Value Chain

By using Michael Porter’s “The Value Chain” we can see how McDonald’s performs to meet the customer’s wants and produce a product they are willing to pay for, from a company they trust. Below, I will evaluate a few of Porter’s primary and secondary activities.

Support activities add value by themselves or add value through important relationships with both primary activities and other support activities.
     Procurement- Helps bring in the biggest profit margin for McDonald’s. McDonald’s has maintained the same recipe for many years for some of it products, while changing some and adding more. They continue to satisfying the customers’ needs while also looking at the environment factors that are in play. McDonald’s has a development of collaborative “win-win” relationships with its suppliers; allowing them to trust them and have high buying power.
     Technology-The most important technological factor is in McDonald’s food preparation and serving. The soda machines are most efficient, in that you only have to press a button and it knows when to stop filling. This gives them an advantage to other companies because of the less amount of time it will take to get the soda prepared for the customer. Another bigger factor is their heating lamps, how they are able to create enough heat to keep everything warm without making them soggy, or ruining the contents and taste of the product.

Primary activities contribute to the physical creation of the product or service, its sale and transfer to the buyer, and its services after the sale.
     Service- McDonald’s most important asset of their business is service. They are able to customize orders for individuals and have mass producing. They have a quick response to the customer’s needs and wants. If McDonald’s was lacking in the service area, they would lose customers to Burger King and Wendy’s because of how they satisfying the customer’s needs. This is something that McDonald’s will not want to outsource because it is such a powerful and important factor to their company. It needs to be done by those who understand McDonald’s and who truly want to make a difference in individual’s lives.
     Operations-McDonald’s provides an efficient layout and workflow for everyone to be able to get the products made quickly but also effectively. Having a proper workflow area really helps McDonald’s so not all employees are in one area at once and no one is running into one another. This goes to show that McDonald’s companies have taken the time to establish the workflow area for employees to prepare the products quickly for the customers.
     Outbound Logistics-McDonald’s provides great outbound logistics because they have an effective shipping process which provides quick and easy delivery to its locations. They are able to get the food from the restaurant to its customers with a good system of work and have fast cooking time for all products ordered.
     Marketing and Sales-It seems McDonald’s is always trying to improve their brand image and name. Over the past few years, McDonald’s has stepped it up with improving their facilities, by creating a more family friendly environment while being able to enjoy delicious food. Because of the renovations and changes that they are making, they are kicking into gear by increasing their marketing in all areas, which then starts to increase their sales, making them a profitable and efficient company to enjoy any meal of the day with.

McDonald’s also has some tangible and intangible assets that help benefit the company tremendously. Its physical faculties and equipment is what makes up some of their tangible assets. Having both an environmental friendly facility and high speed equipment makes it hard for any other fast food restaurant to compete with them. McDonald’s also has some intangible assets including, their reputation, human capital, and their brand itself. Having the brand and reputation that McDonald’s has, has helped them succeed for many years now and will continue to do so in years to come.

External Environment

McDonald’s Corporation is currently the largest fast food restaurant, serving around 68 million customers daily in 119 countries. There are currently 34,000 restaurants worldwide and employs 1.7 million people. In order for McDonald's to keep succeeding in being the largest fast food restaurant they need to focus their attention on certain aspects to maintain their success and be the best.

McDonald's is a restaurant that attracts all ages. It has something for the kids, teens, and adults. The dollar menu is a big hit for McDonald's because it draws in those that are willing to spend only a dollar on a hamburger and be satisfied.

This country is starting to become obese; does McDonald's have anything to do with that? Probably yes. So McDonald's needs to start considering implementing healthier options on their menus and start taking away some of the unhealthier foods. I know that they have started adding in fruits, salads, and smoothies, but if this were done to a greater extent at all the locations McDonald’s could help lower the obesity rate of individuals everywhere.

If there was a way for McDonald's to eliminate how much grease is used to cook their food they would be creating much healthier options for us. And if there was an improvement to how much salt is placed on the French fries, that would help eliminate the amount going into the body but also lowering the rate of having high cholesterol.  

Also, if McDonald's started to make their cups, cup holders, wrappers, and napkins more biodegradable it would have a more lasting impression on the world. Helping the environment should be one of McDonald’s objectives when doing business because they do create so much garbage but if they were able to create new earth friendly materials it would help the environments in the long run. 

There will always be the possibility of having new entrants come into the fast food business but the way that McDonald's is operating and conducting itself they should not be worried. They do well in all 119 countries that they serve and will continue to grow.  Since McDonald's is a restaurant they do not have to worry about those purchasing anything off the internet. They are concerned will how well they are publicizing and performing at serving the customers. There is a high chance that substitute products may be produced by another entrant or rival. Because of the increased push on having better food and eating healthier, I believe that if McDonald's does not create healthier products for their line they may end up losing to another company that has a bigger and better product. And lastly, having Burger King and Wendy’s close on them for being the best fast food restaurant, McDonald's needs to keep what it is doing but also paying attention to concerns of their customers, or they may end up losing them. Keeping their dollar menu at a dollar will greatly keep them in good standing and having great customer service will be the number one reason why their customers will continue to stay with them.  Also, making sure that they are satisfying the needs of the certain countries that they are operating in will help them continue to be the best fast food restaurant.

These are just some of the issues that McDonald's could consider doing to make their business better and be more satisfying to the customers. McDonald's can improve on some things within the organization but as long as they continue what they are doing for now, they are golden; they just need to keep up with the new trends and wants of their customers.  

McDonald's! :)