McDonalds in the US - Case Study Example

McDonald in U.S. Introduction McDonald is a global franchise company, which is involved in the supply of hamburger and other fast food products in its restaurants. The company has several outlets, which enables to serve approximately 68 million customers on daily basis in around 119 countries (McDonalds publication 1). As such, the company gains revenue from franchisees fees, royalties, rent and sale of its operated restaurants. Such results in the generation of approximately $ 5.5 billion in form of profits and $ 27.5 billion as annual revenues. The primary products of the company include hamburgers, milkshakes, cheeseburgers, various types of desserts, chicken, different soft drinks, breakfast items, seasoned fries and French fries. Problem analysis One of the key problems of McDonald is the issue of cultural differences. Being a global company, McDonald focuses on recruiting competent and talented individuals who have the potential and ability of improving on their sales volume. However, the company faces such challenges of cultural differences since its employees come from different cultural backgrounds. Thus, providing an equal training for such employees on how to execute their job roles is challenging for the company. Nevertheless, the company has allocated adequate resources to ensure that it manages the issue of cultural shift effectively. In this, McDonald ensures that it hires labor that is characterized of cultural background of its business environment. Cultural differences among nations also influence how McDonald applies is strategic approaches of attaining business success. Thus, cultural values, which include eating habits, gender perspectives, communication modes, dress codes and religion, dictate how business operations have to be conducted in a given country. McDonald has realized the need of taking into consideration of the cultural values of each business location in order to overcome the issue of cultural shock. As such, the company ensures that it aligns its business strategies with cultural values and practices of the community in which it has to conduct its business activities. Inflation is factor that influences business activities of all international companies. McDonald is one of these companies, which incurs challenges of changing currency rates and inflation in some of its countries where it has established branches. Thus, the company experiences problems in management of its revenues since they shift based on the currency variation among countries. To address this, McDonald ensures that it aligns its pricing strategy with prevailing market conditions of each country. Such includes gathering information from economists and investors on their predictions of the country’s currency trend. Hence, such information is used in the process of pricing the various products and services of the company. Location is key factor of consideration for McDonald. This is because its products are targeted for individuals who like taking fast foods. As such, the company experiences stiff competition from other restaurants who are involved in the sale of food products in the market. In response to this, McDonald outsources its franchisees in all busy locations. Such contributes in ensuring that the company expands its market segment and earns a large share of the customer base for the fast food products. In addition, the company provides adequate training and incentives for its franchisees to ensure that they focus on the achievement of the company goals. Hence, these employees aim at identifying the best location for the food products. Furthermore, the franchisees use portable means to relocate to areas which are highly populated and act as key customer bases. Thus, location problem of the company is solved effectively. Supply and logistics chain of the company is another problem, which the management team focuses on addressing at all times. Such occurs since at times, the demand for food products in the franchisees changes depending on occasions and time of the day. Thus, the supply and logistic chain faces challenges of handling such unwanted increase in demand for the products. For example, when there are sporting activities, the company may find that the franchisees have finished their products and the supply is less. McDonald addresses such a problem by conducting market research on what would happen in a typical day when the demand for the food products rises suddenly. The data from the research provides essential information for the inventory system and production planning processes of the company, which ensures that continuous supply of the food products is maintained at all times. Finally, McDonald has to ensure that its inventory system works effectively. Such is vital in order to ensure that the company obtains timely supply of raw materials for the production process in food preparation. A delay in the supply of raw materials and other essential resources for the food preparation would imply that the company will not be effective in the delivery of the food products to its market segment. Such will result in the destruction of corporate reputation of the company and loss of loyal customers. As such, McDonald has adopted technology as a key strategy for ensuring that its inventory system works effectively. Further, the company relies on technology to ensure that resources allocation and ordering processes occurs in an effective manner. This is supported by the highly technical system, which enables effective ordering of raw materials and dispatch of such materials in the processing lines of food. Conclusion In conclusion, operations management is a key strategy that business organizations embrace in order to ensure that they attain success in their business environment. However, operation management is characterized of several challenges, which makes it impossible for the business organizations to achieve the desired success level. Consequently, company managers have to allocate resources to streamline their operations management. McDonald is one of the companies, which has a robust operation management. This is because the company has international branches where it manages franchisees. As such, the company has embraced effective approaches, such as the new developments in the area of information technology to ensure that it achieve success. Hence, the company has been able to forecast market trends of its products, manage its production lines and ensure continuous supply of its products in the market at all times. Works Cited McDonalds publication. "Corporate FAQ". McDonalds Corporation. Read More