The Vision Statement of McDonald's - Research Paper Example

College:

Logistics

Logistics is the process of controlling flow of materials and finished products as well as information between an organization and its customers. The purpose of logistics is to meet customer requirements. For an organization operating in the international business environment, logistics is an important concept that helps to realize business goals and objectives. However, many organizations do not have effective supply chain management, and this hinders the relationship between customers and the organization (McDonalds Restaurant 2015). The purpose of this paper is to discuss the concept of logistics. Specifically, it discusses the strategy adopted by the organization like channels of distribution, transportation, and storage of inventory. McDonalds has a good strategy that meets the needs of the customers globally.

Company background

McDonalds was founded as a small burger restaurant, but currently, it is the biggest restaurant globally. It was founded in 1955 and currently operates in more than 119 countries. It serves more 68 million customers and has 36,538 outlets. The company has succeeded because of its competitive management skills and the way it values its customers (McDonalds Restaurant 2015). Also, it has proper logistics strategy that has created a good relationship with the customers. It is committed to delivering customer experience by giving quality products and services to meet consumer needs.

Vision statement

The vision statement of McDonalds is to be a current delivering customer experience. By development, it means that the company wants to take its business in areas where the customers require the services (Pauline 2015). In doing this, the company delivers quality products and services with great tastes.

Mission statement

The mission statement of McDonald is to be customers’ number one choice of drinking and eating. The management of the company is dedicated to offering products and services where employees could want to work and bring positive change in the society besides meeting or satisfying customer wants (Pauline 2015). The company is dedicated to delivering customer value by collecting feedback from the customers so that it is easy to understand their needs.

Logistics strategy

Customer service levels

The organization has concentrated on meeting customer experiences so that it can increase its market share. The company provides quick services to its target audience. Firstly, the company looks for convenient locations where it develops its businesses (Warner 2005). The company builds its quality restaurants in places that are easy to access by the customers, and the stores are built in the neighborhoods. For instance, McDonalds has its stores near airports and tollways so that clients can access the products conveniently.

Also, the company has a good relationship with the customers by engaging in corporate social responsibility. It extends its operations into the community where its opens its outlets. For instance, safeguarding environment is one of the community base activities developed by the company (Pauline 2015). When customers walk into the restaurants, they can see certification of the company regarding the commitment of the organization regarding environmental conservation. In this context, the company provides quick services to its customers by locating its buildings at convenient places.

Also, the company works towards changing health needs according to the needs of the target audience. The management of the company has plans that help to link nutrition strategy and organizational strategy. The nutritional experts in the company can analyze information from the customers regarding their requirements (Warner 2005). Before developing an appropriate menu, nutritional experts conduct extensive research and determine the health concerns of the new menus. In this way, the company provides nutritional services that meet the needs of the customers.

The company applies corporate social responsibility. The mission of the institution encompasses the ability to interact with the market through regular updates. The main aim of sustainable reporting to the stakeholders regarding the progress of the organization is to inform them of the needs of building a strong relationship (Warner 2005). For instance, the company reports to the stakeholders about its efforts towards deforestation and strategies taken to maintain environmental standards. In this regard, the organization provides a variety of service levels to meet expectations of the customers.

Moreover, partnership working with other entities strategy is applied by McDonalds to ensure quick restaurant brand. For instance, through franchising, it has managed to encourage entrepreneurship and commitment towards communal activities (Warner 2005). The aim is to conduct joint research and develop better strategies that can deliver value to customers. As a result, the company has provided adequate services to improve customer experience.

Channels of supply and distribution

McDonalds applies limited sourcing strategy to get its raw materials like coffee products. It means that the institution has a limited number of suppliers where it sources its materials. For instance, in 2014 it made 32% purchases from Rainforest Alliance Certified. The reasons are because the supplier is certified and supplies quality coffee products that can deliver quality products (McDonalds Restaurant 2015). Also, 100% of coffee raw materials used in the American market are sourced from Rainforest Alliance Certified. The strategy is appropriate because it has helped to maintain its quality of products to the customers.

Regarding the channels of distribution, the company uses a variety of channels that are convenient to the target market. The first model used is direct distribution. It is the strategy where the company uses its retail outlets to supply its products. The channel is effective because the marketing team has a direct contact with the clients. The other channel is a strategic alliance with reputable retail outlets. For instance, the company has entered into strategic partnership with competitive organizations like Walmart to supply its products to customers (McDonalds Restaurant 2015). The aim is to ensure convenience of the products to its customers.

Facility locations

For good logistics, McDonalds locates its facilities conveniently. Firstly, the company locates its retail outlets near institutions. For instance, the organization has opened its facility in Illinois, Hamburger University. The facility is about 130,000 square foot. The aim of opening this facility is to ensure that its products reach the target customers from the institution. In fact, both students and teaching staff can access the products appropriately (McDonalds Restaurant 2015). Moreover, the menu is appropriate for the target market because they have specific needs that the company has considered in its menu.

Also, McDonald’s real estate strategy is convenient to the customers. The company does not locate its facility anywhere. The extensive environmental scan is done to determine the most viable marketplace where the facility can be located. The site selected should provide quick service to the target customers. In this regard, the company places its stores in neighborhoods like airports, supermarkets and tollways (Warner 2005). It is also important to understand development in technology have prompted the company to engage in e-commerce. The company has a website where it interacts with the customers, and they can make their orders online. In large scale, the company offers outside catering when customers make specific requests. For instance, the institution can organize birthday events for kids. In this regard, the company is not rigid about the location of its services. However, the most important factor considered in locating the facility is the market place.

Allocations

The success of McDonalds is associated with the allocation of resources. The management of the company allocates resources appropriately with the focus on meeting the needs of the customers. Firstly, the management allocates the resources towards employee training and development. It is because the organization has invested a lot in developing skills of the employees so that they can offer their best skills to satisfy the needs of the customers (Warner 2005). For instance, newly hired employees undergo training so that they are equipped with organizational culture. In this way, employees are motivated, and they work as a team to achieve organizational goals and objectives.

Furthermore, the company dedicates its resources to quality assurance department. The company aims to meet the expectations of the customers. The goals and objectives will be achieved by dedicating more resources to quality assurance section so that it can monitor quality to maximum (Pauline 2015). The allocated resources are used to collect feedback from the customers and developing material specifications used to purchase raw materials. Therefore, budgetary requirements contribute to customer development.

Inventories

The success of any organization depends on inventory management technique applied. In the case of McDonalds, inventory is organized according to regional sections. Individual restaurants in various regions play important roles in organizing and maintaining inventory. At the central organization, there is overall restaurant planning manager. There are regional planners at the regions who head different individual outlets. Communication is important when managing inventory properly. In this regard, one regional manager works with about 100 restaurants. The restaurant head of supplies communicates with the regional planner on a daily basis through email regarding inventory. Regional planners interact with the head of restaurants and discuss any issue relating to stock (Warner 2005). For instance, the regional planner conducts forecast and determines the requirements of the regional outlets.

The use of ICT is crucial in managing inventory. The information communication technology department improves communication between the regional outlets. During peak seasons like festive, the purchasing officers use stock strategy to manage inventory. It is because of the high demand during the season (McDonalds Restaurant 2015). Moreover, the company applies minimum stock level strategy to make an order. With this technique, the responsibility of regional planner is to understand when stock levels have reached minimum levels and make new orders. In this context, inventory is managed effectively at McDonald and the organization has managed to meet needs and expectations of the stakeholders.

Transportation

Transportation is the process of transporting products and services from their point of manufacturing to customer destination. There are three types of logistics applied by the organization. In the first place, there is inbound logistics. It is the process of moving goods and services from the suppliers to the organization for processing (McDonalds Restaurant 2015). On the other hand, there is outbound logistics. It is the movement of goods and services from the organizational stores to the premises of the customers. The main aim is to make sure that customers have convenience in accessing the products. Once the customers have made their orders, the transport manager organizes transportation of the products taking into account the needs and location of the customer.

In this regard, the transportation system that is mainly used by McDonalds is road transport. For a long time, McDonalds outsources its transport function. It is because of high investment required to carry out transportation. It also outsources the function because of the seasonality of demand hence it will be costly to have own transport system as compared to outsourcing. Once the inventory is manufactured and stored, refrigerated trucks are used to transport the products (McDonalds Restaurant 2015). The manufactured products are transported using refrigerated trucks to the selected centers where the organization distributes its products. Furthermore, the supply chain process of the company is through the cold chain that involves engagement of suppliers. The trucks have a variety of features where inventory can be transported at different temperatures according to their requirements. Truck transport is the main system used because it is cost effective as compared to air transport which is faster but costly. Transportation is organized in a way that ensures timely delivery and meets the demand of the customers.

Information management

Logistics is not complete without information sharing. Information sharing is another secret that has influenced the success of the restaurant. In the first place, there is general stakeholder meeting held annually. It is the forum where the stakeholders and management interact. The company invites all the stakeholders in the meeting where they discuss issues and progress of the company (Warner 2005). The management provides relevant and adequate information to the shareholders who also recommend strategies on how to move the company forward. In this forum, achievements are discussed as well as the issues encountered during the financial year.

Also, the information reaches the stakeholders by sponsoring various events in the society. For instance, the information about the company and its products reach the public domain by sponsoring events like 2016 CIAA basketball tournament (Hierarchy structure 2012). It is one of the ways of creating publicity of the company. By sponsoring such events, McDonalds can create awareness of its products and interact with the target market.

Also, the information is managed by using information communication technology. The company is not left behind regarding technology. The company’s website is used to promote interaction between the customers and the organization (Hierarchy structure 2012). In this effect, the shareholders interact on company’s social sites like Facebook and Twitter. Other social sites used include Instagram and Tumblr. Since the company operates in the global market, technology is required to improve communication among the shareholders.

The information of the company is also managed through marketing campaigns. The customers cannot be aware of the products and services of the company without effective marketing campaigns. The techniques applied include the use of social sites, business journals, and roadshow campaigns (Warner 2005). In this way, the customers interact well with the management of the company, and this influences success regarding updating customers on the changes in the company. During the campaigns, the marketing team collects feedback from the target market, and this is used to make effective decisions.

Organizational structure

McDonald has a hierarchical structure that improves its communication with the stakeholders. The head of the company is the chief executive officer who oversees the overall operations of the company. The next level is the head of the board who heads the board of management of the entity. The chairman and the board of directors play an important role in the success of the organization. They formulate overall objectives to be followed by the organization that indicates overall direction of the company. The next level in the hierarchy is the chief financial officer who manages financial resources (Hierarchy structure 2012). The chief financial officer advises the management regarding financial resources for effective budgetary allocation. Followed by the CFO is the chief restaurant officer. The officer determines the efficiency of operations in the restaurant. It is because he has the responsibility of delegating duties and responsibilities to supervisors and line managers.

The next hierarchy level is the senior marketing manager. His responsibility is to organize management function to ensure that the communication between the stakeholders is effective. Most importantly, the marketing manager determines the marketing techniques to apply and guide the entire marketing department. Finally, the senior sales manager controls the sales of the company and performs duties as assigned by top management (Warner 2005). In this regard, the structure of McDonald is best considering its global presence. Communication from top management goes down the hierarchy to the employees. Also, there is upward communication that comes right from the customers through their feedback. As a result, the stakeholders of the organization can communicate their message to top management following the hierarchical structure. The diagram below shows organizational structure.

Source: Hierarchy structure (2012)

Conclusion

Logistics is an important concept applied by McDonalds to create value for its customers. The organization is the market leader in the restaurant industry. Its success is associated with effective logistics strategy. It provides a variety of service levels including corporate social responsibility and ensuring health concerns of the customers are met. The research shows that the main transportation strategy used by the company is truck transport while information is shared through annual general meetings and social media. Finally, the hierarchical structure improves communication and information exchange in the organization. In this regard, the logistics strategy of the company is appropriate and satisfies the needs and expectations of the customers.