McDonald's Operations Management Analysis

This assignment delves into the operational strategies employed by McDonald's, highlighting key elements such as product customization, demand variation management, and operational transparency. The analysis examines how these aspects contribute to customer satisfaction and overall operational efficiency within the fast-food giant.

Running head: 4VS ANALYSIS ON MCDONALDS 1
4Vs Analysis on McDonalds
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4VS ANALYSIS ON MCDONALDS 2
Table of Contents
1.0 Importance of 4Vs Analysis......................................................................................................3
2.0 Application of 4Vs to McDonalds.............................................................................................4
2.1 Volume...................................................................................................................................4
2.2 Variety....................................................................................................................................5
2.3 Variation.................................................................................................................................6
2.4 Visibility.................................................................................................................................6
3.0 Recommendations......................................................................................................................6
4.0 References..................................................................................................................................7

4VS ANALYSIS ON MCDONALDS 3
4Vs Analysis on McDonalds
Any organization aims to make full and effective use of operations to ensure that
customers are satisfied with quality, availability, cost and quantity. To achieve this an
organization must efficiently produce goods through business processes that are effective. The
production functions of the company and controls that have been put in place must be effective
(Slack, 2015). The measures of optimization that can be used are degree of operational visibility,
output volumes, demand variations and demand of products and services.
1.0 Importance of 4Vs Analysis
The 4v analysis looks at volume, variation in demand, visibility and
variety. All these factors are of importance in the operations of a company.
Volume is the amount of products, which are required to satisfy customer
demand. It is important that companies control volumes based on demand
so that they do not over produce or under produce. Lack of volume
management can lead to an organization not being able to deliver or wasting
resources in terms of finances and labor (Shepherd & Patzelt, 2017). It is
important that when organizations are managing lead times, they need to
control and adjust volumes.
Variation refers to the way in which demand levels change over
periods. Organizations mostly like to have low variation though some high
but predictable variations. It is important for organizations to understand
variations so that they are able to adjust accordingly to customer demands.
Variation in demand can apply for businesses that are seasonal for example
those that sell air conditioning or ice cream. Some businesses however might

4VS ANALYSIS ON MCDONALDS 4
have difficulty in adjusting for example if it is a fashion business. It is
important that companies track demand so that they know the demand
patterns.
Variety is the range of products that are manufactured by a business.
Less product varieties mean that an organization has simple operation
processes. When a large variety of goods are being produced the
organizations operation process must allow for high variations. The
production process when there is a high variety or products is mostly more
specialized.
Visibility is the degree to which an operations process can be seen.
Organizations which are largely manufacturing based are rarely visible
Organizations that are mostly service based on the other hand are very
visible. A number of organizations are mixed. Some companies chose to
show low visibility.
2.0 Application of 4Vs to McDonalds
McDonalds is one of the world’s leading fast food restaurants. The company was founded
in the 1930s and was established by Richard and Maurice at San Bernardino. Ray Kroc bought
the McDonald franchise that had been acquired by Dick and Mac who were brothers. Currently
the restaurant serves over 68 million customers across the globe in 119 countries. It has been
ranked as the fastest service restaurant worldwide (Yuen & Chang, 2015). The company offers a
range of fast food like chicken, sandwiches, burgers and salads. The management focuses on
quality and cleanliness so that customer satisfaction is enhanced. They have also put in place

4VS ANALYSIS ON MCDONALDS 5
drive-throughs. They ensure that staffs are trained appropriately so that they are able to operate
effectively and give good service (McDonalds, 2017). The nature of McDonald’s operations can
be looked at in terms of volume, variety, variation and visibility.
2.1 Volume
McDonalds is characterized by high volumes. The company serves millions of customers
everyday hence production volumes have to be high so that consumer demand is met. The high
volume is also because the restaurants have drive-through and customers can order for home
delivery. This increases the demand for the services drastically. Due to the high volumes
produced by McDonalds, the operations are characterized by high repeatability as the same types
of food are offered worldwide in all Mc Donald branches. The food production process is similar
hence high repeatability (Belvedere, 2014). There is also high specialization at McDonalds. The
ingredients and method of cooking is similar throughout all branches. The customer service
systems are systemized throughout the organization. The business relies on high capital due to
the type of operations involved and the volumes that need to be met. Due to high volumes, the
company benefits from economies of scale where suppliers are able to reduce low materials cost
due to the high amounts being purchased by McDonald. McDonalds saves many costs due to
same production processes for example production of fries through specialized process where the
activities leading to the process are streamlined. Potatoes for fries are carefully selected from
special regions so that consistency is maintained (McDonalds, 2017). Due to this, McDonalds is
able to gain more competitive advantage than a small restaurant.
2.2 Variety
Mc Donalds reaps benefits from both volume and variety. The company has a variety that
meets customer needs. The company makes its fries from potatoes, which are deep fried using
pure vegetable oil. The menu for McDonalds is rich in a variety of items like juices, shakes,

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burgers and sandwiches among others. There are also kiddies’ products. This has ensured that the
company matches the needs of the customer. It also shows the flexibility of the company since
they keep introducing new products according to customer needs. It also shows that the
operations of McDonald can handle complexity hence its ability to produce a wide variety of
products to meet customer needs (McDonalds, 2017). The company has also tailored varieties
according to country of operation as some countries do not take beef and others do not take pork.
In India, for example they provide ‘paneer’ burgers.
2.3 Variation
McDonald’s operations are mostly characterized by low variations in demand hence
leading to operations that are stable (Shang et al, 2015). The company is able to focus its demand
based historical figures. Inventory levels are be based on past trends. The company has higher
demand during school holidays and celebration seasons or holidays (Zangiski, 2013). They have
therefore learnt to cater for this demand depending on season. The company maintains process
workflows hence effectively dealing with customer demand and satisfaction.
2.4 Visibility
McDonalds makes its operations as visible as possible to its customers. The company’s
burger making process is visible at outlets. They also have you tube videos showing how some
of their products for example fries are made (Chiarini, 2015). The customers are told of the
ingredients that go into making their products. High operational visibility leads to the customers’
satisfaction being controlled by customer perception.
3.0 Recommendations
Increased competitiveness by McDonalds in the global scene calls for continous
innovation and improvement culture. This enables the company have efficient operational

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processes. The organization is also able to manage its resources effectively (McDonalds, 2017).
The analysis of McDonalds shows that the company focuses on its operations to ensure customer
satisfaction.
4.0 References
Belvedere, V. (2014). Defining the scope of service operations management: an investigation on
the factors that affect the span of responsibility of the operations department in service
companies. Production Planning & Control, 25(6), 447-461.
Chiarini, A. (Ed.). (2015). Sustainable Operations Management: Advances in Strategy and
Methodology. London,Springer.
McDonalds (2017). About Our Food. Retrieved from https://www.mcdonalds.com/us/en-us.html
Shang, G., Saladin, B., Fry, T., & Donohue, J. (2015). Twenty-six years of operations
management research (1985–2010): authorship patterns and research constituents in
eleven top rated journals. International Journal of Production Research, 53(20), 6161-
6197.
Shepherd, D. A., & Patzelt, H. (2017). Researching at the Intersection of Innovation, Operations
Management, and Entrepreneurship. In Trailblazing in Entrepreneurship (pp. 103-147).
Springer International Publishing.

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Slack, N. (2015). Operations strategy. NY,John Wiley & Sons, Ltd.
Yuen, S. S., & Cheng, C. (2015). Quality Management Measures in Food Supply Chain: An (No.
2). Working Paper Series.
Zangiski, M. A. D. S. G., de Lima, E. P., & da Costa, S. E. G. (2013). Organizational
competence building and development: Contributions to operations
management. International Journal of Production Economics, 144(1), 76-89.