Food Service Management: Approaches, Principles, and Strategies

This document provides an overview of food service management, including the different approaches to the food supply chain, principles of effective procurement and sourcing processes, and various analytical tools to support management strategies. It also discusses different management practices for successful business operations.

Food Service Management

Table of Contents
Food Service Management..............................................................................................................1
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
Food Supply Chain Approaches..................................................................................................3
Principles of Effective Procurement and Sourcing Processes.....................................................4
LO2..................................................................................................................................................5
Different Analytical Tools to support Effective Management Strategies...................................5
Different Management Practices for successful Business Operations........................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Food service Management refers to activities which are undertaken by the people in
context of food business operations. Food service management includes that daily operation of
the food business. Direction to people working for the businesses who are working for business
which are included in the business which prepare and serve food and beverages so that they are
able to ensure effective customer service to customers. This report includes McDonald’s
American Fast Food Company, founded in 1955 and Headquartered Chicago, US for a purpose
of carrying out discussion.
LO1
Food Supply Chain Approaches
Food supply chain refers to the process through which food from farm ends up on the
fork of customers of food businesses. The process for food supply chain includes production,
processing, distribution, consumption and disposal. One of the important perspective of food
supply chain is Farm to Fork, this means tracing different stages of the food chain system and
examines the food chain system which ensures safety of the food. This is a perspective of food
supply chain and approaches for the food supply chain are as follows-
Direct Food Supply
This is simplest form of food supply chain, this is because in this approach of food
Supply chain only supplier, a central company and a buyer are included. In this supply chain
McDonald’s can also buy the food ingredients and raw food material from farms and from the
immediate supplier (Septiani, 2016). This does not involve anyone else in the process of buying.
There are various benefits as one which has been mentioned earlier that this is simplest form of
supply chain, other benefit of this is that through this McDonald’s can ensure quality of food by
themselves and buy from the suppliers who has best deal with relation to quality and cost of the
product. In this supply chain approach McDonald’s buy products from local suppliers. In this one
important consideration is this that this might increase the efforts which are required for
procurement, storage and maintenance of the raw material.

Key Stakeholders in this supply chain are;
Supplier and McDonald’s. Suppliers can also be considered the owner of the food ingredients
being supplied to McDonald’s.
Short Food Supply Chain
This is a food supply chain which means that this short food supply chain involve very
few intermediaries. In this supply chain, food products travel a short distance, this allows
producer and consumers can talk to each other (Griffiths and et.al., 2016). This supply chain
includes local producers working together to promote local food markets. Through this supply
chain motive of farmers and other involved people is to strengthen rural economy, through this
sellers create new ways of selling local produce and attracting new types of customer. They also
foster cooperation between local farms and food sector. Through exercising this type of supply
chain McDonald’s can contribute to sustainable food development, this reduces Transport costs,
Co2 Emission etc.
Key Stakeholder in this Supply Chain are;
Producers who produce the food and mediators who are seller of the food and mediate between
producer and McDonald’s.
Outsourced Food Supply Chain
This supply chain includes that McDonald’s outsource its activities related to procuring
and getting food supplies. There are various benefits of this that McDonald’s can focus on its
core activities which are preparation and service of food and beverages (Allaoui and et.al., 2018).
In this one important factor is that it is not always possible that suppliers and people who have
been involved in outsourcing of the food supply chain.
Stakeholder in this are;
Organisation which has been given the responsibility to supply food to McDonald’s and the
McDonald’s are stakeholders in this. Indirect stakeholder in this is producer of the food
ingredients.

In relation with McDonald’s their management dealing with suppliers and outsourcing agency is
the stakeholder.
Principles of Effective Procurement and Sourcing Processes
Procurement refers to action of obtaining goods and services in context of business. In
context of this report Procurement refers to activities which are undertaken by McDonald’s in
order to obtaining goods and services which are required for its effective operations and in order
to ensuring that it is able to efficiently deliver its products and services to its customers.
Sourcing is the term which refers to identifying the source of supply from where
procurements of goods can be made (Parniangtong, 2016). This is also first step of procurement
and procurement is followed by sourcing. This is very important step for McDonald’s as
effective and qualitative process and final products.
In order to ensure its effective procurement and sourcing there are few principles which
should be followed by McDonald’s-
Transparency
This is one of the most important principle for ensuring that procurement is effective and
this involves that McDonald’s maintains proper processing and is aware of all the steps through
which McDonald’s procure its goods and services. Transparency related to food also includes
that McDonald’s is aware of the whole process through which the food inputs and ingredients
were produced and processed. This can help McDonald’s to avoid any ingredient which is not
suitable for their final product. This also helps McDonald’s to function according to food safety
standards.
Integrity
This is also important principle of procurement, this involves that all the stakeholders,
more importantly this includes that McDonald’s have effective integration with its suppliers and
people who are involved with the process of sourcing and procurement (Fang and Natarajan,
2019). This also involves that McDonald’s have information of every of move of people who are
involved in procurement of the goods and services for its operations.

Total Quality Management
This is an approach of business organisation which include that quality of the goods and
service is ever improving and through the procurement McDonald’s can ensure quality of their
food and beverages from its very first stage. In food and beverages business it is important that
quality of the inputs and ingredients is good so that the final product is also possess high quality.
Sourcing Considerations for McDonald’s are quality of the supply this is important as
McDonald’s value includes providing best quality of the food.
Another consideration for sourcing and factor affecting selection of supplier is price. This
is also important as McDonald’s want to provide the food at affordable price and this is only
possible when the price of raw material is low.
LO2
Different Analytical Tools to support Effective Management Strategies
There are various tools which can be used by management of business to analyse various
factors and support management strategies. Some of the analytical tools are-
VMOST
The tool stands for Vision, Mission, Objective, Strategies and Tactical. Success of business is
significantly dependent on top-down or bottom-up alignment. This is a framework for internal
analysis (Aithal, 2017). This framework provides for effective analysis of all the internal factors
and current strategies of the business. Business strategies are important to analyse as these gives
direction and create basis for managerial strategies.
Vision
Vision of McDonald’s is that they want to be the best fast food provider across the globe.
Mission
To be the world’s best quick service restaurant experience. Best in terms of quality, service,
cleanliness, and values so that they can make every customer in every restaurant smile.

Objectives
 Better restaurant operations
 Branded affordability
 Creation of long term profitable growth for shareholders
 Increasing market share
Strategies
 High quality and branded product at affordable price
 Selective location decision making
Tactics
 Price bundling tactics like combo pack
 Attractive and attention seeking advertisements
SWOT Analysis
This is another tool that McDonald’s can use for its managerial strategies. This provides
insights about Strength, Weaknesses, opportunities and threats of the company. This is the tool
which can be applied by the company in order to know what are its strength and what company
can do to capitalize its strength. For Example one of the strength of Market power over suppliers
and competitors (Düking, Holmberg and Sperlich, 2018). This is strength of McDonald’s, this
can be basis of basis of managerial strategies which can move the direction of management
practices through which they can increase their power and competitive strength.
Some of the Strength of SWOT analysis are-
Through this tool company can identify what are its strength and weaknesses. This provides idea
about internal environment of business.
Opportunities can be exercised by timely identification of them and management can develop
strategies through which it can utilize the opportunities which are available to it.
Weaknesses of SWOT Analysis are-

Through SWOT analysis it is not always possible to identify right opportunity and threat as they
are based on assumptions rather than fact.
SWOT Analysis of McDonald’s is as follows-
 Strength
 Largest company in its industry
 Economies of Scale
 Wide Audience Reach
 Most recognised Brand in restaurant industry
 Technology initiatives
Weaknesses
 Franchise Business Model
 Lack of Employee satisfaction
 Lost charm of McDonald’s Breakfast Menu
Opportunities
 Innovative products
 Global Expansion
 Providing authentic local taste
Threats
 Investment in technology might prove risky
 Increasing competition
 New age fast food trends
 Environmental concern
On the basis of this analysis McDonald’s can make its managerial strategies, so that they can
capitalize value and strengths (Düking, Holmberg and Sperlich, 2018). Minimize threats and
impact of threats and success of business operations. Opportunities can also be utilized and they
can prepare themselves for facing the impact of threats on its business operations.

Different Management Practices for successful Business Operations
Management practices refers to action of management which are taken by them for the
purpose of fulfilling the business objectives and ensuring that actions of all other members of
business organisation are moving towards achievement of business objectives. Some of the
Management practices which are undertaken in McDonald’s for its successful business
operations are as follows-
Design Goods and Services
This managerial practice of McDonald’s is carried out for fulfilling its objective of
providing affordable products (Cirera and Maloney, 2017). Through this management practice of
McDonald they ensure that their serving size and price is according to expectation of consumers.
Advantage of this is that customers can be served best quality food and beverages in affordable
price and adequate quantity.
Disadvantage of this is that affordable products sometimes might compromise with quality.
Quality Management
This is another managerial activity which is carried out in McDonald’s. This practice of
management is aimed at maximizing quality of the products and maintaining quality constraints.
McDonald’s uses production line method to maintain product quality and consistency in the
quality of the products of the McDonald’s.
Advantage of this is that customers do not complain about quality of the products and they
remain satisfied.
Disadvantage of this is that Quality management requires continuous efforts and time.
Location Strategy
Location Strategy is one of the important reason behind success of the McDonald’s.
Location strategy of McDonald’s is aimed at establishing their locations at such places where
they can enable for maximum market reach. In this location strategy of McDonald’s includes its
restaurants, kiosks and website of the company and mobile app as venues. Through this location
strategy of the McDonald’s it reach to its customers in both traditional and modern ways.

Advantage of this is that locations of McDonald’s can be decided and designed where most of
the customers can access the McDonald’s.
Rewards and Recognition
This practice of Management is aimed at motivating employees of the company and
maintaining their morale so that they can perform to their best capacity. Employees have much
more potential than they show at work and they are able to recognise this is possible that through
effective strategies for Rewards and Recognition, McDonald’s can ensure that its employees are
able to perform and willing to perform as best as they can.
Advantage of this practice is that McDonald’s can motivate its employees and this will result in
improved performance.
Disadvantage of this is that it can create internal conflicts and unrest in employees.
Inventory Management
This activity is aimed at management of inventory in the way that cost of inventory can
be minimized while supporting restaurant (Pratap and Saha, 2018). The company McDonald’s
does not sell its products directly to the buyers, they coordinate with local and regional
intermediaries and distributors coordinate with McDonald’s management coordinate with all the
relevant people.
Advantage of this practice is that inventory management cost can be reduced by the company.
Disadvantage of this is that unpredicted customers can lead to shortage of inventory and non
appearance can lead to access inventory.
All these managerial practices help organisation to effectively carry out all its practices
and achieve its determined objectives.
CONCLUSION
On the basis of above analysis it can be concluded that there are various approaches of
supply chain in food and beverages industry. The important approaches of the food supply chain

are direct, short and outsourced food supply chain. Later principle for procurement and sourcing
were also discussed in this report which can make effective procurement. Later in this report
various analytical tools were discussed so that management can make effective decision
regarding their strategy which was followed by managerial practices which help in effective
operations of the organisation.

REFERENCES
Books and Journals
Aithal, P.S., 2017. ABCD Analysis as Research Methodology in Company Case
Studies. International Journal of Management, Technology, and Social Sciences
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Allaoui, H and et.al., 2018. Sustainable agro-food supply chain design using two-stage hybrid
multi-objective decision-making approach. Computers & Operations Research. 89.
pp.369-384.
Cirera, X. and Maloney, W.F., 2017. Managerial Practices as Key Firm Capabilities for
Innovation.
Düking, P., Holmberg, H.C. and Sperlich, B., 2018. The potential usefulness of virtual reality
systems for athletes: a short SWOT analysis. Frontiers in Physiology. 9. p.128.
Fang, F. and Natarajan, H.P., 2019. Sourcing and Procurement Cost Allocation in Multi‐Division
Firms. Production and Operations Management.
Griffiths, E.J and et.al., 2016. FoodON: A Global Farm-to-Fork Food Ontology.
In ICBO/BioCreative.
Parniangtong, S., 2016. Strategic sourcing: concepts, principles and methodology. In Supply
Management (pp. 5-14). Springer, Singapore.
Pratap, S. and Saha, B., 2018. Evolving efficacy of managerial capital, contesting managerial
practices, and the process of strategic renewal. Strategic Management Journal. 39(3).
pp.759-793.
Septiani, W., 2016. Method and approach mapping for agri-food supply chain risk management:
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