Operations Management at McDonald's: Value Proposition, Manufacturing Excellence, Service Quality and Profitability

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Operations Management
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Operations Management 1
Contents
Introduction......................................................................................................................................2
Value Proposition............................................................................................................................2
Established Value Proposition.....................................................................................................2
Emerging Value proposition........................................................................................................3
Process Map.....................................................................................................................................4
Manufacturing Excellence at McDonalds.......................................................................................5
Service Quality and Profitability.....................................................................................................6
Current and Potential Operational Challenges................................................................................7
Recommendations............................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Operations Management 2
Introduction
The purpose of this report is to enlighten the reader about the information about the company
McDonald’s along with the operational practices initiated in the environment as well. The report
evaluates established and emerging value proposition of the company along with its process map.
The process map helps in evaluating the process with which customer attain products and
services of the company in the market. Further, manufacturing excellence of the company
McDonald’s is analysed in the report. The relation between service quality and profitability of
the company is reported along with challenges and potential recommendations for the
organization. McDonald’s is an American multinational organization that is involved in the
business of fast food. The company has diversified its business in the worldwide market and has
more than US$ 22.820 billion. McDonald’s works effectively in the fast food industry and has an
effective operation system as well. More details about the report are discussed below:
Value Proposition
Customer value proposition refers to the process that explains the benefits that the customers will
receive after procuring the product from the company in the target market. It is the value that
vendor promises the customers to provide with respect to the payment those they will receive in
the market. Customer value proposition is very important for the business as it gives reasons to
the customers to purchase the products, it also provide the information with which the customer
can differentiate their product in the market (Heizer, and Render 2008). Further, the established
and emerging value proposition of the company McDonald’s is discussed below:
Established Value Proposition
Convenient Location: The outlets of the company are situated at place where the customer can
easily reach. The stores and restaurants of the company are present in malls and near grocery
retail stores due to which the customers get to easily approach to the store without going too far.
In fact on highways also the company has opened their stores for the comfortability of travellers.
Convenient location and availability of stores nearby increases the satisfaction level of customers
in the market (Davis, et. al., 2018).

Operations Management 3
Fast and Efficient Services: The company also provide fast and efficient services to the
customers in the market. As soon as the customer orders the product, the internal staffs start
preparing the food. The ERP system of the company efficiently delivers the order to be made and
delivered, looking at which the staff prepare the food at first come first serve basis.
Good Value Offering: The Company McDonald’s provide valuable products and services to the
customers in the market. The value proposition of the organization states that they aim to provide
tasty and valuable food to customers in the market at the nominal price. Good taste and healthy
food drives the will of the customers to purchase the food products from the company. Good
value offering is one of the biggest value proposition that the food organizations need to have in
the target market (Jacobs, Chase, and Lummus 2014).
Manage Localized Menu: The Company has attained efficiency in serving food on the basis of
local demand of the customer. McDonald’s is known for serving is differentiated menu at
breakfast to the customers. Further, on the basis of local demand, the company many time makes
changes in the menu at local restaurants. This kind of innovation in the menu increases the
satisfaction level of the customers in the market (Crane, and Matten 2016).
Emerging Value proposition
Emerging value proposition refers to the change in values and services offered by the company
that can increases the satisfaction level of the customers and attract them to initiate the sales of
the company as well. The emerging value proposition of McDonald’s is discussed below:
Broad Range of Food Choices: Apart from serving hamburgers, fries and puff etc. the company
aim to innovate the overall menu. They should aim to diversify their food and beverages
category so that they can attract more customers in the market. Increase in food items will
definitely increase the customer value proposition (Hanson, et. al., 2016).
Comfortable Seating and in-store facilities: Due to high demand of the products of the
company, the restaurant many times face the problem of congestion due to which approaching
customers have to either wait for too long return back. So, comfortable seating arrangement with
large arena and in-store facilities will increase the satisfaction level of the customers in the
market.