Operations Strategy Report: McDonald's and KFC Competitive Analysis

This report delves into the operations strategies of McDonald's and KFC, two prominent players in the fast-food industry. It begins by defining operations strategy and its role in aligning corporate objectives with market competition. The analysis of McDonald's explores its performance objectives, including quality control, global expansion, and market share, alongside its competitive factors such as product range, customer loyalty, and supply chain management. The report then examines McDonald's organizational structure, highlighting its divisional structure, global hierarchy, and function-based structure, as well as infrastructure elements like advanced IT and eco-friendly initiatives. The report then transitions to KFC, discussing its company background, performance objectives (quality, dependability, and cost), and competitive advantages. It also outlines KFC's organizational structure, emphasizing its hierarchical levels and communication methods. The analysis includes the alignment between performance objectives and structure/infrastructure elements for both companies, providing a comparative perspective on their operational approaches and strategies.

Operations Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
McDonalds.......................................................................................................................................3
Performance objectives and competitive factors.........................................................................3
Structure and infrastructure elements of the McDonald’s...........................................................4
Alignment between performance objectives and structure/infrastructure elements....................5
KFC (Kentucky Fried Chicken).......................................................................................................5
About Company...........................................................................................................................5
Performance objectives and competitive factors.........................................................................6
Describe 2 or 3 structure and 2 or 3 infrastructure elements for the company............................6
Alignment between performance objectives and structure/infrastructure elements....................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
Books and Journals:.....................................................................................................................9

INTRODUCTION
Operations Strategy refers to a term which is used by the companies as a tool to define
methods of producing goods or services served to the customer. By using such strategies a
company can identify and implement effective and efficient methods for using resources,
personnel and processes of work (Babbar, S. and Et.al., 2017). The role of operations strategy is
to specify the policies and plans for using resources of organization to support its competitive
advantage. Hill methodology in operation strategy provides a sequential framework that links
together the corporate objectives which serves direction to the company, marketing strategy
helps to define how a company will survive in competitive market and the operations strategy
which offers the capability to compete those market competition. Overall function of operation
strategy is to determine the competitive priorities of an organization; and such priorities are
transform into production requirements which is relatable to the structure and infrastructure
elements of the company.
MAIN BODY
McDonalds
Performance objectives and competitive factors
In McDonald’s, performance objectives are used to explain what is right and acceptable
in terms of behavior and output on the work. Management of the business develop these
measures and guidelines for their objectives to achieve performance in all the phases of the
McDonald’s. These are based on the budget of the organization. McDonald’s set their
performance objectives with an intention and motive of maintaining its market share as well as to
serve best fast food in the industry. Overall main objectives is to serve customer in less time
possible with quality food. Customer’s satisfaction is the aim of the McDonald’s. By the use of
latest and advanced technologies it serves multiple customer at a time. Their major investment is
for kitchen equipment as well as in automatic drink matters (Barnes, D., 2018). The fast food
chain is always look for innovative technologies that can be used for improved services to the
customer.
1. Quality Control: It involves the business functions that can improve and maintain the
provision of quality products and services. The individual who owns the franchise of the
McDonald’s have taught on the main operations of the store of the company. It majorly
involves employee management and operations in the kitchen of the McDonald’s. The
Company critically focus on the quality food and services that will be not compromising
at any cost and should be properly maintained in every store.
2. Global Expansion: The Company was intended to cover largest global market share in
the food retail industry. Currently, the McDonald’s is the leading food store in the whole
world, it covers almost 36000 stores in over 100 countries. The company is successful to
identify the cultures of many countries and their strategies for expanding is brilliant. The
Company aims at local people who are connected with local cultures, they are using their
marketing strategies and advertisements accordingly.

3. Market share: McDonald’s introduce some healthier and nutritional value such as fruits,
salads and oat meals in their market strategy to overcome the competition challenges.
Consumers are now a days are very health conscious, this kind of plan which are
introduced can attract and retain potential customers so that they can come and enjoy the
meal with no worries.
Competitive Factors of McDonald’s:
There are various fast food brands such as Burger King, KFC, Dominos, Wendy’s or
SubWay; has majorly grown in the competition of fast food services. McDonalds puts every
possible factors to stand out in the competition (Chang, S. H., Hernández-Díaz, R. J. and Lo, W.
S., 2020). There are various sources which have helped the respective company to grow their
business in the fast food industry.
 Product range and quality: McDonald’s serves a uniform menu globally, it is still quite
diversified and large with no substantial variations. The range includes cheese burgers,
hamburger, wraps, chicken McNuggets, French fries, Filet-o-fish, softdrinks, sundaes,
pies and many more.
 Customer loyalty: In this 21st century, maintain loyal relationship with customer is quite
difficult in this competitive market where there are varieties of options available for
switch to one to another. As the customer have the bargaining power and option to
switch from McDonald’s is pressurizing the marketing efforts. The brand has focused on
all such things and invest more in making strategies for higher engagement of customers
and in research
and development that might help in making such strategies.
 Supply Chain: The company establish higher standards and procedures; also product
specifications so that it can ensuring by the company to regular supply of good quality
raw materials. A food safety advisory council, made up of this company’s technical,
supply and safe chain’s specialists, as well as outside academia and suppliers serves
strategic global leadership in all aspects.
Structure and infrastructure elements of the McDonald’s.
McDonald’s corporation has a divisional organizational structure. In this structure, the
responsibilities are given as per the requirements of the operations. The main aim to help in the
organizational flexibility and autonomy to satisfy the business requirements.
Global Hierarchy: It has mainly focus on the corporate control in the situation of
managerial control and direction. It has cover hierarchy at global level in its global operations. It
could be difficult to other companies to structure in this way (Choi, T. M., Wallace, S. W. and
Wang, Y., 2018).
Performance-based divisions: It is the most dissimilar characteristic of McDonald’s
corporate structure. McDonald’s has served by the United States division for their biggest
regional sale. It is a major chunk represents by the combination of international lead markets to
their revenues of the company.

Function based structure: The Company has maintained their corporate structure on
function based groups. Such as companies has group for their human resource management,
supply chain management. Every section is lead by the superiors or corporate executive.
Infrastructure elements in McDonalds:
McDonalds’s is modern a sophisticated, the company is exhausting advanced IT and still
focus on maintaining the green activities. The company has taken an oath to make their
packaging and their stores or restaurants even more eco-friendly. By the end of 2025, the
company has a plans to recycle, renew and their certified materials with all its packaging and
will plan to put recycle bins of materials into their restaurants globally (Chuka, N. and Hrychuk,
H., 2020). Their new opened restaurants are built to use less power electricity, encourages energy
systems to control their heat, light and air consumption; to motion sensitive lighting and energy-
efficient kitchen equipment.
Being smarter with deliveries; McDonald’s focus on using lesser oil in their meals. Their
taskforces runs on biodiesel with almost half of the biodiesel coming from their used cooking oil.
By the use of biodiesel, it creates 6900 fewer tonnes of CO2 than low Sulphur diesel. The
transportation used by the respective company also take away the used cooking oil, kitchen food
waste, cardboard. This could be very beneficial to the company as it saves 5000 trips a year.
Alignment between performance objectives and structure/infrastructure elements
 The company is dealing with quality serving of foods deliver, they check their quality
over their quantity. The company delivers their foods in paper packaging so that it canno
harm environment and maintains green in the society (Kamarudeen, N., Sundarakani, B.
and Nabhan, M., 2018).
 It expands their business globally, as it requires proper management control and
direction to get employees towards their work. The company focuses on achieving
optimal use of available resources and recycles or renews them that can be cost effective
and motivates green activities as well.
KFC (Kentucky Fried Chicken)
About Company
KFC stand for Kentucky Fried Chicken which is fast food restaurant chain of America
having it’s headquarter in Louisville (Kang and Kim, 2017). The company is specialized for its
fried chicken and became the second largest restaurant chain of the world. KFC is operating in
150 countries across the world with 22621 locations. It is the first American fast food chain
which expand their business internationally and open their outlet in Canada UK Mexico and
Jamaica till mid 1960
Performance objectives and competitive factors
As KFC is specialized and known for its Fried Chicken it has been assumed that the
company as its main objective to sell second. The aims and objectives of KFC is not only to sell
chicken only or to make money from it but also they want to expand as a business all over the

world in various countries. They work with an objective to serve to their customers and better
manner and open up a few more restaurants around the country with Fast Service better customer
satisfaction with better services in order to beat their competitors (Lei and Zheng, 2017).
Performance objectives of KFC:
Quality: It is essential for any company to put efforts to improve quality in the products
or services that can be claimed to company. If things done in right manner and in right time
which can meet customer expectations and specifications for the products.
Dependability: It can be defined as doing things as promised that not only gains the trust
of the consumer but influence the prices which saves money and time and also efficiencies are
improved by giving stability.
Cost: The Company’s objective is to increase profits while reducing the cost. The
objective cost in the respective company is measured by the cost of manager, food’s cost or the
salary for the staff.
In order to beat their competitors the advantage KFC get from the market is through its
supply chain and distribution system. As AC is operating in around 150 countries all over the
world they have their good supply chain and distribution system which helps them to be the
second largest restaurant chain all over the world after McDonald's. This also allow the fast food
joint company like KFC to build a good relation with business partners in various regions and
establish therefore in that reason and which their competitors are struggling to survive. A large
foods 10 helps the KFC to maintain this relationship all over the world and attain raw materials
from them at cost effective manner to provide better products to their customers and gain
competitive advantage from the market.
Describe 2 or 3 structure and 2 or 3 infrastructure elements for the company
Organizational structure of KFC
In the year 1986 Pepsi company acquired KFC at the time when the company is trying to
explain its fast food service restaurants. In the current scenario the organization has two
departments for which David Nowak is the president of KFC and John Hill is the financial
officer leader and call in mood is director of marketing. In KFC the organizational structure has
six levels in which the upper most level is of management board which was the president and
regional directors of the company in the next level the company has general managers assistant
general managers unit managers and many more. From a survey it has been clear that KFC has
followed top down organizational structure and guidance system in the company (Manikas, Patel
and Oghazi, 2019). The communication in the organization between the managers has been
completed with the help of KFC portal email and a memo has been provided to the unit manager
share all the information with their work was either with the help of a copy of the orders or when
it on administration notice board of each branch of KFC. Organizational structure helps the
company to run their business in effective manner. The main benefits of organizational structure
to KFC are given below:

Global hierarchy: KFC is engaged in a business which is expanded in so many countries all
over the world. In order to manage this business effectively and efficiently the company has
involved in a hierarchy in which they have a strong organizational structure globally.
Division on the basis of performance: All the locations of KFC are not giving the same
response to the company hence the company creates an organizational structure in which they
offer division according to the performance and revenue generated by those regional sales.
Infrastructure Elements of KFC
KFC Company has a good infrastructure which helps them in their success. There are
various elements which help the company to improve their infrastructures which are given
below:
Information technology: The company KFC has chosen to utilize and effective Information
Technology team which helps them to develop implement and maintain professional Technology
solution support in the organization and enable them to make strategic plan for the organization.
The IT team of the company supports the restaurant in UK and builds a good Framework with
strong application of infrastructure.
Self-service system in the restaurant: KFC has introduced self-service system in the restaurant
which involve introduction of various Gadgets and Technology in order to improve the system of
self-service in the stores of the company. This tells our system enables the company to operate
with less staff in various regions and helps to provide a good service to their customers with less
biasness in their orders. The company has good infrastructure to provide this service to their
customers as they have an order Display Board in which the order number has been displayed to
their customers which helps to provide a great satisfaction to them (Osen and Et.al., 2017).
Alignment between performance objectives and structure/infrastructure elements
It is very essential to maintain a proper alignment between performance objectives of a
company and elements of organizational structure (Schwab and Et.al., 2017). In order to achieve
this success all over the world the company has taken a proper alignment between both of these
factors some of the points to explain this are given below
 The company is dealing with a great quality of fast food which helps them to deliver
more and more quality product to their customers. Maintenance of global hire ki all over
the world help the company to provide better services to their customers from their
representative of each unit.
 In order to expand the business all over the world the complete a proper management of
their team with a good communication system this has been noticed in case of KFC. The
management of company communicates with each unit of their food restaurant with the
help of KFC email portal which helps them to be in touch and provide of focus on
achieving their goals effectively and efficiently (TOMASSONI, 2019).
CONCLUSION
As per the above report, it can be concluded that for a business to run and to lead in the
competitive market, an operational strategy has to be planned and implemented. The most

important strategies followed in the above report is low-cost leadership and dividing the business
in multiple geographical structure. The multiple business has its major business in the existing
market as well as different customer have their different requirement and for the benevolence of
the customer and business, they expand their business into emerging markets also. The multiple
techniques also have proven to be helpful in decision making of the company such as SWOT
analysis, Pest Analysis, Competitive Analysis, Forecasting and Marketing Mix.

REFERENCES
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