Mcdonald's Value Chain Analysis

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Have you every thought about every food item you consume in a day? Where does it come from and how did it get to your plate? The activities required for food items to be extracted from its source and delivered to your plate must go through a cycle called a value chain. It consists of 2 sections; primary activities and secondary activities. Primary activities involved are inbound logistics, operations, outbound logistics, marketing and sales, and service until it reaches the hands and mouths of the consumer (Porter, 1985). Secondary activities include procurement, human resource management, technological development and infrastructure (Porter, 1985). The value chain requires both primary and secondary activities to work efficiently and effectively to ensure that goods get passed down stream to the market. Businesses invest in value chains as they are designed to enhance the value of the product through “effective coordination of operational and organizational support activities” (Gooch, 2005). This paper aims to define two food items consumed during breakfast and track their value chain from start to finish, focusing on the primary activities. The two food items to be discussed in this paper is Tim Hortons coffee and BC eggs. Tim Hortons value chain aims to illustrate environmental impacts, and BC eggs value chains aims to illustrate economic impacts.

Top executives of Chipotle conscious about the quality of food in its restaurants. Thus, Chipotle did not buy food ingredients directly from farmers and restaurant supplies from manufacturers. Chipotle acquired long-term relationship with food industry suppliers of good reputation that able to meet their quality specification. The company makes purchases from a list of granted suppliers that provide key ingredients. Some ingredients such as beans are organically grown produce. Chipotle uses high quality, nutritious and fresh raw ingredients for their food preparation.

The purpose of this paper is to do a value chain analysis of Costco, identify their resources and capabilities, to conduct a SWOT analysis to identify the opportunities in which they are lagging and to form a strategy to move forward using the recourses and capabilities in the direction of utilizing those opportunities.

The way fast food advertises is extremely popular with the media. Children are targeted through this because they are the ones who watch a lot of television. Great advertising techniques such as flashy colors and celebrity figures are luring children to try their product. One of the most popular out there for kids is Ronald McDonald. When it comes to

McDonald's has successfully created a brand/name for itself as the leading fast food retailer in the world. It is somewhat of impossibility for one to not come across a McDonald's with over 30,000 local restaurants in over 100 countries (McDonald's, 2011). Those restaurants are owned either by a franchise owner or a corporation; a percentage of all the earnings from a franchise owner, including a percentage from their annual revenue go to McDonald's.

McDonald’s famous Happy Meal is marketed specifically towards children; the food comes in its own bright colored box with a special toy that is constantly changing to keep up with the newest fads. McDonald’s also builds indoor playgrounds for kids to use while they have their meal, which attracts children and their parents. Of course, Ronald McDonald the clown, McDonald’s notorious mascot is also used to lure children into the restaurants. Another marketing example used on children is the placement of unhealthy treats near the checkouts in retail stores. The products, usually placed at a child’s eyes level, are colorful and sometimes have cartoon characters that appeal to children. Soft drink companies also endorse their products with popular celebrities and cartoon characters who are often admired by children. Food companies are also causing poor eating habits in school cafeterias where kids are offered fast food, burgers, chips, candy, fries, pizza, and sugary drinks. In the documentary Fed Up, Stephanie Soechtig discloses that “In 2006, 80% of all high schools operated under exclusive contracts with soda companies and by 2012 more than half of all U.S. school districts served fast food” (Soechtig). Setting children up for failure by offering unhealthy and addictive food options, administrators are hoping the kids can make healthy decisions. Food

Schools no longer cook meals, but rather reheat meals given to the school through the government. Sodexo representative Barbara Brown in one school says, “Part of our position is that we’re hoping that through nutrition education, the students will learn to make the right food choice,” yet she represents schools that give snack bars, Gatorade, and pizza as school lunches (Spurlock). McDonald’s especially caters towards young children. According to Spurlock’s Supersize Me, a study showed that children predisposed to the good feelings of cigarettes, without knowing what they are, have a higher tendency to smoke by the time they are of legal age. This theory can be applied to McDonald’s; children raised with McDonald’s Playplace, Happy Meals, kid’s toys, and french fries are more likely to grow up to go to McDonald’s more frequently than those who do not (Spurlock). McDonald’s catering to children is a good business move for them because it appeals to the parents that they care, and at the same time expose the children to their food, thus raising business and potential customers in the long run. “The most heavily advertised foods are consumed the most,” (Spurlock). In 2001, McDonald’s spent 1.2 billion dollars on direct advertisements. The children who have dinner in front of the television are raised by the advertisements and cartoons featuring

Almost sixty-four percent of its stock holders held are institutions. Places such as, Bank of America, Northern Trust Corp, Wellington Management Co and many others that are interested in this company’s growth. Since opening in the middle of 1960’s, McDonald’s any one can recognize its trademark golden arches. We as Americans cannot turn a street corner without seeing a different McDonalds down the road. They are located everywhere, but that just means more profit for the company and its stockholders. The company owns and leases out real estate primarily in connection with its restaurant business. It generally owns the land and buildings or secures out long-term leases for the restaurant sites.

REFERENCES•www.mcdonalds.com, accessed on 18 July, 2008•www.mcdonldsindia.net, accessed on 18 July, 2008•en.wikipedia.org/wiki/McDonald's, accessed on 19 July, 2008•http://www.associatedcontent.com/article/263943/mcdonalds_strategic_marketing_mix.html?cat=4, accessed on 19 July, 2008•www.kfc.com, accessed on 25 August, 2008

McDonald's is the world’s leading food service retailer with more than 30,000 local restaurants in 121 countries serving 45 million customers each day.

Even though Dunkin Donuts is an international business, each individual store has its own set of goals and missions to achieve success. This is also known as the value chain, which is “the process or activities by which a company adds value to an article, including production, marketing, and the provision of after-sales service.” (Oxford) After observing and working for Dunkin Donuts, the business’ success is primarily based off the happiness of their loyal customers and smooth teamwork of their employees. This particular Dunkin Donuts on Western Avenue in Peoria, Illinois is faced with a lot of challenges, but with the right approach to these challenges can make their business even more successful.

McDonalds Corporation had developed to become the leading fast-food chain of restaurants since its inception to the extent that it serves more than 47 million customers across the globe on a daily basis. The corporation is the largest global food-service retailer since it has over 30,000 local restaurants that serve approximately 52 million people in over 100 countries every day. One of the critical factors attributed to the success of McDonald's global business is operations management, which focuses on the careful control of processes that are used in manufacturing and distribution of goods and/or services.

McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants. There are over 31,000 McDonald’s locations worldwide primarily selling hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, and desserts.

Furthermore, the corporation was heavily condemned by the public for exploiting children market and causing childhood obesity. Indeed, McDonald’s has been using advertising which mainly targeted children. As a result, according to the survey to American school student in 1996, 96 percent of all children could identify Ronald McDonald (Cohen, 2011, p8-5). How was McDonald’s able to achieve the above result? McDonald’s children marketing strategies were very simple but extremely effective--to give small toys as a treatment to children in order to appeal to their interests. With the repeated uses of this psychological influencing tactic, children would subconsciously make a connection between McDonald’s and toys. Therefore, children, who were under the influences of McDonald’s marketing strategies, could not help to think of McDonald’s whenever thinking of toys.