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SS MG106 Strategic Management

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SS MG106 Strategic Management

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Course Code: SSMG106
University: London School Of Economics And Political Science

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Country: United Kingdom


1. Identify key candidate order winners and qualifiers for an organisation of your choice and examine how that organisation might deliver and improve on the order winners/qualifiers.  Discuss the potential implications of delivering improved level of the order winners/qualifiers (or lack of improvement) on the organisations’ supply chains.  Support your discussion with relevant literature 
2. Choose an organisation of your choice and describe the business activities, analyse the service delivery process or the manufacturing process, identify what should be done to improve the processes and discuss why the organisation is successful (or not successful). 


1. Introduction:
In recent years, much attention is been laid on the business service sectors. There are many people working in the service sectors as compared to the others. For any organisation that is involved in customer services, it is very crucial having a clear understanding of the substance and the nature of the services which match the specific needs of the customers. One of the significant task of the services is reducing the gap in between the expectations of the customer as well as the actual perception of the service that is received. Due to this reason most of the companies make use of the customer oriented strategy for developing the value generating process of the customer and for meeting the needs and the requirements of the customers. As per most of the scholars, a more successful approach for business might be a Service excellence strategy. According to West, Ford and Inrahim (2015), “Service excellence is the ultimate robust strategy. It is the route for an organisation that wishes to be a long-term player in a market”.
McDonalds has always been regarded as one of the best recruitment histories in the process of hiring quality staffs which provide outstanding services to the customers. This paper is going to elaborate on discussing the service delivery process of McDonalds. With the same, it shall also identify what should be done for improving the processes as well. Lastly, it would discuss why the company is successful or unsuccessful in terms of the service delivery process.
2. Discussion
2.1. Company Background
McDonalds was founded in the year 1955 on 15th April and it is headquartered in Illinois, USA (Hayes and Wynyard 2016). It is a worldwide notable foodservice retailer that has above 35,000 restaurants serving about 50 million people all around the world. Most of the restaurants of McDonalds are operated and owned by some independent owners by means of franchising contracts. The main goal of McDonalds is to become the favourite place for its customers for eating and drinking by serving their main favourites like Chicken McNuggets, Big Mac, Quarter Pounder and French Fries (Dimitrova and Petrova 2016). It is also to mention that the strategic direction of McDonalds is the unity of three significant elements- the company, its suppliers and its franchisees. The strategic and marketing plan of the company is known as the “customer-focused Plan to Win” and it is based on the marketing mix of the 4Ps- People, Promotion, Place and Price (Mahajan 2014). This approach of McDonalds helps it in providing a very common framework for the global business with the main elements of the local adaptation.
2.3. Service delivery process of McDonalds
The highly fierce industry competition and consumer demands for the value and quality within the fast food market has a very notable impact on each and every aspect of the company. With the same, the downturn has amplified the mutual requirements for reducing the costs as well. It is to mention that McDonalds have set itself towards achieving this by taking initiatives on adopting the “lean” focus (Crawford 2015). This concept of “lean” manufacturing was developed initially by the Toyota Motors around 1970s which had led to a set of important practices that shaped the entire lean approach. This section of the paper shall examine each of these practices to determine whether McDonalds have made use of this approach for delivering its services to its consumers.
The quest towards meeting the demand instantly and that too giving perfect quality is at the heart of the lean philosophy. Hence, Toyota has identified the seven different sources of waste that the lean business need to strive for eliminating and they are- Over production, waiting time, process of transportation, inventory, defectives and motion.

Over production- Initially, McDonalds used to prepare finished sandwiches in huge batches ahead of the time and used to keep them heated in their warming bins to make them ready for sale (Waheed et al. 2016). Although, this process used to ensure both reliable and quick service, at the same time, it also made them earn a poor reputation for waste and quality. With the decrease of the market share, a new system was established- limited stock of salad ingredients, patties and the side dishes are pre-prepared but McDonalds only combine them into the finished sandwiches when they are ordered by the customers. This process takes less than three minutes in total and this enables a very quick response for any change in demand that is unexpected.
Waiting time- The modern technology has eased the process of “made to order” by slashing the times of waiting, both in terms of the customer demands and the production purpose (Gallotte 2016). The computer based system helps in communicating the order of the customers directly to the company’s production staff and with the same, the modern cooking equipment could help in preparing a batch of the hamburger patties within just one minutes. It is also to note that McDonalds have made a split in between the service time and queuing time. This means that, once the customers pay, they ask them to move to the side while they are preparing their order and at the same time, they serve the other customer and this gives a perception of a continuous flow of movements. The total time might not change but it is spread in between several stages.
Transport, motion and process- The excess handling of the goods around the operation results in transport wastes a lot. McDonalds has always been regarded as the pioneer of the fast food kitchen layout that tends itself well to the aspect of lean philosophy. It is known as the “speedy system”. This system was originally designed by the McDonald brothers. It unites the whole operation so that all the facilities of preparation are related with each other in an order of the assembly line in which every worker has a particular task to do. This also helps to keep the transport waste to minimum level as it is very close to propinquity to the counter. This binds in with the idea of motion waste and process. With the same, the assembly line helps in eliminating the unnecessary procedures and every task is simplified for ensuring that the exact value is been added. It is also to mention that the assembly process of McDonalds is no way different from any manufacturing plant. They gather the performance and productivity data in order to improve the service delivery process.
Inventory- As per the Toyota, the lean companies should eliminate every inventory (Yusof and Aoki 2016). This is due to the fact that holding the stocks often sustains an opportunity wastage and cost. Notwithstanding this, McDonalds should be capable enough to meet the demands every times. Hence, along with the processes that are detailed above, a more sophisticated stock controlling system prevails for managing this process all through the supply chain.
Defectives- It is to mention that the lean production depends upon getting the things right and that too, with absolutely zero defects. McDonalds heavily invest in training its staffs and motivating and encouraging them for achieving the highest standards. With the same, the simplified tasks also help in reducing the rate of defective goods. Moreover, McDonalds also have the policy of “first in, first out” (Smith, Hadfield and Dunne 2016). This helps in ensuring that their customers are receiving fresh food in their every orders.
Involve everyone- The seven forms of waste of Toyota underlines the vitality of the total employee involvement in the lean companies. It is to mention that McDonalds pays much attention on working together as a team and it involves each of its suppliers and crew members for fostering high level of personal responsibility for every tasks. With the same, they multi-skilling helps in enabling the staffs for learning each stage of the business operations.
Continuous improvement- It is to mention that the lean philosophy is basically based on a range of ideas like “no waste” or “perfect quality” (Gillebo and Skogli 2014). It would be really very unrealistic to claim that McDonalds have attained them in full. However, the belief is that the company should attempt to get closer to them gradually. Hence, a continuous improvement is a very important element on the basis of which the organisation places a continuous focus through sharing best practices and regular audits.

Hence, it is to state that the service delivery System at McDonalds is a very comprehensive design which comprise of an efficient layout of the equipment and facilities. It clearly defines the roles, procedures, standards and responsibilities. All these factors collectively produce a very efficient system which has some very predictable outcomes. It is indeed one of the most significant aspect of the service delivery systems which ties in which the concept of service.
2.4. Improvements to be done
In this highly competitive environment, the service based businesses is required to capitalise on any of the opportunities for setting themselves different from the rest of their competitors within the industry. During the process of implementation, the service management and system details are very crucial. Hence, the best way of distinguishing their business is by fostering a very strong customer relationships on the basis of service quality. However, below is mentioned some recommendations for McDonalds’ service delivery process:

McDonalds need to have a very cost effective materials and labour as their profits is highly dependent on it.
McDonalds should match its investments in processes and products to its investments in its people. While designing some new customer experiences, McDonalds should lay greater focus on designing the performance of its staffs and developing some really effective tools which would enable them to deliver the same.
McDonalds should stop being the laughing stock of its workforce. In these days, “flipping burgers” of McDonalds is regarded as a bad gig (Adams 2017). It is high time for rebuilding a good reputation of “working for you”. McDonalds is regarded as being the company to offer the least desirable jobs in the contemporary world and if it continues to be so, it would employ the people who would simply not care of the company and its management system.
Training is the key for everything. McDonalds should work towards training its employees and staff members to ensure effective service delivery system. Moreover, skimping on the employee trainings and franchisees is equal to ignoring the highly difficult elements in their formula for the organisational success.
It should be noted that the customer service quality of a company does not improve by means of just hanging a poster or by simply holding a half-yearly webcast. Improvements in the customer service takes place over time by means of multiple behaviours and activities. Hence, McDonalds should make sure to reinforce and repeat daily for ensuring its employees stay committed and sharp.

2.5. Why the organisation is successful 
McDonalds is regarded as the world’s most successful restaurant chain (Fu and Ryan 2016). One of the main factors behind this is its effective service delivery system. The company has split the total waiting time in between the service and queuing time. Also, the company heavily invest in training its staffs and motivating and encouraging them for achieving the highest standards. Moreover, its policy of “first in, first out” helps in ensuring that its customers are receiving fresh food in their every orders.
Hence, service delivery process of any company is a critical component of their businesses which defines the communications and interactions in between the clients and the providers. It is a very important aspect of industries, especially the food and hotel industry. From the above discussion it is clear that earlier, McDonalds used to make use of batch processing system. However, at present, it has opted for a new system by making limited stock of foods being pre-prepared and later, only combining them into the finished items when they are ordered by the customers. It is to mention that McDonalds is delivering its best to maintain an effective service delivery process within its business but it lack many aspects of it. Hence, several recommendations are been made for the part of the company in order to improve its service delivery.
Adams, R., 2017. Standard of Living as a Right, Not a Privilege: Is It Time to Change the Dialogue from Minimum Wage to Living Wage?. Business and Society Review, 122(4), pp.613-639.
Crawford, A., 2015. McDonald’s: A Case Study in Glocalization. Journal of Global Business Issues, 9(1), p.11.
Dimitrova, S. and Petrova, E., 2016. Mission and Vision of the Organization and Their Relations with Corporate Social Responsibility. Plovdiv/BULGARIA, p.57.
Fu, H. and Ryan, C., 2016, May. Glo1656 Fast Food Culture When Being a Tourist–Chinese Tourists’ Consumption of McDonald’s in New Zealand. In 2nd Global Tourism & Hospitality Conference (p. 43).
Gallotte, A., 2016. Titania: The Technical Process of Bringing a Costume to Life.
Gillebo, M. and Skogli Pettersen, M., 2014. Lean product development systems.
Hayes, D. and Wynyard, R., 2016. The McDonaldization of higher education revisited. Routledge Handbook of the Sociology of Higher Education, p.1631.
Mahajan, S., 2014. Competitive advantage through training and development in Mcdonald’s: a case study. International Journal of Management, IT and Engineering, 4(10), p.403.
Smith, S., Hadfield, A. and Dunne, T. eds., 2016. Foreign policy: theories, actors, cases. Oxford University Press.
Waheed, S., Cabot, J.M., Macdonald, N.P., Lewis, T., Guijt, R.M., Paull, B. and Breadmore, M.C., 2016. 3D printed microfluidic devices: enablers and barriers. Lab on a Chip, 16(11), pp.1993-2013.
West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage. Oxford University Press, USA.
Yusof, S.R.M. and Aoki, K., 2016, March. Proposed Lean Sustained Factors. In Sixth International Conference on Industrial Engineering and Operations Management, KL, Malaysia (pp. 8-10).

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