1.

To what extent would McDonalds change its operations strategy to

accommodate the growing need for flexibility and variety in products? What is
required, mere tweaking of its strategies or dramatic change?
McDonalds Operations Strategy
Structure

Infrastruc
ture

Element
Capacity

Strategy

Facilities

McDonalds facilities are all focused around

the same menu. The uniformity of facilities is
beginning to change, as detailed in the case.
Began as low-tech, moved to mid-tech. A
leader in the technology of fast-food delivery
Long-term relations with suppliers
Franchisees: well-trained, carefully selected
Operators: cheap (high school, senior
citizens)
Produce foolproof processes
Centralized buying
Bulk contracts

Process
Technology
Sourcing
Workforce

Quality
Production
Planning &
Control
Organization

Growth as need through additional

stores, but capacity added carefully.

Franchisees push to locally optimize, within

the guidelines provided by the corporation

Some observations about the strategy:

It is remarkably internally consistent. Each element of the strategy supports and
matches the others. Foolproof manufacturing process technology fits with the
operator policy; facilities structure provides consistency which supports the
quality policy and so on. It is a jigsaw in which every piece fits.
It has been extremely well-suited to the competitive requirements of its market.
It provides predictable quality, at reasonable prices, no matter which restaurant
one chooses.
Even if the competitive environment has changed so that this elegant winning
formula may no longer be appropriate, it is not clear that McDonalds can
develop another one just as good. It may have just happened to discover this
winning formula (there is, of course, a strong survivorship bias in effective
Operations Strategies). We cannot be sure, therefore, that McDonalds can adapt
it to deal with the growing competitive threats.

2. To what extent would environmental concerns compromise McDonalds

traditional strengths and complicate an already challenging competitive
situation?
McDonalds had to do something about the environment, and collaborated with
the Environmental Defense Fund (EDF), well known for their vociferous
environment campaigns, rather than developing its own, internal environment
strategy.
McDonalds now faces the risk that certain practices, which were environmentally
unsound yet essential for continued operation, would be exposed and used as a
weapon against it. Furthermore, the EDF is not in the business of making
hamburgers, and may not have shared the expansion-based goals of McDonalds.
There are a number of points in the case that allow us to determine the nature of
McDonalds emerging position concerning the environment. Each of these may
be mapped against its operations strategy to determine which fits, and which
doesnt.
Policy
Careful attention to detail
Local autonomy in operations
methods solid waste is more
important in Massachusetts than it
is in Texas
Working with suppliers on the
environment
Changing materials (and supplier)
when it becomes clear they are
environmentally disadvantages.

Consistency with Operations

Strategy
Yes
No

Yes
No

Clearly, if McDonalds were to fully embrace these environmental issues, some

elements of its winning operations strategy would be inconsistent with them. The
most notable of these is the provision of autonomy to deal with local
environmental needs. This is an added complication that McDonalds may simply
have to live with.