Companies and enterprises that have been successful in different countries all over the world do not happen overnight. They have been vigorous, competitive, and principled. They have adapted to various countries they do business with. What is most strategic and encouraged to be heavily invested on is the supply chain management (Peleg-Gillai et al, 2006, p.5). As local and domestic business owners very well know, the supply chain is the life blood of their operations. But to expand it into the global scale is an all-together different arena – wider, more varied, and more complicated in colossally tremendous proportions. Be that as it may, it seems that the larger the enterprise, the more “grounded” on principles it needs to be to survive and thrive (Peleg-Gillai et al, 2006, p.5). The McDonald’s fast food chain, one of these global giants, would be an interesting study to prove this point.
McDonald’s boasts of 34,000 stores in 118 countries (Aboutmcdonalds.com, 2014), and is probably one of the most notable brands in the world. Its humble beginnings dates way back in 1944 and it opened its first international branch in 1966, in Canada. Eighty percent of its stores are franchised (Aboutmcdonalds.com, 2014). And despites the attacks on its products as possibly hazardous to health, the corporation remains to grow strong and seems to here to stay to be enjoyed by our grandchildren’s children.
McDonald’s Supply Chain
McDonald’s supply chain is called the “three-legged stool concept”: SUPPLIERS -> COMPANY -> FRANCHISEES (Saravanan, 2012, p.11). These are the key players in ensuring that the flow of product is fast, cheap, and secured (Peleg-Gillai, 2006, p.5). According to McDonald’s, these players are enjoined to own their Supply Chain Vision for sustainability. Sustainability is precisely the challenge to uphold to maintain a world-wide entrepreneurial operation (Peleg-Gillai, 2006, p.5).
McDonald’s vision is a supply chain that produces goods that are high-quality and safe, and yet profitable and without interruption. By leveraging in their position as a global business giant, their aim is to be productive and beneficial to every entity that is involved in the fast food by focusing on improving their so-called 3Es: Ethics – they want to ensure that their suppliers follow good business practices, employee care, and animal treatment; Environment – they prioritize use of environment-friendly products in their operations; and Economics – they are zealous in delivering food that is affordable and disease-free for the communities they are serving. (Aboutmcdonalds.com, 2014)
Strategies: Adapting to Local Taste
McDonald’s have different menus in each country, and some similar products may taste differently. For example, McDonald’s in Japan serve shrimp burger, while vegetarian burger is available in India (Saravanan, 2012, p. 5). Burgers for the U.S. market are considerable bigger than for the Asian market, and burgers sold in the Philippines are a little saltier. The many benefits of customizing the menu for local taste include: ingredients are available and cheaper for the unique product in that country; the supply is more sustainable when adjusted to the country’s situation and available produce; and (the most obvious and profitable of all) this is more appealing to the local market.
The Cold Chain
McDonald’s India claims to the conception of this ingenious method in protecting the integrity of the food products during transit in the chain. Hot, tropical countries especially need this system as food is highly susceptible to quick decay in these countries. Perfecting the system took a few years, but this is a very good example of heavy investment for the improvement of the supply chain having great return and long-term benefits. Products are kept frozen to retain their freshness and nutritional benefits from the time they are procured. Warehousing is set up as important part of the cold chain, and the goods are kept frozen during transportation up to the retailing of food products. (Saravanan, 2012, p. 13).
Co-Branding
It is highly popular in movies, when a company pays for a film to show their products to be used by a famous actor on-screen. Though, in fast-food chains, these tie-ups with other companies have much more long term mutual benefits. The fast food chain negotiates pricing that reduces its expenditures greatly while perpetual repeat orders benefit the supplier, which establishes a steady and lasting relationship to both parties. The big example in these tie-ups is with Coca-cola (Saravanan, 2012, p. 9). McDonald’s serving only Coca-cola products in all of its 34,000 stores is a great market platform for Coke, and a great edge against its competition.
Conclusion
There are many more strategies, localized policies and principles McDonald’s employ to maintain its vast network. Each franchise and store has their own techniques and strategies, adjusted to address the particular community they are in. But, however varied their approach to selling the brand, a unified approach, like the 3Es, will keep the brand intact and make the expansion more sustainable, that wherever one is in the world, every McDonald’s store will feel home.
References
Aboutmcdonalds.com. Sustainable Supply Chain. (2014). Retrieved from http://www.aboutmcdonalds.com/mcd/sustainability/our_focus_areas/sustainable_supply_chain.html
Peleg-Gillai, B., Bhat, G., and Lesley, S. (2006 July). Innovators in Supply Security: Better Security Drives Business Value. Washington, DC: The Manufacturing Institute
Saravanan, P. (2012, Jan. 8). Supply Chain Management and Distribution Management: Perishable Products (Restaurant Chain). Chennai, India
