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    Value Chain Analysis for McDonald's

    University: Bloomsbury institute london

    • Unit No: 2
    • Level: Undergraduate/College
    • Pages: 9 / Words 2220
    • Paper Type: Essay
    • Course Code: LSBM103
    • Downloads: 391
    Question :

    This assessment will cover following questions :

    • Identify and evaluate the macro- and micro-environmental that impact and affect business organisations today.
    • McDonald is a fast food chain. Reflect upon theory on how the forces in the macro environment shape business performance of McDonald Firm.
    • Identify and explain strategic tools in the analysis of the internal business environment.
    Answer :


    Value chain analysis is used to enhance profits by creating goods or services that the consumers are willing to pay attention rather than the cost to develop it (Mudambi and Puck, 2016). Firm like McDonald must decides why they wants to enhance its values chain within the context of its competitive benefit to differentiate among its competitors. Present report lay emphasis on the description of the Value chain model through Porter. A description to the franchise business such as McDonald firm as it operates within the United Kingdom. It also focuses on the internal environment of Mcdonald by primary and secondary activities. Furthermore, it highlights on the Reflection regarding value chain model that assist to determine internal environment of firm.

    Value Chain Analysis

    It is considered as a combination of a system regarding a firm that able top utilizes to make the money. To create services or product , a value chain analysis made of different subsystems. It involves the process from beginning to end (Jaligot and et.al., 2016). This analysis is utilized as a tool for recognizes activities in as well as around a firm.

    Classification regarding value chain analysis

    Primary activities – These are the kinds of the functions that can be directly concerned accompanied by the conversation regarding input into output as well as circulate activities that are known as Primary activities. It involves

    Inbound logistics- Here in this process different range of actions such as storing,distributing as well as receiving that can makes the available services and goods regarding process called operational process. Such as transportation,handling and stock control (Fernandez-Stark and Gereffi, 2019).

    Operations- It involves the activities that able to modify input raw materials to the product ready for sale, it is known as final product for sales such as operations. The activities came under this criteria are assembling, machining, packaging.

    Outbound logistics- As per the name suggests these are the kinds of actions that assist in storage,collecting as well as delivering of the services and product to the consumers within inbound logistics (Hamilton-Hart and Stringer, 2016).

    Sales and marketing- All the actions such as sales,marketing, research ,advertising,public relations that can be used to make consumer aware regarding services and product as well as creates demand for it,came under marketing.

    Services- It means that the services can be provided by the consumers to maintain or improve the values regarding product such as it involves after sales services,financial services and many more.

    Support activities- These are the kinds of the actions that aids primary activities in achieving them as well as assists such actions. It includes

    Development of technology

    It needed development for heavy investment that takes years for development and research, its advantages can be enjoyed for various years (Rosales and et.al., 2017) .

    Human resource development-It is considered as the activities that are most common that excels all the activities of the firm. It encloses overall selection,promotion,transfer,retention dismissal of the employees and also their appraisal.


    It is the management system that able to gives ,its services to the firm. It includes finance,planing, information,government affairs and quality control.

    Procurement-Here the actions served the firm ,through supplying all the crucial inputs such as machinery,material as well as other consumable items that are needed by the firm regarding primary activities (Tadesse and Fayera, 2018).

    Operates business in the United Kingdom

    Franchise- This kind of business already established firm ,for example McDonald's that is owned through franchisor but can be managed through a franchisee. To use their business model franchisee sells the rights to the franchisor who can to pay the ongoing fee. Start-up cost and workload cost can usually lower,relationship with suppliers, marketers and Distributors already exists,business finance is acquired. Thus, huge amount of ongoing fees restrict franchise's benefits that are long term also cheaper operating methods that can be utilises unless sanctioned as well as negative activities through a fellow franchisee that may causes damages to the business environment (Purcell and et.al., 2017).

    McDonald's restaurant first opened within the year 1974, nowadays there are over 1,250 UK restaurant they create jobs,serves millions of consumers as well as gives opportunities to businesses and local people. Franchise of McDonald is known as the investment that is known as the appealing investment but for the firm it is really hard that they have to find out the right people. It is considered as a challenge as has a cash flow is about £110,000 - £320,000. Also, they make sure that they offer world-class support ,development and training to their franchisees. They also make sure to provides the benefits of branding and marketing that consider as one of the most established on the planet (Howieson, Lawley and Hastings, 2016).

    McDonald provides the long term relationship accompanied by the suppliers that are built regarding trust. They trust them to give great food as well as within return they trust to influence and respond to the market trends. Because of the investment they put into the building relationships as well as various suppliers and also prefreed trading consumers. They also feel confident as a franchisee by knowing that a secure supply chain within place (Fernandez-Stark and Gereffi, 2019).

    McDonald value chain analysis

    McDonald unable to take it as a rigid Framework through delegating the equal significances to all the actions . The affective value chain analysis does not need all the actions or functions at the same level. Thus, it can identify the significances of the activities as per their role within service or product process.

    Mention below some primary activities that can be directly included within selling as well as producing the product to the target oriented consumers. Some primary chain actions can enhance

    the performance as given below

    Inbound logistics

    To develop strong relationship with the suppliers it is required to store and receive as well as distribute the product. It is considered as the most vital as McDonald faces different challenges within product development phases. It needed a firm to highlights on each and every aspect regarding change from raw products to the end products. Some examples such as storing inputs, retrieving law materials and also distributing components and raw materials to the start production (Tadesse and Fayera, 2018).


    The significances of evaluating raw materials ,where McDonald's is ready to process the raw materials into the finished products as well as launch into the market. Such as packing,machinery, testing and assembling. Repair and maintenance of the equipment also came under this category. It Involves both service and manufacturing operations. It evaluates operational activities for enhancing productivity ,assuring the competitive success , maximizing the efficiency of McDonald. Enhance productivity can aid firm to accomplish regular economic growth , enhances profitability as well as set a basis regarding competitive benefit (Tadesse and Fayera, 2018).

    Outbound logistics

    Restaurant operates within following formats such as drive -thru,sit down restaurants,ski thru and counter-services outlets. Conventional process is follows by sit down restaurants as it includes waiter to taking order as well as delivering food . Also some activities are warehousing,transporting,material handling ,order processing as well as delivering to the end point. Firm optimize and analyses to explore competitive benefit sources as well as accomplishing objectives of business growth. As Outbound logistics actions managed timely accompanied by optimal cost as well as product delivery process that put a negligible negative effect regarding quality. It enhances growth opportunities and maximizes consumer satisfaction for the Organization. Firms must pay specific significances to the outbound logistics as it can offer goods that needed rapid delivery and are perishable to the end consumers (Mudambi and Puck, 2016).

    Marketing and sales

    At this step , firms will focuses on the differentiation and benefits points to the provided products to convince the consumers that they can offer better than the competitors. They are producing high quality products as well as unique features products at the affordable prices. Such as promotional activities,channel selection,building relations with the channel members, sales force,advertising with channel members (Jaligot and et.al., 2016). The firm can use the marketing funnel framework to structure its sales and marketing actions. The strategies regarding marketing can either be push or pull within nature. It rely on the Objectives of the businesses of McDonald, competitive dynamics,brand image as well as current standing within market.

    Wisely and effective integrated marketing actions can develops the brand equity of firm as well as it aids the firm to stand out from the competition (Howieson, Lawley and Hastings, 2016). Thus,it must avoids false commitment regarding the features of the product that are unable to fulfilled through the department of production. It also focuses on the requirement to assure coordination between various value chain actions (Tadesse and Fayera, 2018).

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    Secondary activities

    These support activities aid in coordinating as well as facilitating the primary chain analysis actions. It also benefits from evaluation as mention below.


    Effective infrastructure management enables McDonald to betterment the value regarding the whole value chain. It able to control the actions of infrastructure to strengthening the position that is competitive positioning within marketing. Such as legal matters handling,financing,planning,strategic management, accounting (Hamilton-Hart and Stringer, 2016).

    Human resource management

    It also evaluates the management regarding Human resources such as recruiting,training,rewarding,selecting, performance management and many more. McDonald's effective management enables to reduces the competitive pressures rely on commitment,motivation as well as skills of its employees. Here the company also accomplish its cost minimization objectives through evaluating training and hiring costs accompanied by their relative return. McDonald's workers heavily depends on the talent that can enhance the significances of this value chain actions (Fernandez-Stark and Gereffi, 2019). 

    Technology development

    In modern times all the actions regarding supply chain activities rely on the technological support such as in production,marketing,human resource actions, distributions needed to realize the significances of the development of technology. Such as product design research,technology supported consumers,data analysis, automation software and technology supported consumer services ,also the research and development department of firm is falls under this category (Jaligot and et.al., 2016).

    Reflection on value chain analysis

    As I came to realized that value chain analysis of McDonald's conducts to look out each and every step that needed to create a product. As overall goal is to deliver the maximizing values regarding least possible total cost (Howieson, Lawley and Hastings, 2016).

    Value chain analysis is used for communicating information, evaluating, gathering regarding decision-making that will assist the firm to recognizes all the activities as well as process within the firm. By the help of it can recognize primary as well as support activities that the Mcdonald's create.

    I came to realised that By the help of the VCA ,McDonald recognizes the value generating activities as well as their cost drivers. A huge benefit of value chain analysis is that it is a flexible framework to the business of McDonald's, their competitors and their respective places within industry's value (Tadesse and Fayera, 2018). It aids to understand the issues of the McDonald involved accompanied the promises of making consumer value commitments as it highlights on the actions that are required to deliver the value proposition.

    As per my view it allows McDonald recognizes the actions that are profitable or not. It enables firm to establish the cost drivers ,after tat it enables for lowering costumer values and improvement strategies to be applied. With the help of the Value chain analysis capable to identify areas with negligible cost to the distribution channel and raw materials (Hamilton-Hart and Stringer, 2016).


    From above, it had been concluded that Value chain analysis is a combination of a system involves the process from beginning to end. It includes Primary activities ,Operations, Outbound logistics, Sales and marketing-Support activities Human resource development. It also focused on the McDonald's restaurant that is operates within the United kingdom as McDonald long term relationship .It is already established firm can be managed through a franchisee. They make sure that they offer world-class support make sure to provides the benefits of branding and marketing McDonald's is ready to process both service and manufacturing operations to accomplish regular economic growth , enhances profitability. It also focused on the Reflection of McDonald , recognizes the value generating activities accompanied the promises of making consumer value commitments.

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