STRATEGY ALIGNMENT

FRAMEWORK
INSTRUCTIONS
• Please read Zook/Allen Article.
• Please also watch the lecture videos on Alignment and also refer to Lecture Slides.
• Please watch 3 film videos of Founder Movie.
• Then answer questions on the next page.
• Upload to moodle: one per team
• Upload should be 4 hours before class time.
STRATEGY ALIGNMENT FRAMEWORK
• Part A

• 1. What are the MAJOR high level difference(s) between the McDonald (fast food) production process and
that of a typical sit-down restaurant—that make a FUNDAMENTAL DIFFERENCE to its PROFIT (= REVENUE-
COSTS) performance? [HINT: location/layout of kitchen].
McDonald (fast food) Typical sit-down restaurant

Efficiency and Speed
• Prioritizing speed and efficiency over
anything else in the production process.
• Prioritize fast service to serve many
consumers as possible.
• Dining experience more leisurely.
• Since meals are frequently prepared by
request, customers may have to wait longer.

• Minimal wait time since meals are prepared

ahead of time and assembled quickly.
Open Kitchen Layout Closed Kitchen Layout
Kitchen
• Customers can observe how food is • The entire process of preparing meals is
assembled and prepared. hidden from customers.

• The dimension of this open layout tends to • The kitchen is often larger and prepared to
be smaller, and it is well managed for speedy handle a wider variety of cooking methods
service. and menu items.
 McDonald (fast food) Typical sit-down restaurant

Space and Seating

• The design is intended for fast turnover. • These businesses tend to have larger dining
areas and often allow a greater amount of space
• Provide a limited number of seats and prioritize per customer, which can increase real estate
takeaway and drive-through orders. costs.

Customers Expectation • Value efficiency and price- not- service and • Sophisticated dining experience with attentive
ambiance attention and a welcoming atmosphere is
anticipated.

Labor Costs Lower Labor Cost: High Labor Cost/ full service = more employee

• Specialized role (specific task) • Diverse Roles

• Standardized Process • Skilled chefs
• Minimal menu complexity • Tale service
• Automation (self-order) • Hosts/ Hostesses
• Diverse menu (require more kitchen workers
and a greater range of skills in cooking)

Profit Margin • operate with lower profit margins, however • A higher profit margin on each meal, even
due to their quick-service, they make up for it though there may be fewer consumers served in
with huge sales volumes. a given period of time.
STRATEGY ALIGNMENT FRAMEWORK
2. Examine the physical/space production McDonald as in the video/images. What are the major design choices
which generate operating efficiencies? [How does the tennis court iterations 1-2 and 2-3 improve the process?]

The first iteration changed the design in a way that there were no more "passages" between the kitchen's
equipment, which in return avoided the collision of employees while they were trying to reach the needed
equipment and ingredients.
The second iteration consisted of equipping the related kitchen units in a rectangular form so that each unit is
adjacent to other two units, which enabled each employee to perform his task while staying in one position,
and then passing the order directly to his peer.
These adjustments created, as one of the McDonald brothers said “a symphony of efficiency ...with no waste
of motion”.
STRATEGY ALIGNMENT FRAMEWORK
3. Does the kitchen layout relate to the value chain? How?
The value chain is a sequence of activities that a firm operates to be able to generate and provide a product or
service to its clients. A well-designed kitchen layout can benefit several phases of the value chain such as:

Procurement activity: The design of a kitchen may influence how food and supplies are obtained, kept, and
accessed. A well-designed structure can help to speed the procurement process, eliminate waste, and
improve inventory management.
Production process: The layout of the kitchen can have a considerable influence on the manufacturing
process. A well-organized kitchen improves food preparation and cooking by preventing delays, increasing
efficiency, and maintaining consistency in food quality.
Cost efficiency: By eliminating the need for surplus labor, cutting energy consumption, and maximizing the
application of tools and materials, an efficient kitchen layout assists in lowering operating expenses.
Customer Service and Delivery: In a restaurant or hotel business, the design of the kitchen may affect how
quickly and effectively services are provided. Order preparation and delivery may be accelerated in a well-
organized kitchen, increasing client satisfaction and customer loyalty.
STRATEGY ALIGNMENT FRAMEWORK
4. (Then) How does value chain relate to business strategy, high level (Porter)
The value chain idea is crucial in establishing a company's high-level strategy. According to Porter, the value
chain has the following high-level connections to company strategy:

Cost-Leadership Strategy: A business may recognize areas, such as in procurement, production, and
distribution, where cost reductions can be obtained by examining each stage of the value chain. To reduce
manufacturing costs, a business can, for instance, invest in technology or processes enhancements.
Premium Strategy: The value chain is essential in implementing this strategy because it identifies areas where
value-adding operations might improve the product or service. Businesses may invest in R&D, marketing, and
customer service to differentiate themselves at various levels of the value chain.
The value chain framework developed by Porter is an essential component of high-level company strategy. It
assists firms in evaluating their internal operations, identifying opportunities for improvement, aligning
activities with their preferred strategy, and eventually creating a competitive edge in their field. Businesses
may make better choices regarding where to invest money and effort to accomplish their strategic goals if they
understand how value is produced inside the firm.
STRATEGY ALIGNMENT FRAMEWORK
Part B For answering questions below you can think of non-negotiables internal factors (not visible to customers) that lead to external factors
differentiators (not visible to customers) and together they are coupled by a feedback loop of robust learning system. Zook/Allen approach
refines the Porter and makes it more fine-grained. This is the modified Triangle approach where differentiators and non-negotiables as well as
robust learning systems play a role.

• 5. What are key differentiators (Zook/Allen article) of McDonald when it was established? What is the role of
kitchen layout in business strategy of McDonald, i.e., key differentiators?
• Key differentiators under the category “Production and Operations”:
1.Robust and fast process of food preparation (kitchen design), which solved the problem of long waiting time found in other
restaurants.
2.Standardized way of products and service offerings, which removed inconsistencies and wrong orders that customers frequently
encountered in other places.
3.Limited menu items offerings, which allowed for quality control, fast service and standardization.

• Key differentiator under the category “Customer Relationships”:

4.Give importance to customer experience by maintaining a clean restaurant with friendly staff and an atmosphere suitable for
families.

• Key differentiator under the category “HR Management and Culture”:

5.Employees’ training to ensure product quality and standardization: The McDonald brothers were on the ground controlling and
providing instructions to ensure that all employees are performing as per the set standards and are dealing with the customers in
a friendly manner.
STRATEGY ALIGNMENT FRAMEWORK
• 5. What are key differentiators (Zook/Allen article) of McDonald when it was established? What is the role of
kitchen layout in business strategy of McDonald, i.e., key differentiators?

The kitchen layout has a major role in McDonald’s business strategy and its alignment to operations as it
directly supports the speed of service, standardization and other key differentiators.
1.The kitchen design allows staff to maneuver easily to reach the needed ingredients and equipment which
reduced the time for preparing orders.
2.The unique innovative design triggers a flow of food preparation that results in consistent and standard
output since the same procedures are always applied when doing the job.
3.This also aids the limited menu offerings as it focuses on assembling the core items in a fast manner.
4.The kitchen design directly affects the speed of service which is directly and positively related to the
customer experience differentiator.
5.It also greatly affects the staff training differentiator as it enables the firm to create standard training
programs that prepares employees to work in the same exact workplace design, applying the same exact
procedures.
STRATEGY ALIGNMENT FRAMEWORK
6. What are the potential non-negotiables for McDonald? What is (are) the potential robust learning system?
Non-negotiable principles are the fundamental guiding values or core elements that a company defines as
essential to its strategic approach. These values are seen as crucial to achieving the organization's objectives
since they form the basis for the company's strategy and decision-making procedures.​
McDonald's non-negotiables include: ​

• Speed and efficiency in serving customers: McDonald’s brand is built around the core principles of speed and
efficiency. However, this goes in line with another one of their non-negotiables which is FOOD SAFETY​
• Food Safety: As stated in the corporate website of McDonald’s “The safety of our food and that of our
customers is non-negotiable and a top priority for McDonald’s.” McDonald's places a high priority on food
safety. This includes ensuring that the products used in their menu items are of the highest caliber, are kept in
the right storage conditions, and are prepared in a way that reduces the possibility of contamination.
Additionally, they work with other parties to ensure compliance with global standards for food safety.
(Corporate McDonalds, n.d.)
STRATEGY ALIGNMENT FRAMEWORK
6. Other non-negotiables of McDonalds
• Customer Trust: McDonalds’s was able to build over time a loyal customer base through gaining their trust. It
was able to do so by never challenging or doubting the customer. McDonald’s strategy emphasized on
empowering the customer by hearing their claims. This in turn increased the customer satisfaction and
retention rates and played a role in resolving issues fast due to honest feedbacks from loyal customers.
(Corporate McDonalds, n.d.)​
​
• Customer Experience: Providing a positive customer experience is non-negotiable for McDonald's.
This includes factors like cleanliness of the restaurants, friendly and efficient service through its , and
a comfortable dining environment. (Corporate McDonalds, n.d.)​
​
• Employee Experience: includes maintaining correct personnel data, using analytics to identify
each employee's particular requirements, and concentrating on the weekday activities that have the
most effect. (Pallanck, 2022)​
​
• Brand Consistency: McDonald's is a globally recognized brand, and maintaining consistency in the quality and
taste of their menu items across all locations is essential. Customers expect the same experience whether
they visit a McDonald's in New York or Tokyo. (Yazdanpanah, Javad. (2021). Strategic Communication &
Branding in McDonald's.)
ROBUST LEARNING SYSTEMS FOR MCDONALD'S​
Feedback and Review Systems: Customers can review and provide their feedback:​
• Through calling to McDonald’s customer care service center through filling an online form called McDonald’s
Customer Feedback (McDonald’s Customer Feedback (mcdcomment.com))​
• Onsite Feedback​
• Through social media platforms​
• Through the mobile application​
• Through sending an email to their customer service contact.(Foods Alternative, n.d.)​

Customer feedbacks can provide valuable insights for continuous improvement in service, food quality, and operations.​
• Customer Engagement and Personalization: Using data-driven insights, McDonald's can develop personalized marketing and
menu recommendations for customers, enhancing their overall experience and driving sales.​

• Mobile Ordering and Delivery: McDonald's can continue to invest in and improve its mobile ordering and
delivery systems McDelivery, making it easier for customers to access their food, learn about the different deals of the day,
and enhancing the convenience factor. ​

• Customizing menus for different countries, like introducing the Chicken McArabia Sandwich in Arab nations,
reflects McDonald's robust learning system, balancing global consistency while catering to the Arab customer. (Derhally,
2003) Other customized items include: Pizza McPuff – India, McLobster – selected Canadian Regions. (Maria, 2021)
STRATEGY ALIGNMENT FRAMEWORK
7. If you are advising McDonald in 2021, and want to help them improve their kitchen operations in line with
business strategy aligning it better (differentiators, non-negotiables and robust learning system) is there a
potential for business analytics here? What? Why? How?

What?
• Due to the global pandemic in 2021, firms in many different areas encountered unforeseen difficulties; the
fast-food sector was no exception. ​
• The operations and profitability of fast-food franchises were dramatically influenced by dietary restrictions and
shifting consumer behavior. It became important for companies like McDonald's to promptly and strategically
adjust as a result.
• It was more important than ever to advise McDonald's to use business analytics in 2021 in this situation. Fast-
food businesses had to use business analytics to overcome uncertainties, enhance their operations, and match
their strategies with changing customer wants and tastes as a result of disruptions brought on by the
epidemic. ​
• Therefore I would advise McDonalds to make use of business analytics which would enable it to predict
demand, optimize inventory, enhance efficiency, personalize menus, maintain quality, streamline the supply
chain, analyze feedback, and establish performance metrics.
 WHY?
For McDonald's, which operates on a global scale with numerous outlets, business analytics can offer several benefits, such
as:

• Optimized Efficiency: McDonald's can use data analytics to analyze kitchen operations, identify bottlenecks, and streamline
processes for faster service without compromising quality—a non-negotiable for the brand.
• Enhanced Customer Experience: McDonald's can improve customer sentiment rate by providing them with a diverse menu
offering various options including a healthy range!
• Supply Chain Optimization: Data analytics can help in understanding energy cost drivers at the restaurants, predicting
demand, managing inventory, and ensuring a steady supply of ingredients to maintain consistency and quality—a crucial non-
negotiable.
• Quality Control: Real-time data analysis can monitor food preparation processes, ensuring that food quality and safety
standards are met consistently across all locations.
 HOW?
• Demand Forecasting: Utilize historical sales data, weather patterns, and other variables to predict demand for specific menu items
at different times of the day and in various locations. This allows for better inventory management and production planning.

• Operational Efficiency: Analyze kitchen operations data to identify inefficiencies and areas for improvement, such as optimizing
staff schedules, equipment maintenance, and workflow.

• Menu Personalization: Use customer data and preferences collected from the mobile application to create personalized menu
suggestions, promotions, and recommendations. This aligns with the strategy of offering differentiation and enhances the
customer experience and thereby encourage repeat visits and an increase in sales.

• Digital Menus: Business Analytics could be used to create digital menus that adapt in real-time based on factors like weather, time
of day, and local events. For example, on a hot day, these menus can promote cold drinks, McFlurry, and salads to suit customer
preferences and weather conditions.

• Feedback Analysis: Analyze customer feedback data from various channels to identify trends and areas needing improvement in
kitchen operations. This supports the robust learning system by continuously adapting to customer preferences and addressing
concerns.

• Benchmarking and Performance Metrics: Establish key performance indicators (KPIs) and benchmarks to track kitchen
performance across different locations. Analytics can help identify top-performing outlets and share best practices.
 References

Corporate McDonalds. (n.d.). Retrieved from Corporate McDonalds website:

https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact/food-quality-and-sourcing/food-s
afety.html#:~:text=Customer%20Obsessed%3A%20The%20safety%20of,validated%20by%20external%2
0third%20parties
.

Derhally, M. (2003, 5 03). Arabian Business . Retrieved from Arabian Business Website:
https://www.arabianbusiness.com/abnews/mcdonald-s-rolls-out-mcarabia-138631

Foods Alternative. (n.d.). Retrieved from Foods Alternative Website:

https://foodsalternative.com/complain-give-feedback-mcdonalds/

Maria, R. C. (2021, April 10). Eat this. Retrieved from Eat this Website:
https://www.eatthis.com/mcdonalds-food-around-the-world/

Pallanck, K. (2022, April 21). Oracle Fusion Cloud Human Capital Management Blog. Retrieved from
Oracle Fusion Cloud Human Capital Management Blog Website:
https://blogs.oracle.com/oraclehcm/post/mcdonalds-satisfies-happy-customers-with-a-foundation-of-e