Question

I will show relevant parts of the movie “The Founder” (2017) in class. The first part of the movie describes McDonald’s generic strategy, value chain, etc. I will try to describe them here. We have already gone over this ground in Ch.5 and I’m not asking you to do further work in it. Rather, we’ll be analyzing the strategic alliance in this movie that grows out of these innovations. You should, however, recognize the focus strategy here and how the value chain customization supports the focus strategy. McDonald’s Focus. After brief attempts at other businesses (most notably a drive-in), the McDonalds decides to focus their efforts on three products (hamburgers, fries, and soft drinks) which constitute 87% of their revenues. They also focus on providing a new service, fast food (service within 30 seconds, not 30 minutes), which further differentiates them from drive-ins. Finally, they focus on a market segment as well, families, which means they intend to eliminate the hot rodders, juvenile delinquents, and riff raff which continue to populate drive-ins. McDonald’s Value Chain customization. To cater to families, they (1) remove vending machines and juke boxes, and (2) car hops (girls who can get grabbed). To provide fast food, they serve their food on paper instead of dishes. They also redesign the work flow in their operation, specializing some jobs, standardizing the way some activities are done, streamlining the workflow, and adding specialized, customized equipment. Now to the strategic alliance. One reason for engaging in a strategic alliance is to capture economies of scope – synergies that result from combining unlike but complementary resources in this case. (1 + 1 = 3). Therefore

, Q1: What INTANGIBLE resources (both strengths and weaknesses) do you think the McDonalds and Ray Kroc possess initially (before their strategic alliance)?

Answer 1

Answer 1:

INTANGIBLE resources (both strengths and weaknesses) we do think the McDonalds and Ray Kroc possess initially (before their strategic alliance) are as below

• Generic strategy – they have the generic strategy and this strategy was driving their efforts and approaches in the market before the strategic alliances.
• Value Chain – the value chain process of the McDonald was not appropriate and they do have adequate focus on this value chain process and it is not resulting good level of benefits for the organization.
• Strategic alliance - strategic alliance was not explored for the McDonald business and this was causing them lack of innovations required for the organization. Thus the business was lacking and not able to manage the growth as expected. But will the strategic alliances, the company result in appropriate innovations for the company and the company started capturing the appropriate market shares.
• Focus strategy – before the strategic alliances, the products range was larger and McDonald was not able to focus the key products that are resulting benefits for the company. But after the strategic alliances the comply explored the focus strategy and they focus to have value based products i.e. they focus for limited products only to remain competitive in the market, they explored new service for customer satisfaction and they find out new market segments where they can target their consumers for better business benefits.
• The McDonald Company was lacking in operational standardization, streamlining, and appropriate specialized equipments for their operations. But after the strategic alliances, they have improve do these factors and achieved adequate growth and success.