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Logistic
For McDonalds Keystone distribution works as a 3PL. (Waters; 2003; p.90)
However, responsibilities of 3PL is discussed in Appendix B under Supply chain
frameworks.
All the different supplier deals with Keystone Distributor, who then sends material
directly to McDonalds to run the business smoothly by providing on affordable
prices, delivering products on time and helps in outward movement of orders and
receiving payments from customers. Overall, keystone is a important player in
structure of supply chain for making upward and downward activity successful. The
demerits of managing chain of supplier at McDonalds is to incur heavy investment of
time, money, and also it resources needed to implement and has to overlook the
supply chain as well and increase dependency.
Keystone uses the latest technology and software to work closely with McDonalds
marketing and business plan. Keystones ensures managing peak and troughs as
they come along for keeping smooth supply chain and ensures there are no out of
stocks. On an average Keystone carries five days inventory in their store and
delivers three to four times per week inventory in each restaurant. To meet that
delivery they have 300 vehicles, tractors and trailers which help them to run these
logistic operations within UK and including the Isle of Man and channels Island by
delivering around one million cases each week.
Their biggest challenge is ensure those vehicles arrive at the restaurants on time
and containing everything being ordered and meeting 100 percent quality of product
including frozen, chilled or dry. However running those vehicle cause heavy amount
of pollution and damage to environment the challenge here is to make sure eco-
friendly tool to be used.
Political
As the biggest fast food restaurant chain in the world, McDonalds must keep
adapting its strategies based on the conditions of its industry environment.
Low meal prices are less of a concern for some consumers as a slow economy begins to rebound.
IBISWorld predicts fast food restaurants need to expand their menus when price isnt a top concern
for consumers. QSR magazine reports 2011 sales for McDonalds outpaced the companys 2009
sales by $1.5 billion after the chain included fruit smoothies and other new items on its menu.
Consumer demand for healthy meals is causing McDonalds and other fast food restaurants to add
fruits and vegetables to their menus, according to "QSR."
Power of suppliers
Suppliers' power is another threat for business organisation. The company who is
going to produce the product, it needs some necessary raw materials. As raw
materials are normally delivered by suppliers, producing company depends on
suppliers in this case. So, the nature of the relationship between company and
suppliers affects the business. McDonald's realizes this truth and practices friendly
relationship with its suppliers.
Buyers' power
In restaurant business, customers are playing the role of buyers. In this case, buyers
are powerful because, they have thousands of ways to spend their money. They
choose the quality food with cheap price and standard service. McDonald's tries to
have the maximum numbers of customers from the same competitive market by
providing outstanding service.
Threats of substitutes
If the company's product is easy to substitute, it may affect the company. For
example- if other restaurant can produce the 'Big Mac' with same taste like
McDonald's, it will lose its customers. So, company needs to make something
effective and sustainable to ensure its speciality.
Threats of rivalries
The competitive position of a company is depends on its numbers of competitors
and the power of its competitors. It is needless to say that in present global market,
competitors are the main barrier of a company. McDonald's takes this challenge as
their mission to achieve its destination.