Case study on Operations Management



Case study on Operations Management

Introduction

The topic under study is based on providing consulting services to XYZ venture capital group to help it make a significant investment. For this purpose, the topic includes selecting two companies within one industry, providing an introduction about the industry, brief history of each firm including the firms market share, sales level and profits for last five years. The second part of the paper includes discussing operational objective by researching each firm's mission statement and narrowing it down to an operational objective. The third part of the paper includes addressing the specific operational challenges of the selected industry, listing and discussing three challenges. The fourth part of the paper includes discussing five metrics of the industry. The fifth part includes addressing the identified challenges in detail and exploring how each firm addresses these industry challenges. The sixth part of the report includes providing conclusive evidence about which of the two firms of the industry is performing better. This conclusion discusses the operational perspective, specifics regarding the lead time, percentage of customer complaints, reduction in waste and comparison of inventory turnover.

For this paper, the United States fast food industry has been chosen and within this industry, two famous fast food chains; McDonald's and KFC have been selected.

Industry Background

In the United States, fast food industry is one of the largest industries. There are over 200,000 fast food restaurants which accounts to approximately $120billion of the total revenue. The concept behind fast food is the short preparation time of food due to which it is also known as quick service restaurant. Although, there are around 200,000 restaurants, but, there are some real big names such as McDonalds, KFC, Wendy's, Burger King and a lot of others.

Soaring food and energy prices, the growth of fast food industry has been slowed down a bit still it is one of the most profitable industries in the United States as compare to other industries in the country. Big giants in the industry have experienced immense growth in the business with high profitability. The United States still accounts for the highest share in the fast food industry on a global level.

The popularity of the fast food industry can be analyzed by the fact that in the United States, consumers alone spent around $110 billion in 2000. This was the figure of one year. The trend increased with the passage of time, reaching to US $142 billion in sales in 2006 and the national restaurant association has forecasted even further growth in the industry.

Background of the Chosen Firms

McDonalds

McDonald's is the world leader in food service restaurants with more than 30,000 fast local serving nearly 50 million people in 119 countries each day. Globally, McDonald's posses 10.4% of the market share which is the highest as no other food chain posses more than 3.3% market share. With an experience of more than 50 years, operating in this industry with a global presence and maintaining its leadership among competitors, it is one ...