Consulting Assignment
Expanding businesses face an array of obstacles they must overcome to optimize their chance of success. Growth is one of many major barriers for fast-food restaurants, because with greater operational capacity comes greater expenses, upkeep, and uniformity. Restaurants strive to obtain operational efficiency to keep their doors open and remain in business. If restaurants cannot manage their cash flows and optimize operational efficiently then operations will be impeded because there is not enough money to support operational expansion. There are many issues to consider when expanding a fast-food restaurant. Continuous expansion can create an increase in both variable and fixed costs. Some of the variable costs include increased employee wages and emergency expenses. Fixed costs are also increased, because there are more restaurants. Instead of paying rent for one building there is now five restaurants that both have their own rent and insurance due at the end of every month regardless of sales made. With all these factors taken into consideration, even the smallest daily decisions can make a difference in the operational efficiency of the chain. McDonalds is one of the most successful chains in the world. With around fourteen-thousand stores, operational efficiency is of critical importance; therefore increased technological and labor efficient methods have dominated the workplace at their chains (Frequently Asked Questions, 2013). They have been very successful at luring customers by their low prices and delicious burgers which provides a value to the consumer or a reason to buy the product. Even with great products, the economy as a whole has taken a big effect on the chain. The dollar menu has been an integral part of operations given lingering somber conditions of the economy. Also, simplifying the menu back down has improved efficiency during operations and gotten rid of unnecessary costlier items. Implementation of standardized efficient
References: Choi, C. (2012). McDonald’s to beef up in India with meatless menu. Yahoo.com. Retrieved August 9, 2013, from http://finance.yahoo.com/news/mcdonalds-beef-india-meatless-menu-220612075--finance.html Frequently Asked Question. (2013). Aboutmcdonalds.com. Retrieved August 9, 2013, from http://www.aboutmcdonalds.com O’Shaughnessy, J. (2007). McDonald’s to Save Energy and Increase Operations Efficiency with Echelon’s Technology. Echelon.com. Retrieved August 9, 2013, from https://www.echelon.com/company/news-room/2007/mcdonalds.htm