CASE STUDY
The fastfood industry in the United States has typically used drive-through windows to increasae profitability. With 65% of fastfood revenue derived from drive-through windows. These windows have become the focal point for market share competition among fastfood outlets such as Wendy's, McDonald's, Burger King, Arby's and Taco Bell. Even chains that did not use drive-through windows in the past, such as Starbucks and Dunkin' Donuts have added them to their stores.
Production technology changes have included the use of separate kitchens for the drive-through window, timers to monitor the seconds it takes a customer to move from the menu board to the pick-up window, kitchen redesign to minimize unnecessary movement, and scnaners that send customers a monthly bill rather than having pay at each visit.
Now, in an attempt to cut costs and increase speed even further, McDonald franchises have tested remote order taking. It takes an average of 10 seconds for a new car to pull up to a drive-through menu after one car has moved forward. With a remote call center, an order-taker can answer a call from a different McDonald's where another customer has already pulled up. Thus, a call center worker in California may take up orders from Honolulu, Gulfport, Mississipi and Wyoming. This means that during peak periods, a worker can take up to 95 orders per hour. The trade-offs with this increased speed at the drive-through window are employee dissatisfaction with constant monitoring and the stress of the process, decreases in accuracy in filling orders, and possible breakdowns in communication over long distances.
In Asia and other parts of the world where crowded cities and high estate costs limit the construction of drive-throughs, McDonald's have added motorbike delivery as part of their own strategy. Most McDonald's delivery are phoned in but the company has started offering internet-based ordering in Singapore and Turkey. McDonald's does not plan to use this in the United States since two-thirds of its sales comes from drive-through customers.
Required:
- What type of market structure does Mc Donald’s belong?Give proof of your answer.
- What strategies can Mc Donald use to increase its sales?
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