it mcdonald_s assignment complete

7/27/2019 IT McDonald_s Assignment COMPLETE

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UBAI2043 IT FOR MANAGEMENT (May 2013)

WRITTTEN REPORT MARKSHEET

UNIVERSITI TUNKU ABDUL RAHMAN

FACULTY OF BUSINESS AND FINANCE

UBAI2043 IT FOR MANAGEMENT (MAY 2013)

Bachelor of Commerce (Hons) Accounting

Topic: Tutorial Group: Name Student ID Programme

IT/IS’s impact on

‘ FOOD AND

BEVERAGES

INDUSTRY’ :

Implementations

of technologies for

‘MCDONALD’S’ .

T6 1. CHAN KAH HUI 09ABB02548 AC2. LEE KAH YEE 12ABB07274 AC

Date of Submission: 3. MALVEENN PREET KAUR

GILL11ABB05909 AC

22/7/2013

4. MOO CHOI NYUK 10ABB00515 AC

5. SIM HWA KENG 10ABB00996 AC

6. YEE MIN NIE 12ABB07273 AC

No Items Poor Satisfactory Excellent Marks

1 Executive Summary (5%) 0 1

(Improper or None)

2 3

(Reasonably written)

4 5

(Exactly written)

2 Discuss the impact of IT/IS on‘your selected industry’ (5%)

0 1

(Improper or None)

2 3


4 5

(Exactly written)

3 Introduction : (10%)

Name of the company of your selected industry and its brief history

The company’s main activities

0 1 2

(Improper or None)

3 4 5 6 7

(Reasonably written withoverview included)

8 9 10

(Exactly written withconcise overview)

4 Lengthy discussion on how thethree (3) IT/IS identified are usedby the company of your choice inthe daily business processes

(30%)

0 1 2 3 45 6

(Improper or None)

7 8 9 10 11 12 13 1415 16 17 18 19 20 21


22 23 24 25 26 2728 29 30

(Exactly written withrelevant examples

and relation to

business process)

5 The impact of Porter’s FiveCompetitive Forces model on thecompany (20%)

0 1 2 3 4

(Improper or None)

5 6 7 8 9 10 11 1213 14


15 16 17 18 19 20

(Exactly written withconcise analysis

done)

6 Strategic use of IT/IS for competitive advantage (15%)

0 1 2 3

(Improper or None)

4 5 6 7 8 9 10


11 12 13 14 15

(Exactly written withconcise analysis

done)

7 Conclusion (5%) 0 1

(Improper or None)

2 3

(Reasonably written withproper summary included)

4 5

(Exactly written withconcise summary)

8 APA referencing (5%) 0 1

(Improper or None)

2 3

(Reasonably formattedand reasonable standard

compliance)

4 5

(Properly formattedand perfectstandard

compliance)

9 Formatting for the report (5%) 0 1

(Improper or None)

2 3

(Reasonably formattedand reasonable standard

compliance)

4 5

(Properly formattedand perfectstandard

compliance)

Comments :Total Report Marks (100%)

Lecturer / Tutor Acknowledgement: Name Signature



NO. CONTENTS PAGE

1. EXECUTIVE SUMMARY 1

2.DISCUSS THE IMPACT OF IT/IS ON „YOUR SELECTED

INDUSTRY‟

2-3

3. INTRODUCTION 4

4. EFFECTIVE IMPLEMENTATION OF IT/IS IN MCDONALD‟S 5-7

5. THE IMPACT OF PORTER‟S FIVE COMPETITIVE FORCES

MODEL ON THE COMPANY

8-9

6. STRATEGIC USE OF IT/IS FOR COMPETITIVE ADVANTAGE 10-11

7. CONCLUSION 12-13

8. APA REFERENCING 14



1

EXECUTIVE SUMMARY

McDonald‟s is a fast food restaurant that offers delivery services and drive-thru

services for customers‟ convenience. Today McDonalds operating more than 30,000

restaurants worldwide which consist of 80% owned by franchise and 20% are owned bycompany itself. Around 1.7 million workers are employed by McDonald‟s worldwide.

McDonald‟s used Information System to identify their own strength and

weaknesses by using the revenue reports, employee performance record and many more. By

doing so McDonald‟s will be able to improved their business process and operations.

The best system in McDonald‟s is the POS system “Scale of Point System”. By

using this system, McDonald‟s will be able to save time, error control point of sales syste ms

in restaurants also eliminate or reduce human error.

POS also reduce paperwork. Using this system McDonald‟s able to attract more

customers and keep customers and get what they need in the easiest way.

The other system that McDonald‟s used is Transaction Processing System (TPS).

TPS is a system that helps to serve customers better. Transaction Processing System used to

record McDonald daily transaction. This may help them to keep the useful information in

order to make a better decision in the future.

Besides, McDonald‟s also uses Made-For-You System. It can consider as a

backend system in McDonald. (McDonald, 2011) Made-For-You System can help McDonald

to raise their productivity and customer‟s satisfaction. (McDonald, 2011) It has been

implementing in order to create smoother, faster and more flexible kitchen system.

HBS- Hyperactive Bob System. This system uses cameras on the roof of the

building and also gathers point of sale information in real time to monitor the entrance and

parking lots of the McDonalds.

McDonald also uses Management Information System (MIS) to maintain and

improve the internal control in the company.

McDonald have strong decision making plan. The new entrants are not easy to

enter the fast food market. Decision Support System (DDS) is used to model data and make

quality decision base on data.



2

IMPACT OF IT/IS ON MCDONALD’S

Information Technology is basically a broad and diverse field. Actually, it‟s not

farfetched to say that Information Technology is practically involved in every aspect of one‟s

life. Thus it‟s only natural that something as everywhere as I.T. plays a major part in business. Information System is a set of interrelated process that collects, process, store, and

distribute information to support decision making and control in an organization. But what

exactly is the impact of Information Technology and Information System on McDonald‟s?

Technology is playing an important part in McDonald's plans to attract more

consumers into its fast food restaurants plus savings on expenditure, operational efficiency

and large amount of advertisement. Technology raises a company's capability to predict sales

and decide which commodities have high consumer demand. Personal computers, wireless

devices and the internet have McDonald‟s plugged into mainstream technology. McDonald‟s

inventive planning introduced Wi-Fi hotspots, internet terminals, and web-based games for

children into its stores. With Wi-Fi hotspots in McDonald‟s customers can check email,

access the internet and download presentations while having their food.

Information systems in the McDonald‟s are reducing the time that customers used

to waiting in line. So if they decrease period of waiting, they will boost amount of consumers

and decrease time charge. In addition they will also increase the excellence of management

and decrease human mistakes or errors. MacDonald‟s forward to control value of

management by decreasing the time of each method that they are made. This method led him

to be more successful and capable in process. Besides, MacDonald‟s also used advanced IT

in processing it systems. For example building a database and calculating time of process to

build up his work incessantly.

McDonald does also have a system where it allows customers to order online andaccept his home order from nearest brunch. This occur through a screen that shows the

customer place when he/she order in the McDonalds restaurant. Then they deliver the order

in less time.

Cost effectiveness. By using Information systems technology in McDonald's has

provide a hand to computerize the business method and make them uncomplicated.

Consequently, business become really cost effective money which made by machines. This



3

gives opportunity to increase efficiency and profits, which means better pay to workers and

excellent working environment.

Besides, internet and intranet is also being used in McDonald‟s in order to get

connected with the stakeholders. For example, internet is being used in charge to start on

their diverse marketing strategy as well as to get connected to their potential and faithful

buyers. In contrast, intranet serves as a confidential communication means for the inside

stakeholder of the company such as suppliers, shareholder and workers.

Effective planning from information technology can create an advantage over

competing organizations in this global market and offer the information needed to maintain

its leadership in the fast food industry McDonald‟s has taken full advantage of what

technology has to offer and effective planning is its best customer.



4

INTRODUCTION

„I‟m Lovin‟ It‟ is a tagline known by everyone including kids, teenagers, and elderly

people. McDonald‟s is the world‟s number 1 fast food corporation found by Richard and

Maurice McDonald in San Bernardino California in 1940. McDonald‟s started to growrapidly in 1960‟s. Due to high demand of cheap takeaway food, McDonald‟s has continued

to expand its business to 117 countries since the first restaurant opening in Australia during

1971. The company focuses on providing high quality of food and customer service through

its product line. McDonald‟s also offers delivery services and drive-thru services for

customers‟ convenience. Today McDonalds operating more than 30,000 restaurants

worldwide which consist of 80% owned by franchise and 20% are owned by company itself.

Around 1.7 million workers are employed by McDonald‟s worldwide.

Their main selling products are hamburgers, double cheeseburgers, big Mac burgers,

fillet-o-fish burgers, nuggets, french fries, pie, breakfast items, chicken porridge, soft drinks,

milkshake, and desserts.

McDonald‟s vision is “To be the world‟s best quick service restaurant and to take

over the global food-service industry” whereas their mission is “To provide excellent quality,

service, cleanliness, and value, so that we make every customer feel satisfied.”

McDonald‟s uses various types of information systems in daily operation such as,

Transaction Processing System(TPS), Decision Support System (DSS), Management

Information System (MIS), “Made For You” system, Point of Sale System(POS system),

Hyperactive Bob System. TPS is used to record suppliers‟ information when transactions

occurred. DSS‟s function is to analyze data when they wanted to come out with a decision,

for example, providing wireless service in their restaurant. Besides, MIS is used to provide

periodic report to help managers monitor the business performance and its future plan. On the

other hand, “Made For You” system is specifically designed to place customers‟ order in

which the order will automatically appear in the computer in the kitchen to increase

efficiency. POS system is used to track large amounts of data and transmit the data to several

workstations to speed up the business process. Last but not least, Hyperactive Bob System

uses camera to monitor incoming traffic within the restaurant area so that their staffs will

always be alert.



5

IDENTIFY THREE (3) IT/IS AND DISCUSS HOW EACH IT/IS IS USED BY THE

COMPANY OF YOUR CHOICE IN THE DAILY BUSINESS PROCESSES.

The first IT we want to discuss about McDonald is Transaction Processing System

(TPS).

TPS is a system that helps to serve customers better. Transaction Processing System

used to record McDonald daily transaction. This may help them to keep the useful

information in order to make a better decision in the future.

TPS also used to collect, stored, modify, and retrieved the transactions of their

organization. . Above function can helps McDonald to answer some general question in

conducting their business transaction. For examples, payroll, employee record keeping or

paying an employee.

Transaction Processing System also helps McDonald to reduce the possibility of

committing fraud or difficulties in physically keeping supplier contact and their information,

such as address, name, product‟s name, and quantity of the product that they order. In

addition, TPS also will ease the ordering process.

Every day, McDonald has to deal with many supplier and customer. They have to use

Transaction Processing System to help them to record customer‟s transaction and

information. Such as the total quantity of hamburger had been sale, type of hamburger. They

also need to record the information of purchasing their raw material, and the supplier

information in order to keep track the reorder level and which supplier that they need to

communicate and cooperate with them when they reach their reorder level.

The second Information system our group wants to highlight is Made-For-You

System that implemented by McDonald. It can consider as a backend system in McDonald.

(McDonald, 2011) Made-For-You System can help McDonald to raise their productivity and

customer satisfaction. (McDonald, 2011) It has been implementing in order to create

smoother, faster and more flexible kitchen system.

Since McDonald consider as a fast food and beverage company, they have to provide

fresher ingredient to their customer in order to be more famous and attract more fast food‟s

supporter. So they have to change all their cooking equipment and communication

technologies that may allows McDonald to launched this new concept.



6

By using this system, the customers can ensure that they can get the meal prepared

after they made orders but not the meal made before their orders. This means that after the

customers had make the order, the worker will just click on the screen for what you had order

and the order immediately sent to the kitchen and at that time, the chef will only start to made

the meal. Made-For-You System help to ensure that the customer get their meal tastier and

fresher. This system helps to maintain and control the quality of the McDonald‟s meal.

The third information system we discuss here is HBS- Hyperactive Bob System.

Hyperactive Bob System uses robots to control the computer vision and artificial intelligence

systems to manage the kitchens at-so called quick-service restaurants. This system is not only

a mechanical humanoid bring together chicken burgers behind the counter but merges

machine intelligence with human activity. Hyperactive Bob System scans the parking lot for

the cars coming and cross-references traffic patterns for the preparation to the restaurant

services as the bell curve of orders, the time of day, cooking times, the current amount of

food in the restaurant's warming bins and issues cooking orders to the employees manning

the jobs.

This system keeps an eye on the entrance and parking lots of the McDonalds with the

cameras on the roof of the building to gather the points of sale information in real time. Bob‟s

spots vehicles entering the McDonalds‟s parking slots and reminds the workers to know how

fast should they work to serve a meal at what amount of chickens, meat, fish, fries and so on.

If there is lots of people to have their satisfaction in a rush hour, this help the workers able to

make an expectation for the meals that they need to be ready in that period of. Hyperactive

Bob System is a technology that helps McDonalds to step forward by ensuring their staff is

always be prepared. Hyperactive Bob System instructs employees for the food to prepare



7

based on past data by using touch screen with Artificial Intelligence. This system has

giving McDonalds the ability to always be one step ahead.



8

DISCUSS THE IMPACT OF PORTER’S FIVE COMPETITIVE FORCES MODEL

ON THE COMPANY OF YOUR CHOICE.

The Five Forces Model formed by Michael E.Porter helps McDonald‟s to stay in this

highly competitive food and beverages industry. The Five Forces Model consists of bargaining power of buyers, bargaining power of suppliers, threat of substitute products or

services, threat of new entrants, and rivalry among existing competitors.

Firstly, the bargaining power of McDonald‟s customers is low. This is because in this

hustle and bustle of the big city where everyone is living in such a fast paced lives,

McDonald‟s becomes their main choice to satisfy hunger as it is well known for its fast and

convenient services. Customers have not much choice to make as McDonald‟s is one of the

fast food chains which offers low cost and differentiated products and services. Thus,

McDonald‟s does not worry about customers‟ loyalty. To be able to gain advantage in

competitive edge, McDonald‟s uses IT such as “Made For You” system to send customers‟

order directly to kitchen crew. This system can increase efficiency and the customers can get

their orders in short time.

Secondly, the bargaining power of McDonald‟s suppliers is high. McDonald‟s does

not have its own factory to manufacture food. Since McDonald‟s attempts to provide

consistency in their food serving sizes, McDonald‟s relies on single supplier on each product.

For example, the main supplier is MacFood Services (M) Sdn Bhd while the bun supplier is

HaviFoods Sdn Bhd. Not only these, McDonald‟s depends on beverages industry like Coca

Cola and Minute Maid. McDonald‟s uses Transaction Processing System (TPS) to deal with

these suppliers by recording the important information related to suppliers such as name,

address, contact number and invoice amount.

On the other hand, the threat of substitute products or services is high. McDonald‟scan be easily substituted by other fast food chains such as Burger King, KFC, Wendy‟s,

Subway and Carl‟s Jr as the customers can easily switch to other products. Since the

customers‟ switching cost is low, there is nothing to stop them from purchasing substitute

products. Nowadays, people are more concern about their health. As a result, they tend to

look for healthier food as alternatives. The threat of substitute services is high because most

of the competitors also use Point of Sale system (POS), drive-thru, delivery service same like

McDonald‟s in running their business.



9

Furthermore, the threat of new entrants is relatively low. New fast food chain is hard

to enter into the market as there are many well-established companies. One of the good

examples of well-established companies is McDonald‟s. McDonald‟s, a low cost fast food

restaurant with strong brand identity makes the new entrants even more difficult to enter as

they have to face with fierce price competition. To start a new business, a firm has to spend a

big amount of capital in order to survive in this competitive fast food market. Since

McDonald‟s is using IT to support its operation such as Hyperactive Bob system, Point of

Sale system (POS), “Made For You” system , Management Information System (MIS),

Decision Support system (DSS) and Transaction Processing system (TPS), new entrants are

unlikely to provide those high cost IT systems. Therefore, McDonald‟s does not have to fear

of the threat of new entrants as there is a high barrier to entry.

Last but not least, the rivalry among existing competitors is relatively high.

Competitors like KFC, Pizza Hut, Wendy‟s and Burger King often compete with each other

in terms of price, customer services, efficiency of the staffs and quality of products to

maximize their profits. Most of the fast food outlets are well equipped with advanced

technology to increase the efficiency; McDonald‟s is not an exception to this. In order to

survive in this competitive market, McDonald‟s equipped with Hyperactive Bob system in

which other fast food outlets don‟t. Hyperactive Bob system assists McDonald‟s in

monitoring the entry of customers within the restaurant area.



10

STRATEGIC USE OF IT/IS FOR COMPETITIVE ADVANTAGE. (USE THE

PORTER’S 5 FORCES AND COMPETITIVE STRATEGIES TO CARRY OUT THIS

ANALYSIS.)

DISCUSS HOW INFORMATION TECHNOLOGY CAN BE USED BY THAT

COMPANY TO SURVIVE THE IMPACT AND SUSTAIN THE COMPETITIVE

ADVANTAGE.

Bargaining power of McDonald‟s customers is related customers‟ loyalty.

Relationship between McDonald and customer is good. McDonald provides good service and

delicious food to their customer. McDonald also maintains the quality and taste of food in

every country. The quality of food do not has big different in every country. As a result, the

customers of McDonald are more loyalty because they know the McDonald has a standard

level of quality. McDonald uses “Made For Me” system when a customer places an order, the

food item will immediately appears in computer monitor in the kitchen and a tone sound to

alert the kitchen staff. The quality of hamburger will be not affect by time. McDonald uses

this system to maintain their sales and customers. Therefore the customer will not easily

switch to other fast food restaurant.

McDonald does not have their factory to manufacture food, so the price of material

will be higher. However, McDonald has many suppliers, thus it has the power controlling the

cost of material. McDonald wants to maintain their material in top quality, therefore their

purchase the material direct from the local place. So the McDonald‟s customers can enjoy the

fresh and delicious food in McDonald. McDonald use Transaction Processing System (TPS)

to collection, modification and retrieval of all transaction data. McDonald can be manage

quantity of material. McDonald will not be over or under order. McDonald uses Transaction

Processing System to handle errors in a safe and consistent manner. Transaction data can be

process in faster and safely way.

Point of Sale System (POS) is critical to gathering and applying information

effectively in today's ultra competitive markets. Point of Sale System is the system to place

where a retail transaction is completed. (Wuorio) McDonald uses Point of Sale System to

calculate the amount owed by the customer and provide options for the customer to make

payment. So the customer payment can faster process and not need to waiting long time.

Point of Sale systems also offer a wide selection of features to improve control of McDonald

and save time spent on inventory, purchasing and accounting.



11

McDonald have strong decision making plan. The new entrants are not easy to enter

the fast food market. Decision Support System (DDS) is used to model data and make quality

decision base on data. Decision support system is usually computer application with a human

component. (Targit Business Company) McDonald makes correct decision planning when

used decision support system. Example like McDonald thought of providing wire service to

customers use. The customer can be internet when they enjoy their beverage. McDonald can

be analyzing the market well as other competitors when the opportunity is coming. Therefore

the new entrants are not easy to survive in the market.

Internal control is more important that external control. McDonald‟ rivalry of

competitor is relatively high. Therefore McDonald uses Management Information System

(MIS) to maintain and improve the internal control in the company. Management Information

System is a system that provides information needed to manage organization effectively. It

involve three resource are technology, information, and people. McDonald use Management

Information System to produce periodic report such as a daily list of employees and the hours

they work or a monthly report of expenses as compared to a budget. McDonald uses

Management Information System to improve the profitability and information to help the

management and employees understand the business performance and plan its future

direction. (May Business School) When the employees understand their responsibility, they

will perform good job and loyalty to McDonald. Therefore the McDonald can be managing

the competitors.



12

CONCLUSION

In conclusion, the success factor of McDonald‟s can be divided into four categorise .

The first is consistency, second innovation and third global, but local and availability. First factor is consistency. No matter where you are and which brunch of

McDonald‟s you‟re visiting, you‟re going to experience the similar experience wherever you

are. Consistency, of course is the main factor of success to any franchise system and this is

why McDonald‟s is very success in their business. Customers know what to expect and can

take console in that information when making a choice on where to eat. These attempts

towards process replication and effectiveness not only set the basis for McDonald's

achievement from the viewpoint of customers' expectations, but also help McDonald's stay on

top in a traditions where generating at a fast speed is universally accepted.

The second factor is innovation. In the beginning, the concept of consistency and

innovation tend to disagree with one another. But in surprise, this two characteristic tend to

work together to allow McDonald‟s growth. Being consistent on the centre workings of your

business doesn't mean the items or product you sell, or even the way you deliver them, have

to be consistent. There should be a fine line between consistency and innovation. However, if

you take the required moves, and put the work in to the lead of time, you can tweak your

product without causing disturbances, and possible better serve your customers. Innovation

caused from alertness to customers and franchisees has played a big role in McDonald's

fending off stagnation over the years. Additionally, McDonald's creation contributions have

developed over the years next to the savours of their customers thanks in part to some alert

and inventive franchisees. A few examples of products that were introduced after being

developed by McDonald's franchisees Filet-O-Fish, Big Mac, Hot Apple Pie, Egg McMuffin,

McFlurry. These menu innovations have allowed for McDonald's to embrace creationcontributions for all meal times, and the snack times that fall in between, allowing for better

profitability. But McDonald's takes huge concern not to cause the customer experience when

a fresh piece is launch.

The third success factor of McDonald‟s is global, but local. Although McDonald‟s is

a multi-national gigantic, it adjusts its business and menu to go well with home markets. This

„global, but local‟ approach allows it to adapt its offers to suit the local appetite. For example,



13

in some countries, McDonald‟s sells beer and, in India, where Hindus don‟t eat beef,

McDonald‟s menus have vegetarian and non-beef options.

The fourth factor success factor is availability. Convenience is the main key factor of

McDonald‟s success. We can find McDonald‟s Restaurants in anywhere either it is in

suburban town or in cities. Besides, shopping centers and strip malls normally have a

McDonald‟s built in or within walking distance. Some stores have places McDonald‟s

restaurants within for consumer availability.



14

REFERENCES

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http://www.ehow.com/list_7427367_key-success-factors-mcdonald_s.html

Franklin County Times.(2004). HyperActive Bob spies on hungry food customers.Retrieved

1, July, 2013, from http://www.franklincountytimes.com/2004/09/18/hyperactive-bob-spies-

on-hungry-food-customers/

Kristiellis (n.d) (2003). McDonald‟s controls inventory worldwide with system. Retrieved

July 13, 2013, from http://supermarketnews.com/archive/mcdonalds-controls-inventory-

worldwide-system

Martin Boersema (2012). McDonald's Lean Food Preparation System - Made for You.

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preparation-system.html

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is-mis/

McDonald’s.(n.d.). Retrieved 1, July, 2013, from https://en.wikipedia.org/wiki/McDonald's

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http://www.mcdonalds.com.my/abtus/corpinfo/history.asp

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Squall (2011). McD Information system. Retrieved July 13, 2013, from


Targit Business Company. (n.d.). Improve decision makingwith DSS- Decision Support

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http://www.targit.com/en/landingpages/decisionsupportsystem/dss

Wuorio, J. (n.d.). Retrieved 2011, from Microsoft Business:http://www.microsoft.com/business/en-us/resources/technology/business-software/7-reasons-

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http://supermarketnews.com/archive/mcdonalds-controls-inventory-worldwide-system



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