Strategic Initiatives, Case Study Example

The definition that best describes the course content concerning strategic initiatives is a strategic vision that materializes and brought to life through the eyes of the senior leadership. The senior leadership establishes goalsthat  put into action in the day-to-day operations of a company. The senior leaders have the same habits that build good leaders. These habits of successful senior leaders’ exhibit: finding a vision, being consistent with directions, very intelligent, personal commitment, empowers, and guides others. (Hill & Jones, pg.19).

The best example of the course concept of strategic initiative is McDonalds first CEO Ray Kroc. The CEO has a vision that the staff needs the best training, uniformity, company standards and quality controls. These type of methods were closely related to the sales or production industry methodologies. Ray Kroc’s sales background established a new type of restaurant that concentration on internal and external processes.

The McDonald’s brothers created the foundation of burgers, fries, cheeseburgers, apple pies, and milkshakes. There were the first to change from the 1950 carhop service that brought the food to the car. The real innovators were the McDonald brothers, named Maurice and Richard, who originally opened the carhop style of food delivery in California since 1930’s. (Hill & Jones, C54). At this point, Ray Kroc studies the brothers while they made hamburgers and their operations. Ray purchased the rights to open McDonald’s franchises including the first one in Des Plaines, Illinois.

Ray Kroc’s background comes from the milkshake sales industry, thus setting up strategic initiatives was inevitable. The primary strategic envision by Ray Cross was the McDonalds famous yellow arches which is recognized worldwide. The strategic initiative was to create a logo that became the staple in fast food restaurant. “A strategy is a set of actions that managers take to increase their company’s performance relative to rivals. If a company’s strategy does result in superior performance, it is said to have a competitive advantage” (Hill & Jones, 2012)

The exposure of the bright yellow “M” allowed customers to recognize McDonalds’s restaurant from all other competitors. This was an example of a strategic initiative of branding that was successful. This was a bold strategic initiative by Ray Kroc because all the restaurants in the 1950s and 1960s were most bland with black and white looking colors. Ray Kroc hired an architect to develop unique yellow arches to strategically introduce the new look and feel of the fast-food restaurant. Many in the historians do not give credit to Ray Kroc but he ushered in the concept of sitting or driving to receive your fast food order. The strategic change is the style that has been copied by every fast food restaurant in American. However, Ray’s strategic vision remains in place far above any other franchise. The McDonalds arches are the most recognized brands on the entire planet. The strategic plan of choosing yellow by Ray Kroc is a signature that can be seen from many blocks away. The children can see the yellow arches so they can encourage the parents to stop at McDonald’s. The marketing concept of yellow arches attracted customers that did not know where the McDonald’s was located but were convince to stop because the shiny bright neon yellow signs.

A CEO who wants to successful should follow his strategic methods of Ray Kroc, whobecame the master of examining the internal and external environments while selecting the best know strategy to implement. The CEO has responsibility many responsibilities to the community and the organization. In addition, that have a responsibility to the shareholders to ensure they receive excellent returns. However, the CEO tenor will depend ultimately on his/her ability to maximize growth and profitability (Hill & Jones, 2012, pg.6).

The internal environment for the fast food restaurant was prime for a change. The CEO created a family friendly atmosphere that allowed the entire family unit to dine comfortably in McDonalds. The external environment was making McDonald’s standout with the new age look and yellow arches. Success will follow when the senior leader takes the time to learn the external and internal factors that will improve the company’s visibility and bottom line. (Hill & Jones, pg.5).

Ray Kroc utilized the strategic management methodologies that allowed McDonalds has to reach effectiveness at every level of management. The CEO made it mandatory to train all the managers from the functional, business level and at the corporate level. The general managers who are accountable for the overall performance of the units and divisions. The functional managers are supervising the individual daily task including accounting, research, logistics, and technology. The corporate leaders accountable for delivering the uniformity strategic initiatives that were envisioned by Ray Kroc. The genius of Ray Kroc’s delivery is in line with the strategy making process discussed in Chapter 1. The managers are the cornerstone of the organization that must be held responsibility for delivering, managing, and teaching the strategic initiatives that are apparent in McDonald’s today.

The primary reason the strategic Ray Kroc’s initiative is still successful because of McDonald’s has reach a level of uniformity that is apparent in every store regardless of location. The success of a strategic initiatives depends on the how the organization utilizes objective resources from outside the company. These resources are adapt at identifying, measuring, and paralleling previous initiatives. The consultants can report the success or failure of those ventures as it pertains to the current initiatives. (Hill & Jones, pg.19). Once gain Ray Kroc’s success was tied to his sales background that understood training was the key.

Ray was innovative and had a good eye for talent. Kroc hired a 23 year named Fred Turner to revamp all standard operating procedures. The phenomena about the young man was Fred Turner did not graduate from Harvard. He was a high-school dropout that was a quick study. Fred Turner turned the McDonald’s operations into the Just in Time model used by the manufacturing industry. Fred followed the lead of his mentor Ray Kroc by making all the internal processes from how long to fix French fries to how long to discard products. In truth, Fred’s training operational manual is the staple of how McDonald’s operates currently.

There are several reasons that the Ray Kroc strategic initiatives were successful because he concentrated on uniformity across the entire organization, operational excellence, first-class training, and supervising franchise manual. This was a critical point in growth of McDonald’s because Fred Turner wrote and developed the “Supervising Franchise Manual. These standards are the signature to McDonald’s operations today. He developed detailed reports that evaluated the franchises performance in the areas of quality of restaurant, how clean was the entire store, customer service, and overall performance. It is very clear that McDonald’s has a competitive and sustained advantage over every rival in the fast food restaurant. According to Hill and Jones (2012), the indicators that mean a company has dominated the industry can be called competitive and sustained advantage.

The competitive advantage McDonald’s has over many franchises the notoriety and years of experience learning what the consumers likes and dislikes. One the most important changes that Ray Kroc made in the 1950s were learning that families do not like to wait in line for long periods. McDonald’s has developed a streamline process that cuts down on the number of minutes the customers has to wait for McDonald’s food. Another competitive advantage is the philosophy of keeping the art of making burgers and fries simple. This allow McDonald’s to work on other competitive advantages because the processes have been so simplified most internal operational changes will adapt to the culture.

According to the text, McDonalds has successfully applied several different strategies. The first strategy is the cost. McDonald’s has added the value menu, which is available everyday that allows customers to pay $1.00 for a hamburger. The loyal and new customers can pay $1.00 for breakfast or lunch.

The competitors may have the same dollar menu but the delivery by McDonald’s is a competitive advantage over competitors.McDonalds marketing department has flooded the market making the point that McDonald’s food is different from the other competitors.The buns are special the French fries are considered the best in the industry. Lastly, the focus on quality delivery and customer service sets McDonald’s apart from the competitors. The McDonald’s stores are focused on the customer with plush bathrooms, big screen TV’s, well light environment, self-serve area just for customers and the internal areas in McDonald’s are one the cleanest in the industry. The rest rooms facilities in McDonald’s reflect how much they care about their customers. Many families believe that if the restrooms are not clean then the food is also not clean. It was this type of detail by Ray Kroc and Fred Turner that allows McDonald has to keep their competitive advantage and profitability. The strategic vision by Ray Kroc was passed down to the senior managers. The same set of principles and standards were passed down to the functional managers. The same set of principals was passed down to the front-line managers. The front-line managers passed this strategic plan to the employees. The uniformity starts at the top to the bottom instead of senior executives following strategic initiatives without applying these principals at the corporate levels. All other organizations in the fast food business should follow the strategic initiatives set forth by Ray Kroc. Ray Kroc has proven that if the entire organization follows the same plan, the sky is the limit.

Reference

Hill, C. &Jones, G. (2012).Essentials of strategic management.3^rd edition. Mason, OH, Cengage Learning