Supply Chain Management And Porter’s Value Chain Analysis For Zara

Introduction to Zara

Question:

Discuss about the Business model innovation as lever of organizational.

Zara is a retail store located in Arteixo, Alicia in Spain. Armancio Ortega and Rosalia Mera set up the company in 1975 (Zara.com 2018). In the modern day, Zara is one of the most famous fashion retail stores in the world that provide various types of clothing design. The company is considered as the main brand of Inditex Group (Zara.com 2018). Apart from this, Zara also owns a few brands that make the company earn a high amount of revenue in the market. These brands include Massimo Dutti, Zara Home, Oyosho and so on. As of 2017, Zara manages more than 20 clothing collections per year. The number of stores of the company currently is 2266 that is spread across the world. The revenue of the company is about US$9 billion (Zara.com 2018). Zara produces more than 450 million clothing items per year. Most of the new products of Zara are delivered within 24-40 hours across the world. The need for supply chain management for Zara is to maintain sustainability and profitability in the organisation. Sustainability in integrated supply chain management can help in maintaining or lowering the level of cost reduction that the organisation has to deal with. In addition, Zara also maintains new fashion line in retail stores. The current solution focuses on two supply network configurations that can be used to analyse the situation in Zara. Porter’s value chain model is also highlighted to identify the primary and secondary resources of the company and the effectiveness of it. At the end, recommendation is provided which highlights the best supply network required for Zara.

Proposing of a supply network require the assistance of two supply chain networks by applying the AS-IS process and the TO-BE process. Based on this, two models can be proposed that highlights the effectiveness of the supply network configuration. One such model that can be proposed is the manufacturer storage model. This model provides companies with an opportunity to conduct direct shipping with the outlets of the companies (Jbara, David and Alpan 2015). The availability of several suppliers can help the company to categorise the products of the company based on the supplier that provides Zara with the products.

According to Fredendall and Hill (2016), this can help Zara to have a visibility based on the top and bottom level approach of the organisation. Thus, the store level manager can provide direct placement to the suppliers by analysing the demand and forecast of the system. Fahimnia, Sarkis and Davarzani (2015) pointed out the fact that in this case, the company retains transportation ownership so that goods can be picked directly from the suppliers. The second model that can be utilised by Zara is the cross-docking model. In this case, the method of ordering follows the general rule. The orders will be generated at the stores and the manufacturers or the suppliers can directly get the orders from the customers. The supplier arranges the orders systematically for the convenience of the distribution centre. The flow of information and products are inversely proportional to one another and thereby it can be said that the stock of the company can be handled keeping in mind the distribution centre (Pagell and Shevchenko 2014).

Supply Chain Network Configuration

Porter’s value chain analysis is analysed into two major activities that consist of the primary as well as the secondary activities. The primary activities involve the operations that deal with the inbound as well as outbound activities. According to Long (2014), marketing and selling can also be considered as the primary activities of a company. The secondary activities involve the administrative activities such as the HR department of an organisation, infrastructure and the information technology. In the case of Zara, both the primary as well as the secondary activities needs to be considered for the betterment of the company and to analyse the contribution it has made to the changes.

The support activities provide the information that supports the visibility of the model. Activities such as order generation, manufacturing of the stocks, identifying the production stocks and the delivery status are some of the important areas in which development is required for Zara. Managing the procurement provide order to the suppliers based on the requirements of the production as well as the orders that have been generated. According to Ross (2016), the ultimate primary activity of Zara needs to be the inbound and outbound logistics of the company. However, sales and marketing play an important role as it helps in generating revenue for the company.

 Schönsleben (2016) stated that supply chain management is the evolution of the business units into a horizontal or vertical chain. In the case of Zara, the application of the integrated supply chain management can help the facilitation of the company in various manners. The primary concern of Zara is the inventory of the company. The build of inventory in the company is limited mostly because the company receives products that have been ordered. The excess amount of orders makes the stocks of the company obsolete and it becomes difficult for Zara to maintain the records of the stock of the company. Jbara, David and Alpan (2015) stated that the cash flow of the company could reduce the excess amount of stock that is presented at the warehouse of the company. The fact that Zara places the orders directly to the suppliers and manufacturers, the procurement cost of the company can reduce thereby providing Zara with an opportunity to invest in other areas of the business.

However, as observed by Rushton, Croucher and Baker (2014) the overall effect of the company needs to focus on the generation of the revenue from different sources apart from selling fashionable items. Moreover, Zara needs to ensure that the integration with customers is maintained. This is because the customers are the main stakeholders of the company and it is important that the company identify the customers based on the application of the market segment and target market.

Conclusions and recommendations

Thus, it can be recommended that cross-docking model can be adopted by Zara to increase its supply chain. Proper justification can be made that highlights the reasons for the choice of this model over other models of business. One of the key factors is the fact that it may help in the reduction of the holding cost of Zara. The inventory holding cost can be an excess expense for Zara. Apart from this, the cross-docking model provides an opportunity to replace heavyweight boxes with a lightweight package. This is another advantage that none of the other models provides. However, the biggest advantage that this model provides is the reduced delivery time. In the fast-paced world, customers want their product without any delay. With the help of this particular system, Zara can provide quick delivery to the customers. This can be considered as an exceptional advantage considering the fact that the customers prefer to get their products on time. In conclusion it can be said that Zara need to analyse the integrated market system and based on it supply chain management system can be formed. This can help Zara to maintain its dominance in the international market. With the help of Porter’s five forces, Zara can analyse the primary as well as the secondary factors that provide the main activities of Zara.

Porter’s Value Chain Model for Zara

Agility Logistics is a public company situated in U.A.E. Agility Logistics is a global logistics company that is headquartered in Kuwait. The company was established in 1979 and until date, it has over 22,000 employees working to provide freight forward, transportation as well as supply chain management (Agility.com 2018). The main business of the company is done with the Government, international institutions and worldwide relief agencies. Reports suggest that the company have over 500 offices located in over 100 countries all across the globe (Agility.com 2018).  The funding of the company can be considered to be in safe hands, as the company shares maintain trade with the Kuwait Stock Exchange and the Dubai Financial Market (Agility.com 2018). In this particular task, focus is made on Agility Logistics and the manner in which the company can form strategies to make transitions within the organisation. The change is made from a push-based model to a pull-based model. Apart from this, the concept of Response based business model is discussed and the factors that exist in this model are highlighted. The procurement strategies that need to be implemented by Agility Logistics and the importance of Collaborative Planning, Forecasting and Replenishment (CPFR) are also mentioned.                     

 It has been reported that Agility Logistics is undergoing a transition phase in order to change the strategies it has on the supply chain management. The earlier strategy adopted by the company was the push-based strategy while this has now changed into pull strategy. According to Rushton, Croucher and Baker (2014), the transition of the company is mainly done based on the analysis of the manner in which the company documents its orders. It has been seen that Agility Logistics forecast the order of their services by accessing the performance of the previous years. It has been seen that the general method that has been used is the MRP method. This method is useful for determining the requirement of stocks that exist in the regional stores. The record analysed by a periodic review of the points gained from the re-ordering of the materials. Apart from this, the re-ordering of the quantity, as well as the availability of the safety stocks, is also analysed by the company.

Long (2014) opined that the adoption of the push-based model helped Agility Logistics to understand the enormous inventory of the stores. The capability of the regional warehouses is also understood with the application of this model. It has been seen that the holding cost of the company can have a direct impact on its bottom line. Thus, the introduction of this strategy has resulted in the transition of the company. This has even changed Agility Logistics from centralisation to decentralisation. In this regard, one of the positive results from the transition is the fact that the manager of the company has proclaimed the establishment of stores all across the city (Agility.com 2018). The main job of the store manager is to analyse the behaviour of the customers, identify trends in the market and based on it, changes are made in the working of the company.

Support Activities for Supply Chain Management in Zara

 Agility Logistics need to ensure that certain factors are considered that can help the company cope up with the Response based business model. These factors are justified to provide a detailed analysis of its importance in the logistics department.

Relation with the retailers: Jbara, David and Alpan (2015) stated that as Agility Logistics is a supplier company, it is necessary that the company maintain healthy business relations with the retailers. New strategies need to be developed so that business can be done with the main business organisations in the market. Moreover, the free flow of transportation is also a requirement for Agility Logistics.

Obligations: Obligation related to the contractual development and the capability of the supplier help in meeting the response based requirements. The capability of the supplier is taken into consideration while understanding the obligation of the company. Agility Logistics need to ensure that the contract with the retailers is maintained so that the scope of work of the company can be understood. The change, however, needs to come in the timely delivery of the items. Another important aspect that needs to be considered is the availability of the transport. The transport needs to be in excess so that the company can afford to provide proper services to the retailers.

 IT and ICT system: In the modern world, Information Technology (IT) and Information Communication Technology (ICT) form an integral part of the business management. The point of renting of the transport or employees requires updates so that rescheduling can be done based on the situation at hand. As stated by Sellitto et al. (2015) certain pre-requisites need to be made so that Agility Logistics can maintain a proper record of their inventory. These include checking and identifying the inventory items, updating the status of the items, integrating the data, identifying the lead-time of the items and so on.

Transportation: Agility Logistics need to ensure that the mode of transportation of the goods and items are risk-free and that organisations can rely on the company. To ensure such a trust it is necessary to deliver the goods and services on time so that the loyalty of the customers can be maintained. It is to be noted that like customers, retail companies also provide feedback about the mode of transportation adopted by a logistics company (Aitken et al. 2016). These factors help in deciding the primary suppliers of the business organisations and help in the development of the new contract with the logistics company.

Increase the warehouse capacity: The warehouses of the company need to be developed in a manner that provides an excess capacity for the company to maintain its business. Proper warehousing facility provides an opportunity to increase the number of transportation in the market and thereby increase the possibility of gaining more customers.

Procurement strategies require inputs contributed by other business units so that a company can be clearly attached to the objectives of an organisation that is supposed to be pull-based. Hence, Heckmann, Comes and Nickel (2015) stated that to ensure that a procurement model is developed it is necessary for an organisation to maintain a business plan as well as analyse the availability of funds and demand data. Agility Logistics can develop the procurement based on the corporate and operational strategy adopted by the managers. However, the procurement of the company needs to be done keeping in mind certain factors. These factors include the optimisation of suppliers, international sourcing, management of risks and management of the vendors.

Integrated Supply Chain Management for Zara

Along with these, other factors include identifying the existing gaps between the old process and the newly applied process with an analysis of the availability of the resources. The factors can help in the successful procurement of the strategies that an organisation applies (Ganji, Shaharoun and Norehan 2015). In the case of Agility Logistics, the procurement method that needs to be implemented includes the vendor management. This is mainly because of the fact that the company works following the pull-based model. Hence, the procurement method required in this case is the optimisation of the retailers. It is necessary to develop a strategic compliance with the retailers so that the transportation services provided by Agility Logistics can be availed particularly during the time of festivities. The procurement needs to select 5 to 6 business organisations that have a reputation in the market and have the interest to avail the transportation services provided by Agility Logistics.

However, it is to be kept in mind that the risks in terms of delivery made need to be reduced. A contract needs to be maintained that covers any loss related to transportation risks during product transfer. As stated by Palma-Mendoza (2014) development of KPI is required so that the performance of the transportation of the companies can be measured. Vendor management can help Agility Logistics to enhance the operations. A close coordination can be maintained with the retail business sectors so that a professional development can be made. Another important strategy that Agility Logistics can apply is the modification of the return policies. 

The Collaborative Planning, Forecasting and Replenishment (CPFR) can be a huge contributor to both models that have collaborative efforts. The efforts are made in a structured manner so that the demands made by the customers are met. According to Carayannis, Sindakis and Walter (2015), such a process can be made possible by providing a link between the sales and marketing departments of an organisation. Gathering of data can also help in gaining the required information about the customers. The cost of inventory can be reduced along with the maintenance of logistics as well as transportation required for the passing of supplies from one place to another (Hollmann, Scavarda and Thomé 2015).

To implement these tactics in Agility Logistics, the application of cross-functional category teams can be implemented. These teams need to be responsible for each department of the logistic organisation such as in finance, marketing, IT and human resource. This can help the organisation to have a clear visibility of the functions that need to be done in the organisation. For example, the HR manager of Agility Logistics needs to ensure that the supply chain management of the company is maintained in a stable manner so that the company becomes the largest logistics and transportation company in the UAE. Hence, the reactive, as well as the proactive models of CPFR, need to be analysed keeping in mind the nature of competitiveness that exists in the logistics industry in the UAE. It has been seen that at the initial stage, the CPFR focuses on the strategies of a company (Hill, Zhang and Miller 2018).

Conclusion

Once the strategy has been identified, the demand plan of the company is analysed. Thus, keeping in mind the present condition of Agility Logistics the pull model of CPFR can help in contributing towards a shared business plan. The sharing of the business plan is done mainly between the supplier as well as the buyer. Ntabe et al. (2015) stated that the implementation of this is that the supplier of the materials for making the required transportation chain consists of a clear demand of the customers. The demand movement need to be based on the upcoming 5 months so that Agility Logistics have a clear plan for the existing materials and resources it has for the movement of the materials. Apart from this, the stock of the company needs to increase to meet the increased demand of the companies and customers particularly during the festive season (Liu et al. 2014). For example, during the time of Christmas, the logistics companies tend to have more demand in terms of transport because of the shifting of materials from one store another.

Hence, an optimum stock level is required to meet such an increased demand in the transportation unit of the company. However, as stated by Lubik and Garnsey (2016) the adoption of the new pull model needs the proper contribution of the implementation of the CPFR theory. This needs to be done in a systematic manner so that a common business objective can be established. Initially, the business units need to be aligned in a structured manner so that a common business plan can be developed. These business units include the core functional areas of the company such as the departments of HR, Finance, Sales and Marketing.

According to Brandenburg et al. (2014), the order of the transportation service needs to be forecasted based on the demands of the customers in the retail stores. Promotion plan of a company is taken into consideration while implementing the effectiveness of CPFR. Agility Logistics have managed to implement a category management team. This team have clarity of vision of the logistics strategy that is applied to the organisation.  The overall revenue of the company is analysed and based on it the expected gains from rendering transportation services to other companies are analysed (Agility.com 2018).

 McDonald’s is one of the largest fast food restaurants in the world.  Richard and Maurice McDonald established the restaurant chain in 1940. Initially, the restaurant was set up only in the regions of San Bernardino in California. However, over the years, it has grown in a global context and is considered as one of the biggest restaurant chains in the world second only to KFC (Mcdonalds.com 2018). The restaurant started by supplying hamburgers in the Californian region. However, with time, the versatility of the restaurant grew over the years. Presently the company has over 37,000-outlet spread across a 100 countries in the world (Mcdonalds.com 2018). However, certain problems exist within the restaurant sector and these pose serious threats to the stability in the markets of the restaurant across the globe.

The case study sheds light on the major problem that was faced by the restaurant. The integrity and the transparency that exists in the supply chain of the restaurant received a huge set back due to the complaints made by the quality of the products. The focus of the restaurant is to analyse and identify the initial place from which the ingredients are purchased by the restaurant. McDonald’s have developed strategies to identify the sources of the ingredients and identify the best quality that is provided by the market. As such the case study has provided several steps that highlight the efforts put in by the company to regain the trust of the customers. However, more effort is required for McDonald’s so that the restaurant can be effective in the global market and across every country in the world. However, despite the improvement of the conditions in the company, McDonald’s have faced certain challenges in some countries.

Having considered the scenario provided in the case study, it can be said that McDonald’s can be involved with certain objectives that are related to the supply chain management of a business. As stated by Meixell and Luoma (2015) several such strategies can be applied to the company that can help to uphold the reputation of the company in the global as well as regional market. However, the analysis of the case study is done by highlighting the most important and critical factors that need to be adopted by the company for prompt improvement of the services rendered and products manufactured by the company.

 The initial requirement is to set the standard so that high quality of services and products can be delivered by the restaurant. These standards need to be set across networks so that every outlet and franchise of the restaurant can maintain it and work on improving the standard. As observed by Schoenherr and Speier?Pero (2015), the biggest concern for the restaurant is the fact that the network of standards may deliver a tainted image of McDonald’s the global economy. However, this is not the case as the consistency of the standards can help in upholding the image of the company from one location to another.

However, the presence of competitors may add a different perspective for the outcome of the company. It is to be considered that the changing the standard of the company may be a blessing as most of the times, the regional requirement of the company needs to vary from one region to another. In this regard, it can be said that consistency can be a form that may hamper the image of the restaurant (Shadan, Khoshnoudian and Esfandiari 2016). For example, if customers of one region get good quality products than the customers of other regions then it can result in the tarnished image of the restaurant.

Along with consistency, the sustainability of the standards is important for the growth and survival of the restaurant. Sustainability can be maintained by ensuring that quality check is always held at all levels. As suggested by Billiet et al. (2015) these quality checks need to be held across franchises as well as across different outlets. The gaps that exist between the process of supplying the products and selecting the franchises need to be mitigated so that proper strategies can be implemented. Deviations received from the normal standard need to be provided to the managers so that appropriate solutions can be applied (Martins, Rindova and Greenbaum 2015).

Another most important factor in the global marketing phenomenon is the existence of ethical value and a sense of transparency in the supply chain method. For example, the suppliers of McDonald’s, the standard they maintain and the Government rules of the region are taken into consideration before the implementation of the strategies (Saebi and Foss 2015). The source of supply is also taken into consideration as fresh products are the main focal point of the restaurant. Such considerations are taken as the restaurant serves meat as the primary protein and the meats need to be based on the demands of the customers. For example, customers in India need to be ensured that the meat served by the restaurant is not beef.

From the analysis of the case study, it has been seen that McDonald’s had to face certain challenges in the global market. The challenges mainly occur in the form of positioning the restaurant in the competitive market and consequently gaining the trust of the customers. Hence, to mitigate the challenges it can be said that McDonald’s can apply certain strategies that highlight the effective ways by which both the strategies can be mitigated.

From the analysis, it can be said that one of the biggest improvements that McDonald’s need to make is in the quality of the products. The quality of the products needs to be checked from the source of its development. This includes the ingredients used for the manufacturing of the products until its final production. The quality check needs to be done across all systems in a global manner. According to Schönsleben (2016), the quality check system needs to be such that the suppliers, as well as the buyers of the products, can be analysed and based on it McDonald’s can maintain its strategy. The level of checking the quality needs to be done in a quicker manner so that a huge area can be covered within a short time. To do this, it is necessary for McDonald’s to develop a high level of quality check awareness programme (Touboulic and Walker 2015). The key to success will be to implement the strategy and spread it across the franchises of the company so that the partners, suppliers and producers can understand the standard maintained by McDonald’s.

At the same time, the improvement in the communication between the top and bottom level can help in the growth of the restaurant. Ross (2016) stated that it is important for the manager to ensure that people working in McDonald’s maintain a two-way communication so that thoughts and ideas can be exchanged. These ideas generally need to include the discussions regarding the quality awareness, production as well as plans for the betterment of the restaurant. The involvement of the different departments of the restaurant can help in its success in its future.

The application of the SCOR scope propels McDonald’s to have a wider spectrum at the international level. The SCOR model consists of four elements that are necessary for the success of a business organisation. As observed by Fredendall and Hill (2016) these include plan, source, make, deliver and return. These elements are explored from the point of view of the suppliers and are maintained for the proper marketing of the business. For example, the tier one supplier of the company consists of the raw materials that are normally provided to one supplier and are accountable to that particular supplier. Therefore, it is necessary that the raw materials of McDonald’s meet the standard of the company particularly at the regional level so that quality of the products can be maintained. It is usually expected that the suppliers will provide quality products in terms of raw materials to the company (Beske and Seuring 2014).

In this regard, it can be said that the elements of the SCOR model need to be kept under control. The SCOR model is applicable based on the sources of the raw materials and certain aspects such the number of raw materials required, the time of requirement of the materials as well as the place of purchase need to be taken into consideration. It has been seen that the delivery of the raw materials is mainly done directly in the outlets (Pagell and Shevchenko 2014). This is a cost-effective process as usually the transportation cost of the raw materials are high. This creates the main difference between gaining the products from a regional distributor with that of the local distributor. Another important aspect that McDonald’s need to consider is the returns that are derived from the distributors or the franchises.

The perfect manner in which such distribution can be managed is in the regional matter as any problems relating to supply process or ethical consideration can be managed. According to Fahimnia, Sarkis and Davarzani (2015), the customers are also involved in the plan as the sourcing; manufacturing and delivering of the final products to the customers need to be taken into consideration. Hence, the sourcing is based on the tastes and preferences of the customers that are based on the list of the menu provided by the restaurant. The plan needs to be based on the delivery to the customers either in the outlet or as a home delivery service along with the responses that are to be received.

Cross-functional supply chain involves the speedy delivery of products in the market by reducing the decision-making time required for by the marketing managers. The cross-functional supply chain drivers of McDonald’s are the basic drivers that influence the supply chain of a company. The three drivers include inventory, sourcing and pricing (Mcdonalds.com 2018). However, the company highlights the production ability and considers it as the fourth driver of the supply chain management. Most of the information of the company is derived from four drivers that help the managers to take a proper decision. Thus, McDonald’s take into consideration the four factors that are involved in supply chain management of the company.

Production: This is important; as the ultimate product, a line needs to be decided as it determines the direct path to the customers. It has been reported that the business of McDonald’s usually flourishes during the daytime. This includes the involvement of students and business executives that are the potential target market of the company. However, certain items served by the restaurant have certain timings (Mcdonalds.com 2018). Such as the breakfast menu of the restaurant are produced only in the allocated time. People ordering the breakfast menu after the expiry of its time tend to be disappointed due to the lack of its availability. Moreover, Brindley (2017) stated that the tastes of the products are changed significantly depending upon the demands of the customers. An example includes the fact that in the Asian sub-continent and in the Jamaican region, the taste of some of the products are made spicy, as the people in these regions are fond of spicy items. Apart from this, the exclusion of beef as the main source of protein in the Indian market is also a significant factor for the company. Other productions include the introduction of special menus during holiday seasons.

Sourcing: Reports claim that the main source of supplies from McDonald’s comes from the global franchises it holds (Mcdonalds.com 2018). The main purpose is to ensure that the standards of the products are maintained by keeping in mind the general standard of the company. McDonald’s consist of a variety of finished products such as meat, vegetables, baked items as well as desserts. Due to this, it is necessary that the number of suppliers of the restaurant also increase. According to Brandenburg (2014), dependence on the local market is also maintained by the restaurant so that the regional tastes can be achieved. Close ties need to be maintained with the local suppliers so that a competitive advantage can be achieved related to the local market. This can help the company maintain an abundant supply of raw materials and ensure that the standards of the restaurant are maintained. Hence, McDonald’s need to maintain a strong performance index of the suppliers and continuously improves the standard of the products. In local market, McDonald’s can maintain a good relationship with the suppliers so that it can ensure that proper service of materials required for the manufacturing of the products are done.

Pricing: Wisner, Tan and Leong (2014) stated that to satisfy the customers it is necessary that the prices of the products remain pocket-friendly. This can attract customers of all social class and ensure profitability for an organisation. In the case of McDonald’s, the price factor of the restaurant is a string as it takes into account the network established with the suppliers as well as the customers. The philosophy of the company is to control the cost ahead of the price (Mcdonalds.com 2018). To do so, it is necessary for the restaurant to work with the suppliers in a close proximity. Moreover, the pocket-friendly price served by McDonald’s is the main reason for the popularity of the restaurant. The fact that McDonald’s target customers of various social class and demographic ensures that the pricing is an important factor for the company.

Inventory: The inventory of a company is crucial as it provides an account of the storage capacity of the particular company. More space in inventory signifies more storage of resources. In the case of McDonald’s, the company need to maintain a 3-tier inventory system. This includes the distributor as well as the facility in the regional productivity. According to Hugos (2018), the outlet level provides the company with the determination of demand and based on the forecast made by the marketing managers, local distributors are given contract about manufacturing products. The owners of the franchises at the regional level select these distributors by considering the loyalty and the type of materials they serve. The inventory stocks also need to be maintained across the country for meeting the national requirements. For example, it is necessary to maintain a heavy stock of chicken as the people of the country does not consume beef. For this reason, it is necessary for the company to maintain an active transportation facility. This is required, as the products need to be transferred from one region to another (Mangan, Lalwani and Lalwani 2016). The fact that the restaurant mainly deals with edible items, the delivery of the products in the market at the correct time is essential (Refer to appendices).

After conducting, an analysis of the situation of McDonald’s the challenges faced by McDonald’s while maintaining its position in the global environment can be described. The main challenges include:

Maintaining a good standard of products and services across various networks: McDonald’s maintains a high standard of products and services in regions it has its business. However, this has become a huge challenge for them in the global context mainly due to the un-uniformity of network settings across the international market. As observed by Monczka et al. (2015), the menu of the company needs to change from one place to another depending upon the tastes of the customers that usually occur due to the religious beliefs and the growing trend in the food market. Due to this, a proper standard cannot be maintained by the organisation. Thus, the customers suffer a huge setback due to the fluctuations in the market, as most customers do not have the preference of one particular food product to that of another.

Product quality: According to Christopher (2016), to ensure that customers are satisfied it is necessary for companies serving to food to maintain the quality of products. In the case of McDonald’s, the excess change in the preferences of the customers makes it difficult for the company to maintain the quality of the products on a consistent basis. Moreover, the materials used for the manufacturing of the products also need to be fresh so that the customers do not suffer from any health issues. In this case, it can be said that the transparency of the products maintained by McDonald’s need to improve mainly due to the fact that safety regarding food is one of the main criteria that is required to be maintained by a restaurant (Jacobs, Chase and Lummus 2014).

After the analysis of the case study, it can be said that the major flaw of the company lies in the fact that it lacks the clarity of implementing the practice required for success at a global level. As stated by Stadtler (2015), despite the application of certain changes such as improving the level of quality, supplies as well as the development of the franchise, the company need to remain transparent with the growing need of customer demands. Another development ensured by McDonald’s is the fact that the raw materials imported by the company are labelled with the country of origin. This can help in maintaining business relations with the countries that supply good raw materials. It has been seen that McDonald’s have undergone a significant rise in the market. The manner in which the company have managed to broaden its growth is mainly due to the two factors mentioned. The ability to remain transparent and flexible in the growing market challenge has helped the company attain greater success than many of its competitors. Moreover, it is also seen that the price of the products are cheap and the target market of the company enjoy the products that are sold. This provides opportunities to remain a top brand in the market.

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Effectiveness of Collaborative Planning, Forecasting and Replenishment