Thesis (MBA)--Stellenbosch University, 2004. / ENGLISH ABSTRACT: McDonald's is world renowned for the benchmark standards it sets in operations
management. This is evidenced by the numerous references in operations management
textbooks over the last 10-15 years. However, since 1999, McDonald's has not been able to
link this operations excellence to creating shareholder value. In fact, the McDonald's share
price has declined by 64 % over the last 4 years. In comparison, Wendy's (McDonald's
biggest competition in the US fast food market) share price has increased by 2 % over the
same period. Understanding why McDonald's has not been able to link operational
excellence and the creation of shareholder value is the reasoning behind this mini-thesis.
The hypothesis is that there are a number of factors. which influence shareholder value, and
operational excellence is but one of these factors. A literature survey was conducted in order
lO understand the underlying theories which link operational excellence and shareholder value
creation. Evidence supporting this hypothesis is then presented and discussed. In Chapter 3,
McDonald's ability to deliver operational excellence is evaluated against the evidence
presented in operations management textbooks and other sources. The success of
McDonald's in delivering perfonnance in the other factors affecting shareholder value is then
discussed in Chapter 4 and compared to its biggest competition. Firstly, the share price of
McDonald's is compared to its biggest competition (Wendy's), then the strategy of
McDonald's and its impact on shareholder value creation is discussed, along with
McDonald's ability to implement the other important factors and drivers, namely customer
value creation, efficiency of value delivery and direct financial impact on shareholders. As a
result of the above evidence. it was found that there are two basic reasons why McDonald's
has not been able to link operational excellence and shareholder value creation:
1. Relative to its competition, McDonald's has not demonstrated sufficient competence
in the other factors, which influence shareholder value creation. These factors are:
customer value creation and the efficiency of customer value delivery. This is further
evidenced by the financial output measures of McDonald's relative to its competition.
2. McDonald's ability in delivering operational excellence has diminished recently. This
is evidenced by falling ratings in customer satisfaction surveys.
The above reasons are evidenced by customer satisfaction survey results, comparative
financial results and a number of non-direct driver results. In order to increase shareholder
value creation, it is recommended that McDonald's change the focus of its strategy from
operations to the creation of customer value. In order to support this change, the
organisational structure and business processes will have to be changed by top management,
who must be the crusaders of this change. / AFRIKAANSE OPSOMMING: McDonald's is bekend vir die maatskappy se wereldklas bedryfs bestuur standaardc. Die
standaarde word tel kens na verwys in menige bedryfs bestuur handboeke oor die afgelope 10
tot 15 jaar. McDonald's kon egtcr nie daarin slaag om die hoe bedryfsbetuur standaarde in
aandeelhouer waarde te omskep nic. Die waarde van die McDonald's aandele het met 64%
gedaaJ oor die afgelope 4 jaar. In kontras het Wendy's (McDonald's se grootste mededinger
in die Amerikaanse kitskos mark) se aandeel pryse met meer as 2% gestyg oor dieselfde
peri ode. Die redc vir hierdie studie is dan juis om te bepaal waarom McDonald's nie hul
voortrcflike bestuurs standaarde kon koppel aan stygende aandeelhouer waarde nic.
Die hipotese is dat daar 'n aantal faktore is wat die aandeelhouer waarde van 'n maatskappy
bepaal en dat bedryfs bestuur standaarde maar net een van hierdie faktore is. 'n Literatuur
studie is gedoen om te bepaal wat die verwantskap is tussen puik bedryfsbetuur standaarde en
die skepping van aandeelhouer waarde. Die bewyse vanuit die literatuurstudie is dan gebruik
om die hipotese mee te toets. In Hoofstuk 3 is die vennoe van McDonald' s om hoe
bedryfsbestuur standaarde te handhaaf evalueer aan die hand van die literatuur studie.
McDonald's se sukses in die implementering van die ander faktore wat lei tot verhoogde
aandeelhouer waarde is in Hoofstuk 4 bespreek en terselfde tyd vergelyk met die verrnoens
van sy grootste mededingers. Eerstens is die aandeelprys van McDonald's met die van sy
grootste mededinger (Wendy's) vergelyk en tweedens is die strategie van McDonald's en die
impak daarvan op aandeelhouer waarde bespreek. Ander belangrike faktore soos kliente
waarde skepping. effektiwiteit van waarde toevoeging en direkte finansiele impak op
aandeelhouers is ingesluit in die bespreking. Daar is gevind dat daar twee hoofredes is
waarom McDonald's nie daarin geslaag het om bedryfs bestuur uitmuntenheid te omskep in
aandeelhouer waarde nie:
1. McDonald's het in vergelyking met sy mededingers nie goed genoeg gedoen m.b.t. die
ander faktore wat aandeelhouer waarde bernvloed nie. Hierdie faktore is kliente
waarde skepping en effektiwiteit van waarde toevoeging.
2. McDonald's se bedryfs bestuur standaarde het begin afneem. Dit word gestaaf deur
laer waarderings in klante tevredenheids bepalings.
Die onvermoe van McDonald' s om die bogenoemde faktore te implementeer word deur die
klante tevredenheids bepalings, vergelykende finansiele resultate en 'n aantaJ indirekte
maatstawwe gestaaf. Daar word dus voorgestel dat McDonald's sy stralegiese fokus moet
verskuif vanaf bedryfs bestuur optimisering na kliente waarde skepping. Die organisasie
struktuur en besigheids prosesse van McDonald's sal dus deur bestuur herorganiseer moet
word om die verandering in strategie te kan ondersteun.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/21214 |
| Date | 03 1900 |
| Creators | Bryans, Robert |
| Contributors | Von Leipzig, Konrad, Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Rights | Stellenbosch University |
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