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Information Systems for Managers-NMIMS

Information Systems for Managers-NMIMS


The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in  1940  as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.

A McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27 percent over the three years ending in 2007 to $22.8 billion, and 9 percent growth in operating income to $3.9 billion.

It sells hamburgers, cheeseburgers, chicken, French fries, soft drinks, milkshakes and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps and smoothies.

Technology Used:

Volumes of data are generated, collected by organizations everyday from various sources. An information system collects, processes, stores, analyzes and disseminates information for a specific purpose. It includes inputs, outputs and processes that bring about this conversion by using technology such as personal computers. It distributes this information via networks and uses a feedback mechanism to improve its functionality.

There are various sources of information that exist at McDonalds to capture the data in the system. The operational managers collect, sort, modify and retrieve the transactions. It helps answer the routine questions and helps conduct business such as payroll, maintaining records of employee. The production of hamburgers, French fries call for ordering of raw materials from their suppliers and each of these transactions needs to be maintained to generate invoices. It has an efficient management of supplies.

In order to make decisions based on quality, ordering, a data worker needs to sift through data to pick and find the right choices that support decision making process .At first McDonalds was a small business which slowly expanded and analyzed the market to come up with new products.

Periodic reports to manage daily, monthly list of employees is maintained. The expenses are the compared with the budget and suitable plan of action is devised to meet target or increase revenues. The customer is of utmost importance and thus to serve them religiously the waiting time needs to be reduced. As soon an order is placed, it is transmitted to several workstations through the facility. The same appears in the kitchen of the restaurant and thus the customers can be served instantly


Networks are typically important to McDonalds as they provide a mechanism to provide interaction between the franchises spread over a large geographical area. To make its presence felt online and involve customers McDonalds developed McDonalds interactive in 1994 and then launched McFamily in 1995. The website proved to be less than successful and was later discontinued.

The term Business Intelligence (BI) represents the tools and systems that play a key role in the strategic planning process of the corporation. These systems allow a company to gather, store, access and analyze corporate data to aid in decision-making. Generally these systems will illustrate business intelligence in the areas of customer profiling, customer support, market research, market segmentation, product profitability, statistical analysis, and inventory and distribution analysis to name a few

Business intelligence software incorporates the ability to mine data, analyze, and report. Some modern BI software allows users to cross analyze and perform deep data research rapidly for better analysis of sales or performance on an individual, department or company level.In modern applications of business intelligence software, managers are able to quickly compile reports from data for forecasting, analysis, and business decision making.

McDonalds, has successfully applied the principles of an intelligent company. It uses Business Intelligence to make strategic decisions, such as what new dishes to add to or remove from their menus and which underperforming stores to close. It also uses BI for tactical matters such as renegotiating contracts with suppliers and identifying opportunities to improve inefficient processes. The process for new product introduction calls for rigorous testing at a certain stage. Testing begins with brainstorming, in which several cross-functional groups develop a variety of new product ideas. Only some of them make it past the next phase, judgmental screening, during which a group of marketing, product development, and operations people will evaluate ideas based on experience and intuition. Those that make the cut are actually developed and then tested in stores, with well-defined measures and control groups. At that point, executives decide whether to roll out a product system wide, modify it for retesting, or kill the whole idea. McDonalds has attained an enviable hit rate in new product introductions and executives say that their rigorous testing process is part of the reason why.



Q1: From the above passage, identify and elaborate on the different information systems and their role, which support the working of McDonalds.


Q2: Discuss how McDonald's can position itself as a market leader by using business intelligence tools of data mining, data warehousing. Does customer relationship management play a vital role in organizations growth? If yes, suggest how McDonald's could improvise the same.

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