Comparing And Contrasting CBP And Value Chain Of McDonald’s And H&R Block

The value chain of an organisation is a relatively new concept in the field of operation management. According to Porter 1985, the value chain is a process through which the product and service of the company move through (David & David, 2013). It characterises the process that a product or services have to move through from raw materials to final consumption and each of this stage creates a compelling value proposition for the company. This report will describe, compare and contrast a primary customer benefit package for two different organisations. It will then compare and contrast the value chain design and structure for different organisations. The advantages and disadvantages of these value chain design and structure will also be outlined in the report. The two organisations used in the report are McDonald’s, which is one of the largest fast food chains in the world and H&R Block, which is a Tax preparation company from America. 

A customer benefit package (CBP) could be defined as a clearly defined set of tangible and intangible features which the consumer recognises, pays for, experiences or uses. It is a way to visualise and conceptualise foods and services by thinking broadly about how goods and services are bundled together (David & David, 2013). It is about how an organisation whether a good provider or a service provider aims to have an effective and competitive CBP. The CBP is made up of two components, the primary goods, such as McCafe department of McDonald’s and the peripheral goods such as tax services from H&R Block. Here, primary good is defined as the core offering which attracts and attain customers and responds to their basic needs. On the other hand, peripheral goods are those goods which are not essential to the primary good but important for enhancing it (Asad, 2012).

The McCafe from the McDonald’s shows that the goods produced by the company as their primary good. For this, the concerned organisation aims to create new value and delights its customers through the best alternative products and services. From this, it could be assumed that McDonald’s is a good providing company. On the other hand, peripheral goods are provided by H&R Block such as tax services to the customers. The arrangement of financial services and tax discounts are the other peripheral services provided by H&R Block (Hrblock.com. 2019). The company philosophy for H&R Block is quite similar to McDonald’s. The company claims to be completely committed to providing its customers with the highest tax reform services, every time they contact the company. The slogan of the company ‘Tax Services for any way you file’ confirms that it is a service providing organisation. Some of the peripheral services which could set part of the H&R Block could be the online policy management, 24/7 customer service, interpreter services for the non-English speaking applicants and non-complicated application procedure. The organisation also offers expert guidance, upfront pricing and more ways to do tax file.

In order to summarise and compare the CBP’s of McDonald’s and H&R Block, it is important to first identify the similarities of the two organisations and their value chains (Hill, Jones & Schilling, 2014). Three common features of each of the CBP could be identified under these circumstances. Some common features of this are to offer discounted services to their customers (cost saving); both aims to provide excellent customer service levels and both these organisations offer periodic brochures and leaflets to gain the attention of the customers (Hill, Jones & Schilling, 2014). After recognising the similarities, it is important to find the differences between them. Goods offered by McDonald’s are coffee and other beverage facilities which could be compared to the H&R peripheral services such as 24/7 customer service, interpreter services and tax complication solutions.

The input-output perspective of McDonald’s value chain would comprise suppliers, inputs, transformation and the goods and services outcomes (McDonald’s.com. 2019). The McCafe coffee making facilities would sit under the value creation and the availability of the staffs would sit under the value creation. On the other hand, H&R Block has a pre-and post-sale model which consists gaining of the customers, value creation and keeping those customers (Hrblock.com. 2019). The online policy management from H&R Block could be considered in value creation, 24/7 service in gaining the customers and tax services for both value creation and gaining customers.  

In conclusion, it could be said that in the comparison between McDonald’s and H&R Block in the context of the primary customer benefit package, H&R Block is ensuring that their level of service is above the customer’s expectations; whereas, McDonald’s is mainly focused in ensuring that their product is seen superior to its competitors.

Customers now want innovative products, high quality, impeccable service, and quick service with low prices (Holweg and Helo, 2014). Customers now want value in every purchase or experience. Due to these expectations from the customers, organisations neither are nor forced to outsource and offshore their goods and services they offer to their clients (Krajewski, Ritzman & Malhotra, 2013). The main objective of the value chain is to create competitive advantage or strengthen the competitive advantage. By analyzing the main five Values chain activities under the primary activities McDonald can assure that the value exceeds the cost for creating the value. The five activities are mentioned briefly in the above, those are inbound logistics, outbound logistics, marketing and sales, services and operations (Laric, 2004). If McDonald can create a benefit in any of the activities through the analysis it can get the competitive benefits and therefore, increases the overall profitability. In order to a competitive advantage, McDonald may maps out certain activities within the five activities and searches the ways for creating efficiencies.

With the advantages, there lie some drawbacks of this analysis as sometimes the company’s vision and whole strategy are lost whenever the operations are divided into segments (McDonald’s.com. 2019). Creating efficiencies in the value chain activities is important for McDonald’s; though the value chain by connecting every single activity in the chain altogether might possibly lose the vision of how the activities can associate with one another.

McDonald’s for example, is a fast food company need to get their resources from different suppliers in different countries. Furthermore, for meeting the customer expectations, McDonald’s is now also offering McCafe, coffee and beverage facilities to its customers.

H&R Block, on the other hand, has not demonstrated any offshoring of their services which have limited the benefits for the company in compared to McDonald’s. The company is not offshoring their services due to the fact that it provides intangible service to its customers and ensures to provide the highest level of customer service to its clients.   

In operations, McDonald serves the customers as the franchise restaurants and company-owned as well. Nearly 80% of the restaurants are owned and it served as independent franchises (McDonald’s.com. 2019). The company’s franchises have formats like development licenses, affiliated and conventional franchise. In Affiliates, This form of franchising means a certain amount of foreign affiliated markets from where McDonald’s receives royalties according to the sales percentage. The Development license format includes a license that offers capitals for the total business operations which also involves the real estate as well. In this type of agreement, McDonald corporations do not invent nay capitals and royalty are paid by these licenses. According to the sales percentage with the fees of a new restaurant is possible. This structure is followed by 70 countries where McDonald exists (Luigi and Mihai, 2011).

McDonald’s operates according to the formats like counter-services, ski- thru, drive-thru and sit-down restaurants. Sit-down restaurant in McDonald is the conventional process that includes a waiter or waitress to take orders and delivers the food. The counter-services include self-service, whereas ski-thru and drive-thru are available in few areas and McDonald’s does not offer home delivery services. For Marketing and sales, McDonald’s uses media and print advertising for marketing message communication to conquer large customer base and to target customer groups (Krajewski, Ritzman & Malhotra, 2013). It also spends upon public relations, sale promotion, experiences and events as well. For the service activity, McDonald’s main competitive advantage is the high-speed provision of customer service. Efforts of the corporation to offer better and quality services to the consumers contradict the practices of minimum payments and above the minimum wages to the workers.

Advantages and Disadvantages of Value Chain Design and Structure

The strategic vision of McDonald’s is to be a worthy place for the customers for eating and drinking. The company’s overall multinational operations are linked with the global strategy which is basically Plan to Win that focuses upon the great customer experiences (Hill, Jones & Schilling, 2014). Its strategy vision is to serve better for great value and competitive advantages. Its aims are to create a friendly environment for being a socially responsible company which offers products and with a great return to its shareholders. McDonald’s corporation is the leading global restaurant chain and it also has effective and strong management with global expansion strategies mainly in Asian countries and gain a share of the international fast food market.

As per business context, McDonald’s has the strategy to make its fast food restaurant to be available to its customer base as low and affordable rate which is beneficial as the competitive price for thy customers (Krajewski, Ritzman & Malhotra, 2013). Its global strategy is to get to the large customer base in a much effective manner and enriching the experience which is the smartest step taken by the company. McDonald’s targets the market as per the demographic variable, growth and geographical reach that also might help the firm in leveraging the possibilities. The company strategy is to use the combinations of market expansions strategies and cost leadership strategies. Licensing and franchising are new forms of market entry that are used by the company for expanding business strategy (Hill, Jones & Schilling, 2014). The primer strategy used by McDonald’s is the cost leadership, it uses Porter’s model which is a generic strategy that includes tools to reduce the cost of the products and offer it at a low price.   

Many companies use competitive priorities when the managers of the firms lose the sight of business operations, main motive for being to offer standard services and products which customers want and needs at the cost that seems affordable (Lewis & Brown, 2012). McDonald’s has four major competitive priorities for the smooth operations management; those are flexibility, pricing, quality reliability and quality level.

Pricing- Price is the main concern for the customers it might be due to limited funds and might be differences of a high priced item and low priced item which do not actually justified (Rothaermel, 2013). The operations managers of the McDonald’s keep its costs at a good process and still earn profits.

McDonald’s Strategic Vision and Global Strategy

Quality level- It has two main elements fast delivery time and great performance design, McDonald has highly competitive products and it charges premium rates as customers have belief in superior capability (Lewis & Brown, 2012). The company also offers quick service that guarantees at the weekday lunchtime.

Quality Reliability- McDonald’s believes in on-time delivery and consistent quality and the company achieves their design specifications; therefore it is a renowned world widely (Presutti and Mawhinney, 2013).  It offers the same quality every corner of the country, it might be at Paris or it might be at New York it serves great and same quality.

Flexibility- McDonald serves flexible services in the context of products and volume, which means it, does change its product designs quickly and the managers emphasize creating those alterations for attracting more customers and customize the items to individual demands (Lewis & Brown, 2012).

Value Chain analysis is a very important component in H&R Block. One of the main aims of the company is to create value for the company by providing tax filling services to its clients.  The most effective and productive value chain analysis is completed by the commercial and tax teams working together from the start (Krajewski, Ritzman & Malhotra, 2013). The company has created its value by understanding all the issues and changelings in its business environment by working closely with its teams and clients.

The primary objectives of H&R Block include the five main activities such as inbound logistics, operations, outbound logistics, marketing and sales and service (Brown & Bessant, 2013).  In inbound logistics, H&R Block contact with the clients for handling their tax returns and scheduling their fillings. Under Operations, the activities associated under it are for transforming the inputs into final products (Krajewski, Ritzman & Malhotra, 2013). In this, H&R Block collects all tax returns from their clients and helps them in filling them. For meeting the activity of outbound logistics, H&R Block gives the complete tax filling to its clients.

The secondary activities of the company go across the primary activities and aim to coordinate and support the functions as much as possible by providing the different services to its clients. The support activities of H&R Block could be divided into procurement, technology development, firm infrastructure and human resource management (Brown & Bessant, 2013). The procurement activities of the H&R block are the inputs used by the company in its value chain and are required in every value activity. The R&D department of the company goes to analyse every possible tax policies, procedures and regulations for providing hassle free services to its clients. The HR activities of the company involve in recruiting, training, development and compensation of the staffs of the company (Krajewski, Ritzman & Malhotra, 2013). The HRM activities of the H&R Block impact its competitive advantage. The firm infrastructure of the company consists of several activities such as planning, financing, legal, governmental affairs and accounting.   

Conclusion

This study has portrayed the customer benefits package of McDonald’s and H&R Block. It also outlined how these two companies are different in the way they operate, mainly by addressing their individual value chains. The study has also established importance for companies to address the needs of the customers and their wants, for effectively delivering a service. It is identified that in the context of the primary customer benefit package, H&R Block is ensuring that their level of service is above the customer’s expectations; whereas, McDonald’s is mainly focused in ensuring that their product is seen superior to its competitors. The study also summarises that it is important for offshoring companies like McDonald’s to focus on the quality of their value chain to their customers. It is also important for the company to maintain a high standard of services and goods for meeting customer expectations. 

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