Essays on Comparison of Value Chain and Porters Five Forces of McDonalds and Tesco Assignment

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The paper 'Comparison of Value Chain and Porter’ s Five Forces of McDonald’ s and Tesco' is a wonderful example of a management term paper. Tesco Private Ltd Company is a retail firm that specializes in retailing groceries as well as general items. Tesco was founded in 1919 and started its first store in Edgware, London in the United Kingdom in 1929. The firm holds third place globally as a retailer after Carrefour and Wal-Mart. The firm has close to 2440 stores and employs over four million people. The market share of Tesco in the UK retailing industry is about 12.5% (Kroenke 67).

It is the world’ s largest online grocer. Tesco has diversified geographically into widely-separated market sectors. Tesco operates in different business sectors within the retail industry like apparel, books, grocery, internet services, and DVD rentals. Tesco has a customer base of one million and above two-hundred-fifty thousand orders per week. McDonald’ sMcDonald’ s is the world’ s leading chain of hamburger fast food restaurants which serves close to 68 million customers daily across 119 countries. The firm headquarters is in the United States.

The company commenced business in 1940 as a barbecue restaurant being operated by Maurice and Richard McDonald. The business was reorganized in 1948 as a hamburger stand applying production line principles. The worldwide growth of the chain was overseen by Ray Kroc who joined the company as a franchise in 1955 but later purchased it from the McDonald’ s brothers (Porter, 2008). McDonald’ s revenues are generated from royalties, rents, and fees paid by franchisees and sales in company-operated restaurants. Products sold by McDonald’ s include hamburgers, chicken, cheeseburgers, French fries, soft drinks, desserts, milkshakes, and breakfast items.

The company has responded to changing customer needs by expanding its menu to include fish, smoothies, wraps, salads, and fruit. How information is managed and autonomy of MIS divisionTescoInformation management at Tesco is done by IVIS Group that came up with award-winning Sonetto Channel Information Management (CIM); that Tesco. com uses to manage its online marketing program. Tesco outsources IT functions. Sonetto CIM is a component of the Sonetto Retail suite that enables a business to control, manage, and publish information across multiple channels. A single feed is taken by Sonetto CIM and specifically tailors the information for every channel in a multi-channel setting.

Sonetto CIM is connected to other pricing or product systems, therefore, ensuring real-time, dynamic and accurate information delivery to every channel (Kroenke 67). McDonald’ sMcDonald’ s has an autonomous MIS division. McDonald’ s has large information concerning any part of operations related to McDonald’ s like financial operations, competitors, suppliers, and employees. The database at McDonald’ s is managed by a database administrator (Wood, 1424). Value Chain and Porter’ s Five Forces of the two organizations. Value chain analysis is a means the increasing customer satisfaction and managing cost is a more effective way.

Value Chain refers to the systematic approach to evaluating the development of competitive advantage. A value chain defines a chain of activities for any firm operating in a given industry. The value chain enumerates the generic value-adding activities of a firm. The activities are divided into support activities and primary activities. Primary activities comprise of inbound logistics, operations/production, outbound logistics, sales (demand) and marketing, and services (maintenance) (Porter, 2008). Support activities comprise of human resource management, administrative infrastructure management, procurement, and technology development (R& D).

The value and cost drivers are pointed out for each value activity. Each phase of this generic chain accumulates costs while adding value to the product.


Wood, D. (2009) ‘Are We Cooked Yet?’ Treasury & Risk Management, 15(6), June 2009, p.1424

Kroenke, D.M., Using MIS, 2nd edition, Routledge, Upper Saddle River, New Jersey, 2009.

Porter, M.E. (2008) The Five Competitive Forces That Shape Strategy, Harvard business Review, January 2008.

Rainer and Turban, Introduction to Information Systems (2nd edition), Wiley, 2009, pp 36–41.

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