Galapagos Islands Message Board

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Strategies & Market Trends : Galapagos Islands

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To: Techplayer who wrote (22517)	1/22/2003 9:32:06 AM
From: MulhollandDrive	Read Replies (1) of 57110

i think the productivity gains have been duly noted and accepted... the question becomes...at what point are productivity gains reaching a point of diminishing returns? recently mcdonalds shelved a very expensive IT expenditure to network all of their stores (cisco i believe)...too costly...obviously if mcdonalds felt the ensuing productivity gain would exceed the cost of the expenditure they would implement...however if the belief is that they are dealing with a continuing decline of demand...that pushes forward the need for the productivity enhancement to pay for itself to justify the expense. this is even more relevant as they are dealing with the same overcapacity issues as they are in essence often competing against themselves as well as the burger kings and wendis of the world. the first order of business is to align their supply (locations) to the demand. not a whole lot of reason to "streamline" operations and increase efficiencies where the customer base is contracting on a broad basis...(ie..not company or store specific, rather due to wide scale economic conditions)

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