McDonald's AND THE USTA, A CONTRAST IN COMPETENCE By Javier Palenque

I am sure all readers have been at McDonald's recently; I use McDonald's as a case study for explaining how a supply chain works even under the most challenging environments. I will explain how the leader in burger sales in North America tackles a simple supply and demand problem and then contrast this with how the Ol’ Boys run the USTA and how they deal with the same supply and demand problem. There is a 180-degree difference between competence and ineptitude. Below is the simplest form graph of the supply chain of McDonalds, it actually is quite complex, but I use this simplification to make a point. Let me show you how.

1. McDonald’s supply chain overview McDonald’s outsources 100% of its supply needs. The company grows its products through contracted producers and transports its goods. McDonald’s supply chain promotes growth not only for the restaurants but also for the suppliers.
2. McDonald’s consumers’ demands Most customers expect quick and simple ordering from McDonald’s restaurants. McDonald’s has stuck to hamburgers, cheeseburgers, and French fries on the menu.
3. McDonald’s business strategy for supply and demand Here are some of the main McDonald’s principles:

• McDonald’s model is a win-win relationship between the company, the suppliers, and the customers.
• Instead of looking for suppliers that offer the best price, McDonald’s maintains long-term relationships with existing ones.
• McDonald’s does not micromanage business partners in its business model.

Now compare the simple supply chain of McDonalds to what the USTA’s supply chain looks like:

• USTA’S OL’ Boys supply chain overview USTA outsources 100% of its supply needs. Tennis can only grow if there is a healthy supply chain. This means young coaches, plenty of parents involved, and lots of kids and programs. USTA’s supply chain does not promote growth for anyone, it only burdens the cost to the coaches and parents, and it defies logic.
• USTA’s consumers’ demands Most TENNIS customers expect a good experience, simple competition, and fun. USTA’s Ol Boys have decided to stick to intense competition that keeps customers away and separates tennis-playing people from "the good ones" from "the bad ones" and the ones who "can afford to travel" vs the ones who "cannot afford to travel". This makes no sense, yet the board approves this nonsense year in and year out. Of course, since the CEO has never played, he has no idea what effect this has on the supply chain he can only think of higher revenue, which means higher prices. Simply incorrect!
• USTA’s business strategy for supply and demand Here are some of the main USTA’s principles:
• USTA’s model is a win-lose relationship between the company, the suppliers, and the customers. Expecting the sport to grow under this principle is impossible and ridiculous.
• Instead of looking for suppliers that offer the most kids, supporting clubs, and increasing affordable competition, the USTA maintains long-term relationships with only those suppliers who sing their tunes, also defying logic and common sense. If you think, you cannot be part of the system.
• USTA micromanages all business partners in its business model, by mandating ball colors, tournament structures, software utilization, WTN numbers, etc. Again, this is against any logic that makes sense to the supply chain. If you dare question them, they blacklist you for thinking.
• Notice how McDonald's tries to focus on daily sales and the USTA only focuses on sales of the US Open. This also makes no sense at all as those consumers of the US Open, have nothing to do with the supply chain, they are simply consumers of the 10-day event who don't play, don't buy services, and don't do anything for the sport.

What does USTA’s future look like?

Well, it is dead, as by not focusing on the daily consumer, all that has happened is that the sport has aged, now the coaches are too old, there are not enough kids to coach or to make them compete to have a healthy supply chain that renews itself daily for generations to come.

• With a $620M note obligation, a healthy amount of cash, but no intelligence on how to use it, the $360M cash position is now not nearly enough to have an improved supply chain. Let me remind you that 250s and 500s lose money, that's because there are no fans to support the events.
• With clubs closing in densely populated areas due to real estate values, public parks being transformed into pickleball courts, and young coaches avoiding a full-time tennis career due to a lack of kids, the leadership of the USTA has slowly and methodically killed the sport while ensuring their survival at the expense of the sport. Is the board not responsible for protecting the sport?
• Yet the CEO and board still will pretend to tell you that there is so much growth in tennis that they do not know how to deal with the demand. This is not true.

I hope through a simple graph you were able to understand my point, and that is that the lack of intelligence of the Ol’ boys and the board has positioned tennis where the supply chain for it is no longer viable.

This is why I want the Ol’ boys to resign and leave what can be saved for the sport to those who care about it and act to save jobs, park spaces, and clubs, and attract young coaches for a better future.

What the USTA CEO and board have done is irreversible if they are still in control. I am happy to be proven wrong, but in this case, I am unequivocally certain that they have taken the sport to the brink of its collapse. How do I know, well they lie about participation, I see empty courts daily on my way to work, and on weekends they are also empty unless some 65+ is playing early in the a.m. If you open your eyes the same thing happens wherever you live.

I want them all OUT of tennis, they get the benefits of the sport and pass on the cost and damage to us. This makes no sense to me and it should not make any to you.

I say NO to ineptitude and YES to growing the game.

I can be reached at [email protected]