Strategic Management (MGT703)

Strategic Management (MGT703) MD: Ashiquzzaman ---ID: 1029993
TABLE OF CONTENTS
QUESTION 1: Identify the key economic and business
characteristics of the fast-food industry
1.0Introduction ----------------------------------------------------------------------------- 1
1.1Domestic and International Economic Factors
(Factors of Production, Economies of Scale, Import-Export Earnings, Balance of
Payments and Foreign Exchange)--------------------------------------------------------- 2
1.1.2. Home and Host Countries FDIs:
(Market size and Growth rates, Competitiveness and Increasing Competition,
Customer tastes and preferences, and Infrastructure availability) ------------------ 2
2.0 Appendix-I (Analysis Remarks conclusion) ------------------------------------------ 14
QUESTION 2:
Report on Porter’s ‘Five forces model Competitive
Forces’ in the Fast Food Industry:
1.0 Introduction: ----------------------------------------------------------------------------- 3
2.0The Structural Analysis of Industries: ------------------------------------------------ 3
I). Industry Competitors: ------------------------------------------------------------- 4
II). Buyers: -------------------------------------------------------------------- 5
III) Suppliers: -------------------------------------------------------- 5
IV). Potential Entrants: ------------------------------------- 5
V). Substitutes: ------------------------------------- 6
3.0 Concluding Remarks: ------------------------------------------------------------------- 6
4.0 Appendix-II--------------------------------------------------------------------------------- 15
5.0 Appendix-III--------------------------------------------------------------------------------- 16
QUESTION 3:
Conduct a SWOT Analysis and present your conclusions
on McDonald’s competitive position based on this
analysis.
1.0 Introduction: ----------------------------------------------------------------------------- 6
2.0Competitive Analysis of McDonald (SWOT) -------------------------------- 7
I. Strengths: -------------------------------------------------------------------------- 8
II. Weaknesses: --------------------------------------------------------------- 8
III. Opportunities: -------------------------------------------------- 9
IV. Threats: ------------------------------------------------- 9
3.0 Concluding Remarks:
---------------------------------------------------------------------------------- 9
QUESTION-4 (a) Identify McDonald’s current strategy in terms

of Generic competitive strategy
-----------------------------------------------------------------------------------------------------------------
--- 10
QUESTION-4. (b)
Using marketing and financial information, discuss
whether McDonald’s current strategy working.
Strategic Management (MGT703) 1 MD: Ashiquzzaman ---ID: 1029993
-------------------------------------------------------------------------------------------
------------ 11
1.0 Introduction: ----------------------------------------------------------------------------- 11
2.0 Concluding Remarks: ---------------------------------------------------------- 12
3.0 Appendix -IV-------------------------------- 17
4.0Appendix-V--------------------------- 18
Question -1
Identify the key economic and business characteristics of the fast-food industry.
Answer :
Introduction
The fast-food industry is very much a domestic business as it is an international business
because they represent different sides of the same coin. As in the case of McDonald’s, it
started as a domestic business within the borders of the United States of America in (1955),
extending to become a foreign trade in (1967) with branches in Canada and Puerto Rico, and
further expanded into an international or global business over the next few decades. The rest
is history today. Significantly, however, McDonald’s success is illustrative of major or
critical decisions made that consider key economic and business characteristics of the
business potentials of the fast-food industry.
Among the economic characteristics are the factors of production including the conventional
wisdom of sourcing raw materials of production and distributing finished products at
reasonable and competitive
i. Prices.
ii. Economies of scale.
iii. Realities of foreign and international trade such as balance of payments and foreign
exchange earnings.
And among the business characteristics are market size and growth rate including new
markets and investment opportunities, competitiveness and increasing competition, customer
tastes and preferences including lifestyle changes in food consumption, and extent of
infrastructural availability such as physical, natural, social and managerial or entrepreneurial
infrastructures and continuing quality-assured standards of products and services. These two
groups of fast Food industry -characteristics are summarized as
(1) Domestic and international economic factors.
(2) Home and host countries FDIs (foreign and domestic investments) respectively.
1.1 Domestic and International Economic Factors:

(Factors of Production, Economies of Scale, Import-Export Earnings,
Balance of Payments and Foreign Exchange)
.As a fast –Food industry business developed and grew, so too its consideration for the
economics of sourcing raw materials for production becomes increasingly localised to its
geographical areas of operations to save cost and maximize convenience without
compromising on standards and quality assurance.
1.1.2 Home and Host Countries FDIs:

(Market size and Growth rates, Competitiveness and Increasing Competition,
Customer tastes and preferences, and Infrastructure availability)
The business characteristics, following the growth and expansion of McDonald’s beyond
USA and isolated clusters of non-USA especially North and South American countries and
European countries, have taken more aggressive global market-oriented expansions and multi-
million (even billions) of branding and promotional (including advertising) campaigns in all
shapes, sizes, colours and guises since the beginning of the 21st century. And it looks like the
vast markets and consumer potentials in China, the African continent, the Indian continent
and the ASEAN/Southeast Asia groupings will continue to drive the business motivation and
expansion of McDonald’s and other competitors in the fast-food industry.
Analysi Analysis Remarks conclusion may refer Appendix I. p.14

s

Question 2:
Report on ‘Five Competitive Forces’ in the Fast Food Industry
To: New CEO
From: Md.Assiquzzaman (ASHIQ)
Subject: Porter’s ‘Five Competitive Forces’
1.0Introduction:
Analyse the fast-food industry using Porter’s Five-Forces Model of Competition and prepare
a report with conclusions concerning the overall strength of competitive pressures.
2.0 The Structural Analysis of Industries:
New CEO first used the weapon as a Porter 5 forces determine industry profitability because
they influence the price ,costs, and required investment of firms in an industry the elements of
return on investment Porter (1985) strongly advocated the ‘Five Competitive Forces’ as a way
forward in formulating immediate strategy. In this manner some level of competitive
advantage could be quickly leveraged against the competitors.
[Porter 1990, p.5]
Porter’s model is a heuristic device for analysing market forces affecting trade transactions
and business operations in a competitive environment, both within and outside the boundaries
of home and host countries worldwide. It identifies and describes the following five
elements: industry competitors, buyers, suppliers, potential entrants, and substitutes and
elaborately describe and analysis by figure 1-2 Element of industry Structure refer may
Analysi Appendix-III
s:
[Porter, 1990.p-6]

``
Threat of new
Figure 1-1 The Five competitive forces that Determine Industry Profitability
Source: Porter, 1990, p.5
I). Industry Competitors: Bargaining

Power of
As discussed in details (see chapter 1: “Analysing a Company’s competitive Strategy: The
Core Concept with External Environment, Michael” E., Porter, 1990 pp. 1-10), Porter
Strategic Management (MGT703) 5 suppliers

MD: Ashiquzzaman ---ID: 1029993
suggested that “competitive pressures created by jockeying for better market position,
increased sales and market share, and competitive advantage” constitute the main
considerations in the factor on industry competitors.
II). Buyers:
Competitive pressures are also experienced from buyer bargaining power and buyer-seller
collaboration. . Switching brands is a buyer’s advantage but their disadvantage is low volume
and infrequent consumption as demonstrated by the rivalry between McDonald’s and Burger
King outside homeland USA.
The fact remains that buyers pressures can be both strong and weak bargaining power, given
the violability or sensitivity of a very competitive fast-food industry that responds to changing
consumer lifestyles, preferences and tastes, in which “time-savings” in food consumption
given busy schedules of job commitment can tip the balance for an upward growth projection
for McDonald’s and companies, with innovative products and creative services to boot!
III) Suppliers:
Competitive pressures stemming from supplier bargaining and supplier-seller collaboration is

another serious consideration for the fast-food industry. To maintain market share, and
perhaps to increase market share too, where the top ten players accounted for 62,617 stores in
(2002) for a market size of US $408 billion total consumption in (2003), suppliers must
remain competitive. In this regard, the giant conglomerates continue to challenge and
threaten the suppliers capabilities when their supply of raw materials commodity items.
It is evident that the suppliers’ bargaining power is weak. But established suppliers can have
a competitive advantage if they merge or consider effective forms of partnership that can
safeguard their position in the fast-food industry. Of course, with imminent changes in
lifestyle trends, the market opportunities for new suppliers can be encouraging too.
IV). Potential Entrants:
Unless the character of the fast-food industry changes, such as in alignment with the
developmental healthy lifestyle food consumption preferences and tastes with offers new

business opportunists in the supply and distribution chain management systems, new entrants
into the existing fast-food industry can be very trying. Given the stated US $64 billion
volume of business for the top ten restaurants, the playing field is tight. This suggests that
new entrants must be prepared to accept lower profitability and excess capacity, despite
posing serious threats to established players.
V). Substitutes:
The presences of emerging substitutes in the industry, especially in host countries of

operations, apparently are in the form of localising an international-originated product while
retaining the business infrastructures of fast-food chain operations.
The examples of pita bread substitutes in current McDonald’s and KFC “folders” food are
only product substitutes directed at product differentiation or diversification to maintain their
competitive advantage. But, in the hands of substitute players, and given the possibilities
some local –companies penetrant the country people mind, own flavour strategy to enjoy the
fast food industries profitability
Nevertheless, currently, the threat from substitute players in the established fast-food industry
is still weak. But the potential can be rewarding in the long run for future entrepreneurs in
global business transactions and management.
The fast-food industry may continue to be dominated by the top ten in the industry, many of
whom are US-bred and grown. This does not mean that, given the potentials of non-
American and no-European local-bred and local-grown food industries in host countries
where FDIs in fast food shave dominated the market, the character and presentation of new
fast-food offerings may not change the global business transactions in this industry.
Analysis May refer to Appendix-II, p.15
3. Question:
Conduct a SWOT Analysis and present your conclusions on McDonald’s competitive

position based on this analysis.
1.0 Introduction:

The SWOT Analysis is also a heuristic model to facilitate our understanding and discussions
of the strengths, weaknesses, opportunities and threats which confront the competitive
position of McDonald’s vis-a-vis its rival competitors in the “gold rush” scramble to the
world’s largest China and Africa markets.
Analysi 2.0 Competitive Analysis of McDonald (SWOT)

s

Internal
Factors
(IFAS)
•
•
•
External •
Factors •
(EFAS)
Analysi
s I. Strengths:

McDonald’s is an established business and branded trademark since (1955) when

“simian” for breakfast, “Bolshoi” or “Mac” for lunch became a household name
throughout the Americas and Europe.
• “Golden Arch” is a symbol of quality-assured fast food and its Ronald McDonald a
symbol of fun-friendly greetings from a lovable clown!
• Strengths associated with this ever-green restaurant worldwide include relatively low-
priced,
• Value-for-money product,
• Friendly and fast service with clean and pleasant buildings, an impressive list of
national International franchised holders that continue its proven tradition of
excellence,
• A strong presence in the younger market segment and a loyal following of young
consumers, customer loyalty and premium rewards,
• Increasing merchandise retail sales associated with premiums and gifts to reinforce
product branding and friendly service.
II. Weaknesses:
• Despite its international presence almost everywhere, like some big businesses,
McDonald’s also has its share of failing revenues.
• Weaknesses are seen in slow order processing time that irritate waiting customers,
• Low customer service ranking,
• High employee turnover,
• Detracting from business focus because of increasing dependency on income from
rent, not from core business,
• Inconsistent quality and service despite quality-assured pronouncements, and
launching and writing off too many failed new initiatives.
Significantly, McDonald’s have failed to respond quickly to changing customer needs and
franchise requirements.
III. Opportunities:

• McDonald’s market opportunities are tremendous and widespread because its market
reaches since (1955) have stretched the breadth and length of conceivable and
penetrable countries in different continents throughout the world.
• It is not surprising that McDonald’s have seized available opportunities to increase its
investment in more company-owned and company-operated restaurants where
profitability is predicted and since domestic industry is mature based on careful
consideration
• Fast food not only people taken for full fill the appetitive but also but also use
entertainment so technology adaptation like warless internet plasma TV with MTV
channel.
• Review and revise its standard menu in host countries and improvement innovation
where consumer preferences and tastes may decide the need to localise its original
product lines to accommodate host-country originated “killer” local products in fast-
fast consumption.
IV. Threats:
The threats, perceived or otherwise, to McDonald’s successful global business investments

ironically stems from its home country where it is projected that the market has saturated,
with only a 2 percent earning potential for the company. The growing trend toward healthy
food consumption and more health-inclined population are among the reasons for the home
decline. However, other external threats to its dominant share seem to come from more
aggressive marketing and promotion by its competitors who are eating into the market share
for fast-food industry quite significantly. The Subway sandwich restaurant is a case in point.
. In this regard, McDonald’s is exploring alternatives in its real estate investments and new
investments targets under its new Chairman and CEO, Jim Cantalupo who has just introduced
his “Plan to Win” strategy to arrest McDonald’s declining fortunes. Nevertheless, this
observation does not devalue the need for SWOT analysis to enable use business operators
and entrepreneurs to make better and more effective decisions on their investments.

QUESTION. 4 (A)
Identify McDonald’s current strategy in terms of generic competitive strategy.
The generic competitive strategy currently adopted by McDonald is “Best Cost Provider
Strategy”.
Analysi McDonald CEO analysis Generic Competitive Strategies by according to Mical E. Porter
s (1990)
Source: Porter, 1990, p.12, Figure 1-3 Three Generic Strategies
It is aligned to the new Chairman and CEO’s “Plan to Win” strategy aimed, among others, to
variegate McDonald’ products at a range of price points that most appeal to the sensitivity of
consumers. This strategy also includes extended fresh efforts to concentrate promotion to
entice and lure customers to McDonald’s restaurants with premium family salads and
improved “Happy Meals”.

QUESTION 4. (B)
Using marketing and financial information, discuss whether McDonald’s current
strategy is working.
1.0 Introduction:
The discussion on whether the “Best Cost Provider Strategy” is working is based on the
summary of financial information presented as McDonald’s 11-year Summary refers may
Analysis (3.0`) Appendix IV. In terms of the company-operated sales and franchised and affiliated
revenues, the earnings in 1995 was US $9.795 million, in 2000 was US $14.243 million, and
in 2005 was US $20.460 million. The revenue has more than doubled since 1995. The net
income for the years stated are US $1.427, US $ 1.977, and US $ 2.602 million respectively,
showing an almost 100 percent increase over a ten-year period. On the whole, the percentage
increase is positive.
Viewed from the perspective of Total System wide Restaurants in the same years being
compared, the earnings are US $18.299 million for 1955, US $ 28.707 million in 2002, and
US $31.886 million. There was an increase of US $ 10.408 in span of five years between
1995 and 2000, although the increase in revenue between 2000 and 2005 was only US $3.179.
The Franchised and Affiliated Sales are US $23.051 million in 1955, US $29.714 million in
2000, and US $38.926 million in 2005. There was an increase of US $6.663 million between
1995 and 2000, and US $8.582 million between 2000 and 2005. In both instances, the
increase was positive and the 1st five-year earnings growth at year 2000 was larger than the
2nd five-year earning growth at year 2005.
2005 current ratio of Mc Donald
We know current ratio =Current asset/Current lability

` =$8832/$2920
=3.024
This ratio analysis proved that Mc Donald financial situation is very strong that way (1995)
Prrasuraman, Zenithal & Berry undertaking the risk management
Sourc (https://www.castelle.com/corporate/financial/q1_2005.pdf
e

In perspective, McDonald over the financial ratio, Calculation may refer (4.0) Appendix-V:
2.0 Conclusion:
The overall revenue and income figures look promising, showing a positive trend towards the
year of 2005 – a credit to the Cantaloupe’s “Plan to Win Strategy”. McDonald must
therefore continue to expand its operations overseas where it owns and operate more than half
of its restaurants. And it must continue its franchise businesses as they seem to produce
positive growth figures while controlling costs quite effectively. This “Plan to Win
Strategy” seems to be working in the short run. However, the long-term and continuing
success of McDonald’s in the fast-food and restaurant businesses require more consistency in
management innovations and identification of new strategic development in doing emerging
changes in international business transactions and global market dominance.
LIST OF TEFERANCE MUST BE

. Thompson, A. Jr.,. Strickland III, A., J & E., John, Gamble, 2005, Crafting and Executing
Strategy: The Quest for Competitive Advantage, 14th ed., US: McGraw-Hill.Case13 pp-C-
213-234
Michael, E., Porter 2004, Competitive Advantages creating and sustaining Superior
performance: Free Press New York, London, Toronto, Sydney, Simon & Schuster new York
Prahalad, C.K., 1987, The Free Press New York: The Multinational Mission: Balancing
Local Demands and Global Mission, USA
Besanka, D. , Dranove, D., &. Shanley, M., 1996, Economics of Strategy, New York: John
Wiley & Sons.
Hamel, G., & Prahalad, C.K., 1994, ‘Competing for the Future, Boston’, Harvard Business
school, Review Press.
Barney, J.B. 1991, ‘Firm Resources and Sustained Competitive Advantage’, Journal of
Management vol.17 pp. 99-120.
Birkinshaw, J. Morrison, A. & Hulland, J. 1995, ‘Structural and Competitive Determinants of
a Global Integration Strategy’, Strategic Management Journal Vol.16 pp. 637 – 55.
.Porter, M.E., 1980, Competitive Strategy, New York: Free Press.
Porter, M.E., 2000, “What is Strategy?” Harvard Business Review, On-point Enhanced
article, February p.1
http://mcd.mobular.net/mcd/90/13/35/ (Viewed 28.Novwmber from 2006-11-29)

Reich, P.J. & Buckley, Hasai, N. 2004, ‘A Global System View of Firm Boundaries’, Journal
of International Business Studies, January, pp. 33-50.
Copeland, T., Koller, T., & J. Murrin, 2000, Valuation: Measuring and Managing the Value
of Companies, New York: John Wiley & Sons.
https://www.castelle.com/corporate/financial/q1_2005.pdf (Viewed Mac- Donald’s main
wave Page 27, November2006-11-29)
Summers, J.,& Smith, B.2002, Communication Skills Hand Book , published by Markono
,Singapore

Analysi Appendix –I
s
Analysis Remarks of fast food industry in sense of Mc Donald’s:
According to The Nation’s Restaurant News in Thompson, Jr., Strickland III, and Gamble,
(2005), Crafting and Executing Strategy: The Quest for Competitive Advantage, 14th ed., the
fast-food industry in our case study has an estimated market size for consumer food service of
US S408 billion, of which the total sales of 30 sandwich chains accounted for about US $64
billion. The top of the list includes McDonald’s in 120 countries, Burger King in 58
countries, Wendy’s in 22 countries and Harder’s in 15 countries. Jointly, they accounted for
61% share of the US $64 billion turnover of the said 30 sandwich chain of fast food
restaurants.. The predicted 2 percent growth for the market leaders has pushed them to look
beyond their home country operations, especially when Euro monitor had forecasted a growth
of US $200 billion between the years of 2002 and 2006 for the food service market. And
McDonald’s, in the year 2002, had expanded its presence to account for more than half of the
total international market share of fast-food restaurants, and it is still growing despite the
presence of old and new competitors, and the increasing competitiveness of consumer choices
and changing tastes.
In the final analysis, when the two groups of economic and business characteristics are
combined, inevitably, the future of the fast-food industry is subject to the influences of the
business cycle, business mergers and acquisitions, trade barriers and national and regional
protective FDI policies regulated by the World Trade Congress and prevailing international
laws and regulations by other international bodies.
And, in concert, in achieving economies of scale with increasing demands, supply and
distribution, McDonald’s like other compositing brands in the fast-food industry also
considered the impact of balance of payments and foreign exchange savings, apart from
payments made for import-export transactions at prevailing localised exchange rates. Thus, in
the world of global business today, domestic and international economic factors are still
important considerations even though they may pale against the dominating business factors
of expanding market potentials and changing consumer lifestyle preferences and tastes with
vital contribute of employers in the globally .

Appendix –II
Analysis another part:.

Most importantly, over the years, McDonald’s has become a world-class and the largest
burger chain with more than 30,000 restaurants throughout the world, with an estimate of 46
million customers a day and turnover sales of US $41 billion.
Its strong international growth and overseas expansion, through franchises which negates the
need for huge capital investment and risks, is supported by a large advertising and
promotional budget directed at maintaining competitive edge and enticing new consumers
while retaining customer loyalty. Also, McDonald’s has diversified its business interests into
real estate holdings, retails merchandise sales, and restaurant operations in order to achieve
variety of incomes and improve revenue earnings

``
Appendix –III
Entry Barriers
Economic of scale
Proprietary products difference
Brand identity
Switching cost
Capital requirement
Access to distribution
T h r e a t noefw
Absolute cost advantages
Proprietary learning curve
Access to necessary input
Proprietary low cost product design
Government policy
Expected retaliation
Figure 1-2 Elements of industry Structure
[Source: Porter, 2004, p.7]
B a r g a in in g
Strategic Management (MGT703)
Pow er of
18 MD: Ashiquzzaman ---ID: 1029993
s u p p lie r s
` 3.0Appendix -IV

3.0 Appendix -IV
4.0 Appendix-V
Financial Ratio Calculations For Mc Donald's
Year type Of Ratio Formula Calculation Result

Ratio
Profitability Operating Profit Profit

before
taxes
interest
Ratios Margin Sales
1998 2761.90 22.24%

12,421.40
1999 3,319.60 25.00%
13,259.30
2000 3330.00 23.38%
14,243.00
2001 2,697.00 18.14%
14,870.00
2002 2113.00 13.72%
15,406.00
2003 2,464.70 19.58%
(3 12,585.10
quarter
s)
Net Profit Margin Profit after

taxes
interest
Sales
1998 1550.10 12.48%

12,421.40
1999 1,947.90 14.69%
13,259.30
2000 1977.00 13.88%
14,243.00
2001 1,637.00 11.00%
14,870.00
2002 893.00 5.80%
15,406.00
2003 1,345.70 10.69%
(3 12,585.10
quarter

s)
Return On Profit after taxes

interest
Total Assets Total Assets
1998 1550.10 7.83%

19,784.40
1999 1,947.90 9.28%
20,983.20
2000 1977.00 9.12%
21,683.50
2001 1,637.00 7.26%
22,534.50
2002 893.00 3.73%
23,970.50
2003 1,345.70 5.33%
(3 quarters) 25,234.10
Return On Profit after

taxes&interest
Shareholders Total
Shareholders
Equity
Equity
1998 1550.10 16.38%

9,464.70
1999 1,947.90 20.21%
9,639.10
2000 1977.00 21.48%
9,204.40
2001 1,637.00 17.25%
9,488.40
2002 893.00 8.69%
10,280.90
2003 1,345.70 11.55%
(3 quarters) 11,648.60

Liquidity Current Ratio Current Assets

Ratios
Current Liabilities
1998 1309.40 0.52:1
2,497.10
1999 1,572.30 0.48:1
3,274.30
2000 1662.40 0.70:1
2,360.90
2001 1,819.30 0.80:1
2,248.30
2002 1715.40 0.70:1
2,422.30
2003 1,938.50 0.73:1
(3 2,633.40
quarters)
Leverage Debt To Total Debt

Ratios
Asset Ratio Total Assets
1998 6188.60 0.31:1

19,784.40
1999 5,632.40 0.26:1
20,983.20
2000 7843.90 0.36:1
21,683.50
2001 8,555.50 0.38:1
22,534.50
2002 9703.60 0.40:1
23,970.50
2003 9,291.70 0.36:1
(3 25,234.10
quarters)

Debt To Total Debt

Equity Ratio Total Shareholders Equity
1998 6188.60 0.65:1

9,464.70
1999 5,632.40 0.58:1
9,639.10
2000 7843.90 0.85:1
9,204.40
2001 8,555.50 0.90:1
9,488.40
2002 9703.60 0.94:1
10,280.90
2003 9,291.70 0.80:1
(3 11,648.60
quarters)
Marketing Operating Cost Total Operating Cost

Ratios Ratio Total Revenue
1998 9659.50 77.76%

12,421.40
1999 9,939.70 74.96%
13,259.30
2000 10913.00 76.60%
14,243.00
2001 12,173.00 81.86%
14,870.00
2002 13,293.00 85.73%
15,506.00
2003 10,120.40 80.41%
(3 12,585.10
quarters)

Net Income To Net Income

Revenue Total revenue
Ratio
1998 1550.10 12.48%

12,421.40
1999 1,947.90 14.69%
13,259.30
2000 1977.00 13.88%
14,243.00
2001 1,637.00 11.00%
14,870.00
2002 $893.00 5.76%
15,506.00
2003 1,345.70 10.69%
(3 12,585.10
quarters)
Company Co.Operated Rest.Exp

Operated Rest. Co.Operated Rest.Rev.
Expense To
Revenue
Ratio
1998 5261.60 59.15%

8,894.90
1999 7,829.60 82.31%
9,512.50
2000 8750.00 83.60%
10,467.00
2001 9,454.00 85.63%
11,041.00
2002 9907.00 86.15%
11,500.00
2003 8,094.00 64.31%
(3 12,585.10
quarters)

Franchised Rest. Fran.Rest.Exp.

Expense To Fran.Rest.Rev.
Revenue
Ratio
1998 678.00 19.23%

3,526.50
1999 737.70 19.69%
3,746.80
2000 772.00 22.40%
3,776.00
2001 800.00 20.89%
3,829.00
2002 840.00 21.51%
3,906.00
2003 690.30 21.65%
(3 3,188.10
quarters)

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Strategic Management (MGT703) MD: Ashiquzzaman ---ID: 1029993

QUESTION-4 (a) Identify McDonald’s current strategy in terms

1.1 Domestic and International Economic Factors:

1.1.2 Home and Host Countries FDIs:

Analysi Analysis Remarks conclusion may refer Appendix I. p.14

Strategic Management (MGT703) 3 MD: Ashiquzzaman ---ID: 1029993

Strategic Management (MGT703) 4 MD: Ashiquzzaman ---ID: 1029993

Source: Porter, 1990, p.5

I). Industry Competitors: Bargaining

Strategic Management (MGT703) 5 suppliers

Competitive pressures stemming from supplier bargaining and supplier-seller collaboration is

IV). Potential Entrants:

Strategic Management (MGT703) 6 MD: Ashiquzzaman ---ID: 1029993

The presences of emerging substitutes in the industry, especially in host countries of

3.0 Concluding Remarks:

Analysis May refer to Appendix-II, p.15

Conduct a SWOT Analysis and present your conclusions on McDonald’s competitive

Strategic Management (MGT703) 7 MD: Ashiquzzaman ---ID: 1029993

Analysi 2.0 Competitive Analysis of McDonald (SWOT)

Strategic Management (MGT703) 8 MD: Ashiquzzaman ---ID: 1029993

Strategic Management (MGT703) 9 MD: Ashiquzzaman ---ID: 1029993

McDonald’s is an established business and branded trademark since (1955) when

Strategic Management (MGT703) 10 MD: Ashiquzzaman ---ID: 1029993

The threats, perceived or otherwise, to McDonald’s successful global business investments

2.0 Concluding Remarks:

Strategic Management (MGT703) 11 MD: Ashiquzzaman ---ID: 1029993

Identify McDonald’s current strategy in terms of generic competitive strategy.

Source: Porter, 1990, p.12, Figure 1-3 Three Generic Strategies

Strategic Management (MGT703) 12 MD: Ashiquzzaman ---ID: 1029993

2005 current ratio of Mc Donald

We know current ratio =Current asset/Current lability

Strategic Management (MGT703) 13 MD: Ashiquzzaman ---ID: 1029993

LIST OF TEFERANCE MUST BE

Strategic Management (MGT703) 14 MD: Ashiquzzaman ---ID: 1029993

Local Demands and Global Mission, USA

Wiley & Sons.

school, Review Press.

Management vol.17 pp. 99-120.

Birkinshaw, J. Morrison, A. & Hulland, J. 1995, ‘Structural and Competitive Determinants of

.Porter, M.E., 1980, Competitive Strategy, New York: Free Press.

article, February p.1

http://mcd.mobular.net/mcd/90/13/35/ (Viewed 28.Novwmber from 2006-11-29)

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Analysis another part:.

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Year type Of Ratio Formula Calculation Result

Profitability Operating Profit Profit

1998 2761.90 22.24%

Net Profit Margin Profit after

1998 1550.10 12.48%

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Return On Profit after taxes

1998 1550.10 7.83%

Return On Profit after

1998 1550.10 16.38%

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Liquidity Current Ratio Current Assets

Leverage Debt To Total Debt

1998 6188.60 0.31:1

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