Table of Contents

Topics

Introduction History analysis Vision, Mission, Value The Five Forces Framework PESTEL Framework External Audit CPM-Competitive Profile Matrix External Factor Evaluation (EFE) Matrix Financial Ratio Analysis Internal Audit Internal Factor Evaluation (IFE) Matrix SWOT Matrix SPACE Matrix Grand Strategy Matrix The Boston Consulting Group (BCG) Matrix The Internal-External (IE) Matrix The Quantitative Strategic Planning Matrix (QSPM) Recommendations

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Introduction:

" Speedee was eventually replaced with Ronald McDonald in 1963.000 restaurants in 119 countries worldwide. The corporations' revenues come from the rent.1 Historical Analysis:  The business began in 1940.wikipedia. and ice cream. an affiliate. as well as sales in company-operated restaurants. McDonald’s sells various fast food items and soft drinks including.  Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant.  The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee. and 9% growth in operating income to $3. serving nearly 47 million customers daily through more than 31. chicken. and eliminating hard plastic chairs and tables. Each McDonald's restaurant is operated by a franchisee. Many McDonald's restaurants have included a playground for children and advertising geared toward children. with a particular emphasis on comfort: introducing lounge areas and fireplaces. royalties and fees paid by the franchisees. California. burgers.org.8 billion.9 billion. and some have been redesigned in a more 'natural' style. salads. McDonald's revenues grew 27% over the three years ending in 2007 to $22. fries.McDonald's Corporation is the world's largest chain of fast food restaurants. 1 http://en. with a restaurant opened by brothers Dick and Mac McDonald in San Bernardino. or the corporation itself. 2 .

S. in Des Plaines. 1955 . 2 http://en. The value of food product makes every customer is smile. Have a cleanliness environment when customer enjoys their meal. The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc.". services to customer. and improve our operations to provide the most delicious fast food that meet our customers' expectations.2  Vision To be the best and leading fast food provider around the globe Mission McDonald's brand mission is to be our customers' favorite place and way to eat. Provide good quality. With the expansion of McDonald's into many international markets. 3 . corporate ethics and consumer responsibility. Illinois on April 15.org.wikipedia. & V. Its prominence has also made it a frequent topic of public debates about obesity. Kroc later purchased the McDonald brothers' equity in the company and led its worldwide expansion and the company became listed on the public stock markets in 1965. the company has become a symbol of globalization and the spread of the American way of life.C. the ninth McDonald's restaurant overall. Values Our values summarized in "Q.

YUM. new entrants find that they are faced with price competition from existing chain restaurants. Bargaining Power of Buyers Low bargaining power of buyers. Bargaining power of suppliers 4 .The Five Forces Framework The Threat of Entrants Large established companies with strong brand identities such as McDonald’s BKC. and WEN do make it more difficult to enter and succeed within the marketplace.

• Market leader. coffee shops. local. retailers of food products (restaurants. and supermarkets). regional. the main rivals are BKC. quick service. and WEN. Economic: • McDonald’s has the tendency to experience hardship in instances where the economy of the respective states is hit by inflation and changes in the exchange rates.Bargaining power of suppliers within the fast food industry would be relatively small. unless the main ingredient of the product is not readily available. • Very high target market. Competitive Rivalry The strength of competition in this industry is very high. Threat of Substitutes This could range from a competitive fast food restaurant to family restaurant to a home cooked meal. national. PESTEL Framework: Political: • The international operations of McDonald’s are highly influenced by the individual state policies enforced by each government. • Low cost and more incomes. YUM. pizza. 5 . • The rate at which the economy of that particular state grows determines the purchasing power of the consumers in that country. They compete with international.

• Legal: • • Legislation for product. • Local manufacture using foreign supplies. 6 . Environmental: • Quality packing. • Increase employments. • Quality standards. Sustained logo.Social: Working within many social groups. Technological • Advanced technology development.

10 0.20 7 .10 4 3 0.15 4 0.40 0. Health professionals and consumer activists accuse McDonald's of contributing to the country’s health issue of high cholesterol. Worldwide deregulation.24 3 4 0.30 0. 2. 5. Anti-American sentiments. McDonald’s competitors threatened market share of the company both internationally and domestically.60 0.45 3 0. 6.20 0. heart attacks. 3.40 0. 2. expansion in other countries (especially in China & India). Growth of the fastfood industry.30 Burger King Rating Weight ed Score 3 0.45 2 0. Threats 1. CPM-Competitive Profile Matrix Critical Success Factors Price Financial Position Consumer Loyalty Advertising McDonald's Weight Rating Weight ed Score 0.08 4 0. 4. Diversification and acquisition of other quickservice restaurants. 3. Low cost menu that will attract the customers. The relationship between corporate level McDonald's and its franchise dealers. Global recession and fluctuating foreign currencies.32 0. 4. Fast-food chain industry is expected to struggle to meet the expectations of the customers towards health and environmental issues. and obesity. 5.40 Wendy's Rating Weight ed Score 3 0.16 2 2 0. Freebies and 1. discounts. diabetes. 6.30 Yum Brands Rating Weight ed Score 3 0.External Audit: Opportunities Growing health trends among consumers Globalization.45 3 0.32 3 3 0.

40 0.45 0.40 0.30 3.21 0.40 0.40 0.03 4 3 3 3 3 0.Product Quality Innovation Market Share Manageme nt Global Expansion Total 0.20 2 2 2 3 1 0.20 0.07 External Factor Evaluation (EFE) Matrix Key External Factors Opportunities Growing health trends among consumers Weight 0.75 3 3 2 3 2 0.07 0.10 0.30 0.08 Rating 3 Weighted Score 0.20 0.15 0.45 0.45 3.60 3.20 0.15 2.21 0.28 0.30 0.24 8 .45 0.21 0.15 1 4 3 4 4 4 0.10 0.

and obesity.04 .12 . Diversification and acquisition of other quick-service restaurants. Total 0. Worldwide deregulation Low cost menu that will attract the customers.00 2.16 0.10 3 0.48 0.04 . McDonald’s competitors threatened market share of the company both internationally and domestically.48 .10 .08 0.12 .27 0.04 .Globalization.85 Internal Audit Strength Weakness 9 .12 0. Growth of the fast-food industry.08 1. diabetes.14 .08 Threats Health professionals and consumer activists accuse McDonald's of contributing to the country’s health issue of high cholesterol.08 4 3 3 2 2 1 0. Anti-American sentiments.30 0.07 .04 4 2 3 2 0.30 0. Global recession and fluctuating foreign currencies.09 3 0.12 . Fast-food chain industry is expected to struggle to meet the expectations of the customers towards health and environmental issues. expansion in other countries (especially in China & India).08 . 0. heart attacks. Freebies and discounts. The relationship between corporate level McDonald's and its franchise dealers.

Strong MCD's performance in the global marketplace. Introduction of new products. Customer focus (centric). price and promotion. High Staff Turnover image and reputation. 5. Strong global presence. 4. Unhealthy food image. Legal actions related to health issues. 6. 8. McDonalds Plan to win focuses on people. use of trans fat & beef oil. 1. Internal Factor Evaluation (IFE) Matrix 10 . 2. Ignoring breakfast from the menu. 2. 5. performance and position. 3. 9. Customer losses due to 4. 7. Uses HCFC-22 to make polystyrene that is contributing to ozone depletion. Strong brand name. 6.1. Strong financial fierce competition. place. Large market share. products. Specialized training for managers known as the Hamburger University. including Top management 3.

04 0.08 0.40 0. Specialized training for managers known as the Hamburger University.32 0. Large market share. Weaknesses Unhealthy food image.12 0.04 0. Legal actions related to health issues.06 0.08 0.04 Rating 4 4 3 3 Weighted Score 0.32 0.00 1 0.10 0.Key Internal Factors Strengths Strong brand name.04 0. McDonald's uses HCFC-22 to make polystyrene that is contributing to ozone depletion.08 0.24 0.08 0. place.04 1 1 1 2 2 0.16 SWOT Matrix 11 . Ignoring breakfast from the menu.04 0. Introduction of new products.06 1. products.12 0. McDonalds Plan to Win focuses on people. image and reputation.10 0.08 0. use of trans fat & beef oil.24 0.48 0.06 0. Strong global presence. price and promotion Strong financial performance and position.12 0.08 4 4 4 4 4 0. Strong performance in the global marketplace. Customer focus (centric). High Staff Turnover including Top management Customer losses due to fierce competition. Total Weight 0.48 0.04 0.12 0.06 3.

use of trans fat & beef oil. Fast-food chain industry is expected to S-O Strategies 1. T3). Introduction of new products. Growth of the fastfood industry. O6). 2. 4. 8. O7). price and promotion. Worldwide deregulation. heart attacks. 7. Low cost menu that will attract the customers. Ignoring breakfast from the menu.SPACE Matrix Strengths 1. O1). 6. 5. Strong performance in the global marketplace. Expansion in market share by more investments in Asia (S2. Diversification and acquisition of other quickservice restaurants. 2. 9. Freebies and discounts. Strong financial performance and position. The relationship between corporate level McDonald's and its franchise dealers. T6) 1. Globalization. 6. Focus on Plan to win to attract customers and expansion in other countries (S5. Strong brand name. 5. O6. 2. T2). Growing health trends among consumers. and diabetes. Strong global presence. More control on franchise dealers to maintain McDonald's reputation and quality (S1. 3. Large market share. 5. Uses HCFC-22 to make polystyrene that is contributing to ozone depletion. 4. 3. Customer losses due to fierce competition. Anti-American sentiments. W-T Strategies Applying 0 grams Trans fat in all worldwide McDonald's (W1. W-O Strategies Minimize customers losses by provide low cost menu and discounts (W3. Customer focus (centric). O2). High Staff Turnover including Top management. image and reputation. McDonalds Plan to Win focuses on people. 4. 2. Unhealthy food image. 2. 2. McDonald’s competitors threatened market share of the company both internationally and domestically. Legal actions related to health issues. place. O2. Global recession and fluctuating foreign currencies. 12 . 1. 6. Specialized training for managers known as the Hamburger University. 5. S-T Strategies 1. Threats 1. 4. W4. Weaknesses 1. 2. 6. Health professionals and consumer activists accuse it of contributing to the country’s health issue of high cholesterol. Transfer from HCFC-22 to HFC (hydrofluorocarbon)-free (W5. expansion in other countries (especially in China & India). products. Opportunities 1. 7. 3. Provide new product and keep innovation (S7. 3.

17) FS Conservative Aggressive C A IS Defensive ES Competitive Grand Strategy Matrix 13 .Financial Strength Return on investment Leverage Net Income EPS ROE Cash Flow Average Competitive Advantage Market share Product Quality Customer Loyalty Control over other parties Rating 4 4 6 5 5 4 4. 2.00 -1.33 3.00 -2.08.17 Rating 5 5 4 4 5 3 4.25 Directional vector point is :( 3.08 Average -1.00 Environmental Stability Rate of inflation Demand Changes Price Elasticity of demand Competitive pressure Barriers to entry new markets Risk involved in business Average Y-axis Industry Strength Growth potential Financial stability Ease of entry new markets Resources utilization Profit potential Demand variability Average X-axis Rating -3 -3 -1 -3 -3 -2 -2.67 Rating -1.5 2.00 -1.

Rapid Market Growth Quadrant II Quadrant I Weak Competitive Position Strong Competitive Position Quadrant III Quadrant IV Slow Market Growth The Boston Consulting Group (BCG) Matrix Relative Market Share Position MCD Industry Sales Growth Rate Stars Question Marks Cash Cows Dogs The Internal-External (IE) Matrix The IFE Total Weighted Score 14 .

99 McDonald's VII VIII IX Low 1.0 to 4.99 II Weak 1.99 IV V VI The EFE Total Medium Weighted Score 2.0 I Average 2.99 The Quantitative Strategic Planning Matrix (QSPM) 15 .0 to 3.0 to 1.99 Strong 3.0 to 2.1.0 to 2.0 to III High 3.

06 0.20 0.10 0.12 0.12 0.12 0.Strategy 1 Expand further in Asia by adding 500 restaurants Strategy 2 Applying 0 grams Trans fat in all worldwide McDonald's restaurants Key Internal Factors Strengths Strong brand name.32 0.00 1 3 1 - 0.08 0.08 0.04 0.10 0.04 0.32 0.24 AS 4 2 2 4 4 4 1 TAS 0.40 16 .24 0. image and reputation Large market share Strong global presence Specialized training for managers known as the Hamburger University McDonalds Plan to Win focuses on people.08 0.06 0.08 0.04 0.40 0. products.04 0.08 AS 4 4 4 4 4 1 3 TAS 0.48 0.04 2.08 0.48 0.12 0. price and promotion Strong financial performance and position Introduction of new products Customer focus (centric) Strong performance in the global marketplace Weaknesses Unhealthy food image High Staff Turnover including Top management Customer losses due to fierce competition Legal actions related to health issues.04 1.48 0.04 0.06 0.48 0. place.32 0. use of trans fat & beef oil Uses HCFC-22 to make polystyrene that is contributing to ozone depletion SUBTOTAL Weight 0.16 2.34 4 1 4 - 0.

01 4.48 0.04 - 0.09 0.09 0. and obesity The relationship between corporate level McDonald's and its franchise dealers McDonald’s competitors threatened market share of the company both internationally and domestically Anti-American sentiments Global recession and fluctuating foreign currencies Fast-food chain industry is expected to struggle to meet the expectations of the customers towards health and environmental issues SUBTOTAL SUM TOTAL ATTRACTIVENESS SCORE Weig ht 0.40 0.16 1.10 1 0.48 0.32 0.44 2.40 0. expansion in other countries (especially in China & India) Diversification and acquisition of other quick-service restaurants Growth of the fast-food industry Worldwide deregulation Low cost menu that will attract the customers Freebies and discounts Threats Health professionals and consumer activists accuse McDonald's of contributing to the country’s health issue of high cholesterol.04 0.12 0.08 0.Strategy 1 Expand further in Asia by adding 500 restaurants Strategy 2 Applying 0 grams Trans fat in all worldwide McDonald's restaurants Key External Factors Opportunities Growing health trends among consumers Globalization.12 0.41 17 .07 0.36 0.40 0.10 4 0.16 - 4 1 4 1 - 0.48 0. heart attacks.04 4 4 1 0.10 0.08 0.04 0.04 0. diabetes.00 2.10 4.08 AS TAS AS TAS 1 4 4 4 - 0.12 0.08 0.04 1 4 4 0.

18 .S.ca 4.mcdonalds. Environmental Protection Agency 1. 3.mcdonalds.moneycentral.Recommendations Expand further into Asia markets over a 2-year period by adding 500 restaurants per year at a cost of $4 billion annually.com www. Exploring Corporate Strategy text & cases 8th edition 6.com www. Strategic Management concepts and cases by Fred David 12 edition 5. 2. and applying 0 grams Trans fat in all worldwide McDonald's restaurants.msn. U. References www.

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