Strategic Management

McDonald’s

MISHAAL AFZAAL (M20MBA099)

SAHER FATIMA (M20MBA148)
ZAINAB SHAFIQ (M20MBA127)
ZAINAB FAROOQ (M20MBA121)
MAHNOOR (M20MBA137)
 Stages of Strategic Management
Strategy Formulation
vision and mission, external opportunities and threats
internal strengths and weaknesses, long-term objectives

Strategy Implementation
Annual objectives, devise policies, allocate resources

Strategy evaluation
Reviewing external and internal factors
Measuring performance, Taking corrective actions
 Adapting to Change
•Effectively respond to shifting consumer demographics
• Consumer preferences in the “informal eating out” segment
• Reach customers effectively and efficiently
•Improving service model
• Strengthening relationships with customers ;loyalty initiative, mobile ordering & payment
systems.
• Refine delivery initiatives
• Growing awareness & trial to enhance drive-thru technologies
 Competitive Advantage
• Resource-Based View (RBV)
• Alignment among the Company, its franchisees and suppliers
• McDonald’s is able to identify, implement and scale ideas
• System alignment & geographic diversification to deliver consistent
• Customers as an integral part of their communities
 Long-Term Objectives
• Serve good food in friendly & fun environment
• Good returns to its shareholders
• Food of high standard, quick service & value money
• Investments in technology and modernization
• EOTF (which focuses on restaurant modernization)
• Digital engagement and delivery
• Improving service model & strengthening relationships with customers
 Strategies
• CUSTOMER-CENTRIC GROWTH STRATEGY
• Retaining existing customers
• Regaining customers who visit less often
• Converting casual to committed customers
• Experience of the Future
• Velocity growth plan
• Digital
• Delivery
 Annual Objectives
• Outbreak of COVID-19

• Difficult times like these remind us how strong, resilient and purposeful we are
They made five principles that guides their approach
1. We’re all in this together.
2. Think and act with a long-term mindset.
3. Be transparent with each other and our stakeholders.
4. Lead by example.
5. Stay true to our purpose.
The Strategic-Management Model
 VISION STATEMENT

" McDonald's vision is to be the world's best quick service restaurant experience.
Being the best means providing outstanding quality, service, cleanliness, &
value, so that we make every customer in every restaurant smile."
 WORLDWIDE STRATEGIES
•BE THE BEST EMPLOYER:
• Be the best employer for their people in each community around the world.
•DELIVER OPERATIONAL EXCELLENCE:
• Deliver operational excellence to their customers in each of their restaurants.
•ACHIEVE ENDURING PROFITABLE GROWTH:
• Achieve enduring profitable growth by expanding the brand and leveraging
the strengths of the McDonald's system through innvation and technology.
 MISSION STATEMENT
• Our customers' favorite place and way to eat and drink .
• Our worldwide operations are aligned around a global strategy called
the Plan to Win, which center on an exceptional customer experience – People,
Products, Place, Price and Promotion.
• We are committed to continuously improving our operations and enhancing our
customers' experience.
 COMPONENTS OF MISSION
STATEMENT
CUSTOMERS:

“Entertaining 1.6million customers everyday ”

PRODUCT OR SERVICES:

• Beverage: Cold-Coffee, ice tea, hot serves, McShakes

• Non-Vegetarian Menu: Filet-O-Fish, , Chicken McCurry Pan, McChicken.

• Vegetarian Menu: Crispy Chinese, McALOOtikki, Mc Veggie, Pizza McPuff, Paneer salsa

• Service: Having more than 15,000 Wi-Fi enabled restaurants.

• TECHNOLOGY:
McDonalds is technologically very sound as they have mentioned: “…… advanced operational
systems….”
• MARKETS:
McDonalds have mentioned about the markets in which they operate in words: “entertaining
1.6million customers everyday in 121 countries”
• CONCERN FOR SURVIVAL, GROWTH AND PROFITABILITY:
“We plan to expand our leadership position through great testing food, superior services,
everyday value and convenience.”
• PHILOSOPHY:
“We want to be the best employer for our people in each community around the world.”
• CONCERN FOR EMPLOYEES:
McDonalds is concerned about their employees for better management of the organization.
They have mentioned: “We want to be the best employer for our people.
 External Analysis
•Pestel analysis of Mcdonald's shows growth opportunities and threat's based on
external factors in fast food industry.
•These external Factors are
1. Political
2. Economical
3. Sociocultural
4. Technological
5. Environmental
6. Legal
 Political
•Political external factor is a threat for Mcdonald's because it puts a lot of
pressure on McDonald’s regarding criticism on the affects of its products on
consumers’ health.
•Nonetheless, this same external factor creates an opportunity for the company
to improve its products.
•Increasing international trade agreements is an opportunity for Mcdonald's
 Economical
•Economic external factors mainly provide opportunities for business growth.
• The global economy, regional economies, and local economies influence
McDonald’s industry environment through the following economic external
factors:
•Slow but stable growth of developed countries (opportunity)
•Rapid growth of developing countries (opportunity)
 SocioCultural
•Rising disposable incomes (opportunity)
•Busy lifestyles in urban environments (opportunity)
•Increasing cultural diversity (threat and opportunity)
•Healthy lifestyle trend (threat & opportunity)
 Technological
•McDonald’s success depends on the latest and updated technology.The
company needs to address the following technological external factors:
•Moderate R&D activity in the industry (opportunity)
•Increasing sales through mobile devices (opportunity)
•Use of Mobile application for ordering
 Environmental
•McDonald’s can improve its environmental programs and sustainability to
strengthen its brand and business performance.
•Use environmental friendly packaging for their products.
•Increasing emphasis on sustainable business strategies is an opportunity.
•Changes in climate conditions in some regions is a threat for them.
•Lower use of paper and paper products or recycling is an opportunity for them
 Legal
• Legal factor is a threat for McDonald’s .
• Some of the legal factors are:
• Increasing health regulations in workplaces and schools (threat)
• Increasing animal welfare regulations (threat & opportunity)
• Rising legal minimum wages (threat)
• Health regulations impose limits on the accessibility and availability of fast food
in some workplaces and schools. This legal trend threatens McDonald’s revenues
from these market segments.
 Porter's 5 forces model
•Entry of new competitors
•Rivalry among the competing firm
•Bargaining power of supplier
•Bargaining power of buyer
•Threat for substitute
 Potential entry of new competitors

• The moderate threat of new entry:

• Low switching costs
• Highly variable capital cost
• High cost of brand development
 Rivalry among the competing firm
•The strong force of competitive rivalry is based on external factors:
• High number of firms
• High aggressiveness of firms
• Low switching costs
 Bargaining power of buyer
• Focus on demands of consumers & how their decisions impact businesses.
• Following are the external factors
• Low switching cost
• Large number of providers
• High availability of substitutes
 Bargaining power of suppliers
•Availability of raw materials.
•Bargaining power of suppliers is based on the following external factors:
• Large number of suppliers
• Low forward vertical integration of suppliers
• High overall supply
 Threat of substitute
•The potential effects of substitutes on firm growth.
• Following external factors make the threat of substitution a strong force:
•High substitute availability
•Low switching costs
•High performance-to-cost ratio of substitutes
Internal Analysis
Strength
•Largest fast food restaurant in the world
• Locally adapted food menu
•Children targeting
•Partnership with best brands
•Strong real estate portfolio
•Brand Reconciliation valued at 40$ billion
• Strong global presence
Weakness
•Negative publicity
• Unhealthy food menu
•High employees turnover
• Labor turnover
•Market saturation
•Product innovation
•Customer service
•Advertising target young children