McDonald’s Strategic Evaluation
Wajahat Hussain
Roll No. 20
MBA-BBA (marketing)
19/03/12
History of McDonald
The business began in 1940, with a restaurant opened by brothers Richard and Maurice
McDonald in San Bernardino, California. Their introduction of the "Speedee Service
System" in 1948 furthered the principles of the modern fast-food restaurant that
the White Castle hamburger chain had already put into practice more than two decades
earlier. 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." Speedee was eventually
replaced with Ronald McDonald by 1967 when the company first filed a U.S. trademark
on a clown shaped man having puffed out costume legs.
McDonald's first filed for a U.S. trademark on the name "McDonald's" on May 4, 1961,
with the description "Drive-In Restaurant Services," which continues to be renewed
through the end of December 2009. In the same year, on September 13, 1961, the
company filed a logo trademark on an overlapping, double arched "M" symbol. The
overlapping double arched "M" symbol logo was temporarily disfavored by September
6, 1962, when a trademark was filed for a single arch, shaped over many of the early
McDonald's restaurants in the early years. Although the "Golden Arches" appeared in
various forms, the present form as a letter "M" did not appear until November 18, 1968,
when the company applied for a U.S. trademark.
McDonald's corporate logo used from 1968 to 2006. It still exists at some restaurants.
The present corporation dates its founding to the opening of a franchised restaurant
by Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth McDonald's restaurant
overall. 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. Kroc was also noted for aggressive business practices, compelling the McDonald
brothers to leave the fast food industry. The McDonald brothers and Kroc feuded over
control of the business, as documented in both Kroc's autobiography and in the
McDonald brothers' autobiography. The site of the McDonald brothers' original
restaurant is now a monument. With the expansion of McDonald's into many
international markets, the company has become a symbol of globalization and the
spread of the American way of life. Its prominence has also made it a frequent topic of
public debates about obesity, corporate ethics and consumer responsibility.
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, and
improve our operations to provide the most delicious fast food that meet our customers'
expectations.
Objectives of McDonald
Profitability
Quality Service
Customer Satisfaction
Reputable Image
Community Outreach
Vision Proposed
To be the best and leading fast food provider around the globe
Mission Proposed
McDonald’s brand mission is to be our customer’s favorite place and way to eat, and
improve our operations to provide the most delicious fast food that meet our customer’s
expectation.
External Audit
EFE Matrix (External Factor Evaluation)
Internal Audit
Strength Weakness 1. Strong brand name, image and
reputation.
2. Large market share.
3. Strong global presence.
4. Specialized training for managers known as the Hamburger University.
5. McDonalds Plan to win focuses
on people, products, place,
price and promotion.
6. Strong financial performance
and position.
7. Introduction of new products
8. Customer focus (centric)
9. Strong Performance on the
global marketplace
1. Unhealthy food image.
2. High Staff Turnover including
Top management
3. Customer losses due to fierce
competition.
4. Legal actions related to health issues; use of trans fat & beef oil.
5. Uses HCFC-22 to make polystyrene that is contributing to ozone depletion.
6. Ignoring breakfast from the menu.
IFE Matrix (Internal Factor Evaluation)
Analysis of EFE
EFE Matrix shows it is managing its opportunities and threats average.
Actions:
1. Acquire small food companies to attract heavy traffic
2. Make contracts with major educational institutions and corporations
3. introduce healthier products with low calories and fats
Analysis of IFE
IFE Matrix shows that McDonalds is managing strength and weaknesses very well
Actions:
1. It should maintain its leadership position to overcome its weaknesses
2. Should provide the healthy low calories food
3. Should disclose the proper information to customers to avoid legal actions
CPM (Competitive profile Matrix)
McDonalds YUM BURGER KING
Critical SUCCESS FACTORS
WEIGHT RATING W.SC RATING W.SC RATING W.SC
Product Quality 0.25 3 0.75 4 1 3 0.75
Price Competitiveness
0.2 3 0.6 3 0.6 3 0.6
Market Share 0.2 4 0.8 3 0.6 2 0.4
R& D 0.05 2 0.1 2 0.1 2 0.1
Financial Position
0.1 4 0.4 3 0.3 2 0.2
Consumer Loyalty
0.2 3 0.6 3 0.6 2 0.4
Total 1.00 3.25 3.2 2.45
CPM shows that McDonalds is doing well as compare to its competitors
Actions:
1. It should emphasize on its product quality as it is lacking as compare to YUMS
2. McDonalds should also focus on R&D to gain competitive advantage
SWOT Matrix
STRENGTHS (S):
Value based pricing
Strong R&D
Strong global presence in more than 100 countries
Standardized quality products
market leader in both the domestic as well as the international markets
Large number of loyal customer
Good CSR
Focused on customer’s comfort by making different zones for different customers
Convenient and extended hours
WEAKNESSES (W):
sued multiple times for serving unhealthy food
weak in analyzing the needs of customers
Do not disclose proper information to customers
Attracting kids due to which parents are going against them
OPPORTUNITIES (O):
Respond to social changes - by innovation within healthier lifestyle foods
Joint ventures with retailers or acquisitions
Introducing new food items and products
S-O STRATEGIES
introducing new menus with nutritious ingredients (S2,S3,O1,O2,O3)
Entering new market by Acquisition and Mergers(S3,S5,O2)
W-O STARTEGIES:
Providing healthier products to avoid legal actions(W1,O1,O3)
Providing proper information to customers on product ingredients through proper advertisement (W4,O1)
THREATS (T): S-T STRATEGIES W-T STRATEGIES
Consumer focus on nutrition and healthier lifestyles.
Recession or down turn in economy
Major competitors, like YUM, Burger King, Wendy's
New entrants in the industry
Fluctuation in Exchange Rates
Providing healthier products through R&D (S2,S4,T1)
Reduce threat of competitors by bringing new innovative products through strong R&D and by focusing more on loyal customers (S1,S2,S3,S6,T3)
Strongly analyzing the needs of customers in order to reduce the threat of new entrants and of existing competitors (W2,T3,T4)
Grand Strategy Matrix
ACTIONS:
It should go for,
Forward integration (joint ventures with retailers) Product development (launch new innovative products such as sandwiches
with more healthier ingredients) Market penetration by attracting non users of the product through intensive
advertising and by providing healthier products
MacDonald's
Financial Analysis
SPACE Matrix
ANALYSIS:
SPACE Matrix shows that McDonalds should aggressively go for
Forward integration (joint ventures with retailers)
Product development (launch new innovative products such as sandwiches with healthier ingredients)
BCG Matrix
Company is having high market shares and high growth rate in the industry.
STRATEGIC ALTERNATIVES
provide the healthy low calories food
Entering new markets through acquisitions and mergers
WEIGHT AS TAS AS TAS
OPPORTUNITIES:
Respond to social changes - by innovation within healthier lifestyle foods
0.12 4 0.48 4 0.48
Joint ventures with retailers or acquisitions 0.2 3 0.6
Introducing new food items and products 0.2 4 0.8 4 0.8
THREATS
Consumer focus on nutrition and healthier lifestyles.
0.15 4 0.6 3 0.45
Recession or down turn in economy 0.08 3 .24
Major competitors, like YUM, Burger King, Wendy's
0.09 4 0.36 3 0.27
New entrants in the industry 0.06 3 0.18 2 0.12
Fluctuation in Exchange Rates 0.1 4 0.4
SUM TOTAL ATTRACTIVENESS OF SCORE
1.00 2.34 3.36
QSPM
WEIGHT AS TAS AS TAS
STRENGTHS Strong global presence in more than 100 countries
0.1 4 0.4
market leader in both the domestic as well as the international markets
0.2 3 0.6 4 0.8
Large number of loyal customer 0.08 4 0.32 4 0.32 Strong R&D 0.08 4 0.32 2 0.16 Standardized quality products 0.05 3 0.15 3 0.15 Convenient and extended hours 0.05 2 0.10 Value based pricing 0.06 2 0.12 3 0.18 Focused on customer’s comfort by making different zones for different customers
0.05
Good CSR 0.05 2 0.10 WEAKNESS
sued multiple times for serving unhealthy food
0.15 4 0.20 3 0.45
weak in analyzing the needs of customers
0.08 3 0.24 3 0.24
Do not disclose proper information to customers
0.04 2 0.08 2 0.08
Attracting kids due to which parents are going against them
0.01 3 0.03
SUB TOTAL ATTRACTIVENESS OF SCORE
1.00 2.26 2.78
Set goals and make tangible progress for priority products as identified in the Sustainable Land Management Commitment;Reduce environmental impacts of direct suppliers by continuing to utilize the Supplier Environmental Scorecard as a continuous improvement tool;Work with other stakeholders on next actions resulting from the Global Conference on Sustainable Beef
Goals for 2011-2013