strategic management mcdonalds
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MCDONALDS CASE STUDY
Group Members
Hiba Munnawer
Sidra Javed
Maria Mustafa
Zakia Siddiqui
STRATEGY FORMULATION FRAME WORK1. INPUT STAGE EFE IFE CPM
2. MATCHING STAGE TOWS MATRIX SPACE MATRIX BCG MATRIX IE MATRIX GRAND STRATEGY MATRIX
3.DECISION STAGE QSPM
1. INPUT STAGE
Key External Factors Weight Rating Weighted Score
OPPORTUNITIES
Respond to social changes - by innovation within healthier lifestyle foods
0.12 4 0.48
Joint ventures with retailers or acquisitions 0.2 3 0.6
Introducing new food items and products 0.2 4 0.08
THREATS
Consumer focus on nutrition and healthier lifestyles. 0.15 4 0.6
Recession or down turn in economy 0.08 3 0.24
Major competitors, like YUM, Burger King, Wendy's 0.09 3 0.27
New entrants in the industry 0.06 2 0.12
Fluctuation in Exchange Rates 0.1 3 0.3
TOTAL 1.00 2.69
EXTERNAL FACTOR EVALUATION MATRIX (EFE):
ANALYSIS OF EFE MATRIX:
EFE Matrix shows it is managing its opportunities and threats average.
Actions:1. Acquire small food companies to attract heavy
traffic2. Make contracts with major educational
institutions and corporations3. introduce healthier products with low calories
and fats
Key Internal Factors Weight Rating Weighted Score
STRENGTHS
Strong global presence in more than 100 countries 0.1 4 0.4market leader in both the domestic as well as the international markets
0.2 4 0.8
Large number of loyal customer 0.08 3 0.24
Strong R&D 0.08 3 0.24
Standardized quality products 0.05 3 0.15
Convenient and extended hours 0.05 2 0.10
Value based pricing 0.06 3 0.18
Focused on customer’s comfort by making different zones for different customers
0.05 3 0.15
Good CSR 0.05 2 0.10
WEAKNESSESsued multiple times for serving unhealthy food 0.15 4 0.6
weak in analyzing the needs of customers 0.08 4 0.32
Do not disclose proper information to customers 0.04 3 0.12
Attracting kids due to which parents are going against them 0.01 2 0.02
TOTAL 1.00 3.42
INTERNAL FACTOR EVALUATION MATRIX (IFE):
ANALYSIS OF IFE MATRIX:
IFE Matrix shows that McDonalds is managing strength and weaknesses very well
Actions:1. It should maintain its leadership position to
overcome its weaknesses2. Should provide the healthy low calories food3. Should disclose the proper information to
customers to avoid legal actions
McDonalds YUM BURGER KING
Critical SUCCESS FACTORS WEIGHT RATING W.SC RATING W.SC RATING W.SC
Product Quality0.25 3 0.75 4 1 3 0.75
Price Competitiveness
0.2 3 0.6 3 0.6 3 0.6
Market Share0.2 4 0.8 3 0.6 2 0.4
R& D0.05 2 0.1 2 0.1 2 0.1
Financial Position0.1 4 0.4 3 0.3 2 0.2
Consumer Loyalty0.2 3 0.6 3 0.6 2 0.4
Total 1.00 3.25 3.2 2.45
4 = superior, 3 = above average, 2 = average, 1 = poor. CPM
ANALYSIS OF CPM:
•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 YUMS2. McDonalds should also focus on R&D to gain
competitive advantage
2. MATCHING STAGE
TOWS STRATEGIES:STRENGTHS (S):Value based pricing Strong R&D Strong global presence in more than 100 countriesStandardized 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 STRATEGIESintroducing 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):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
S-T STRATEGIES
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)
W-T STRATEGIES
Strongly analyzing the needs of customers in order to reduce the threat of new entrants and of existing competitors (W2,T3,T4)
SPACE MATRIX
FINANCIAL STRENGTH Ratings
Earnings per share liquidity Net income ROI
6355
19INDUSTRY STRENGTH
Growth Potential (increasing demand). Technological knowhow (Requirement high) Ease of entry into the market Financial stability
5253
15
ENVIRONMENTAL STABILITY
Competitive Pressure is High Rate of inflation Price range Demand variability
-1-5-3-1
-10
COMPETITIVE ADVANTAGE
Market share Product quality Technological know how Control over distributers
-1-3-3-3
-10
CONCLUSION
FS Average is 19/4 =4.75 IS Average is 15/4=3.75 ES Average is -10/4=-2.5 CA Average is -10/4=-2.5 Directional Vector Coordinates:
x-axis: -2.5+3.75=1.25y-axis: 4.75+(-2.5)=2.25
-6 Worst -1 Best
-6 Worst -1 Best
+1 Worst +6 Best
+1 Worst +6 Best
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 more healthier
ingredients)
BCG MATRIX
STRONG3.0 TO 4.0
AVERAGE2.0 TO 2.99
WEAK1.0 TO 1.99
HIGH3.0 TO 4.0
I II III
MEDIUM2.0 TO 2.99
IV
V VI
LOW1.0 TO 1.99
VII VIII IX
IE MATRIX:
THE IFE TOTAL WEIGHTED SCORE
THE EFETOTALWEIGHTED SCORE
McDonalds
ANALYSIS OF IE IE Matrix shows the MacDonald's in IV quadrant
i.e. the BUILD AND GROW ACTIONS:It should go for, Forward integration (joint ventures with
retailers) Product development (launch new innovative
products such as sandwiches with more healthier ingredients)
GRAND MATRIX
MacDonald's
ANALYSIS OF GRAND MATRIXACTIONS: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
3. DECISION STAGE
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 0.4market 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 0.32Strong R&D 0.08 4 0.32 2 0.16Standardized quality products 0.05 3 0.15 3 0.15Convenient and extended hours 0.05 2 0.10Value based pricing 0.06 2 0.12 3 0.18Focused on customer’s comfort by making different zones for different customers
0.05
Good CSR 0.05 2 0.10WEAKNESS
sued multiple times for serving unhealthy food
0.15 4 0.20 3 0.45weak in analyzing the needs of customers 0.08 3 0.24 3 0.24Do not disclose proper information to customers
0.04 2 0.08 2 0.08Attracting kids due to which parents are going against them
0.01 3 0.03SUB TOTAL ATTRACTIVENESS OF SCORE
1.00 2.26 2.78
provide the healthy low calories food
Entering new markets through acquisitions and mergers
provide the healthy low calories food
Entering new markets through acquisitions and mergers
Total attractiveness score
4.6 6.14
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