is the innovation of McDonald’s !oods and services to match consumer preferences and expectations.
McDonald’s Mission Statement McDonald’s mission statement is o(cially stated as follo%s) “ Our mission is to be our customers’ favorite place and way to eat & drink. We’re dedicated to being a great place for our people to work to being a strong! positive presence in your community and to delivering the "uality! service! cleanliness and value our customers have come to e#pect from the $olden %rches a symbol that’s trusted around the world.” $n its mission statement, McDonald’s includes details about its market position, as sho%n in the “favorite place and %ay to eat * drink” component. Also, the human resource mana!ement approach is hi!hli!hted in the “!reat place for our people to %ork” component. $n addition, McDonald’s mission statement covers its corporate social responsibility position in the “positive presence in your community” part. The rest of the mission statement indicates McDonald’s brand ima!e and the character of its products. A strate!ic ob'ective based on this mission statement is !lobal brand development to stren!then the company’s ability to attract customers and investors. A related &nancial ob'ective based on McDonald’s mission statement is cost minimiation to optimie value.
McDonald’s Mission & Vision Statements – Recommendations McDonald’s vision statement re+ects the overall strate!ic direction of the company. The dierent aspects of the business are covered and characteried in the vision statement. Thus, McDonald’s comprehensively states %hat it %ants to achieve, makin! the vision statement satisfactory. A satisfactory vision statement helps unify the aims in the dierent areas of the or!aniation. McDonald’s mission statement is also comprehensive. -or instance, the aspects of human resource mana!ement and corporate social responsibility are included in the mission statement. o%ever, a point of interest is the aspect of innovation. -or example, ho% does McDonald’s ensure that it addresses consumers’ expectations/ Thus, it is better to include innovation in the mission statement, as %ell. McDonald’s mission statement can specify research"based or technolo!y"based product innovation as a !eneral approach to ensure customer satisfaction. Throu!h this additional detail, the mission statement could be more relevant to McDonald’s business condition, %hich actually involves product innovation. 'eferences •
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0artkus, 0., 1lassman, M., * McAfee, 0. 234456. Mission statement #uality and &nancial performance. (uropean Management )ournal, *+276, 85"9:. ;on!, <., * =ickers">och, M. 2799:6.
is the innovation of McDonald’s !oods and services to match consumer preferences and expectations.
McDonald’s Mission Statement McDonald’s mission statement is o(cially stated as follo%s) “ Our mission is to be our customers’ favorite place and way to eat & drink. We’re dedicated to being a great place for our people to work to being a strong! positive presence in your community and to delivering the "uality! service! cleanliness and value our customers have come to e#pect from the $olden %rches a symbol that’s trusted around the world.” $n its mission statement, McDonald’s includes details about its market position, as sho%n in the “favorite place and %ay to eat * drink” component. Also, the human resource mana!ement approach is hi!hli!hted in the “!reat place for our people to %ork” component. $n addition, McDonald’s mission statement covers its corporate social responsibility position in the “positive presence in your community” part. The rest of the mission statement indicates McDonald’s brand ima!e and the character of its products. A strate!ic ob'ective based on this mission statement is !lobal brand development to stren!then the company’s ability to attract customers and investors. A related &nancial ob'ective based on McDonald’s mission statement is cost minimiation to optimie value.
McDonald’s Mission & Vision Statements – Recommendations McDonald’s vision statement re+ects the overall strate!ic direction of the company. The dierent aspects of the business are covered and characteried in the vision statement. Thus, McDonald’s comprehensively states %hat it %ants to achieve, makin! the vision statement satisfactory. A satisfactory vision statement helps unify the aims in the dierent areas of the or!aniation. McDonald’s mission statement is also comprehensive. -or instance, the aspects of human resource mana!ement and corporate social responsibility are included in the mission statement. o%ever, a point of interest is the aspect of innovation. -or example, ho% does McDonald’s ensure that it addresses consumers’ expectations/ Thus, it is better to include innovation in the mission statement, as %ell. McDonald’s mission statement can specify research"based or technolo!y"based product innovation as a !eneral approach to ensure customer satisfaction. Throu!h this additional detail, the mission statement could be more relevant to McDonald’s business condition, %hich actually involves product innovation. 'eferences •
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0artkus, 0., 1lassman, M., * McAfee, 0. 234456. Mission statement #uality and &nancial performance. (uropean Management )ournal, *+276, 85"9:. ;on!, <., * =ickers">och, M. 2799:6.
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;ucas, . B. 279986. Anatomy of a vision statement. Management 'eview , 10236, 33. McDonald’s
Mc Donal d’ sGener i cSt r at egy&I nt ens i v e Gr owt hSt r at egi es Mc Donal d’ sgener i cs t r at egydet er mi nesi t sbas i cappr oac ht odev el opi ngi t sbus i nes sand c ompet i t i v eadv ant age.Ast hebi gges tf as tf oodr es t aur antc hai ni nt hewor l d,Mc Donal d’ s us esi t si nt ens i v egr owt hs t r at egi est os uppor tc ont i nuedbus i nes sdev el opmentand ex pans i on.Ther el at eds t r at egi cobj ec t i v esdi c t at et hec ompany ’ soper at i onal ac t i v i t i es , es pec i al l yi nr es pondi ngt oec onomi cc hangesandt heac t i onsofc ompe t i ngfi r ms . Var i at i onsi nma mar k etc ondi t i onsi mpos epr es sur eont hebus i nes st oadaptorr ef or mi t s s t r at egi es .Ass uc h,Mc Donal d’ sgener i cs t r at egyandi nt ens i v egr owt hs t r at egi eschange ov ert i met oens ur el ongt er m bus i nes sv i abi l i t y .
McDonald’s generic strategy de3nes the 3rm’s overall business approach for competitiveness. competitivene ss. ,he intensive strategies determine McDonald’s approach to growing its business in the global fast food restaurant industry. industry.
McDonal d’ sGe Gener i cSt r at egy( Por t er ’ sMo Model ) Mc Donal d’ spr i mar ygener i cs t r at egyi sc os tl eader s hi p.I nPor t er ’ smodel ,t hi sgener i c s t r at egyi nv ol v esmi mi ni mi z i ngc os t st oofferpr oduc t satl owpr i c es .Asal owc os tpr ov i der , Mc Donal d’ soffer spr oduc t st hatar er el at i v el yc heaperc ompar edt oc ompet i t or sl i k eAr by ’ s .
Ho wev e r ,t hec ompan yal s ous esbr oaddi ff er ent i at i onasas ec ond ar yors uppor t i nggener i c s t r at egy . Thi ssec ondar ygener i cs t r at egyi nv ol v esdev el opi ngt hebus i nes sandi t spr oduc t s t omak et hem di s t i nc tf r om c ompe t i t or s .Fore x ampl e,t hr oughMc Caf épr oduc t s ,Mc Donal d’ s appl i est hebr oaddi ffer ent i at i ongener i cs t r at egy .
=ertical inte!ration is a strate!ic ob'ective linked to McDonald’s cost"leadership !eneric strate!y. -or example, McDonald’s o%ns facilities that produce standardied mixtures of in!redients. Also, cost minimiation is a &nancial strate!ic ob'ective based on the cost leadership !eneric strate!y. $n addition, product innovation is related to McDonald’s broad dierentiation !eneric strate!y.
McDonald’s Intensive Strategies (Intensive Growth Strategies) Market Penetration. McDonald’s uses market penetration as its primary intensive strate!y for !ro%th. $n applyin! this intensive strate!y, McDonald’s !ro%s by reachin! more customers in markets %here it already has operations. -or example, McDonald’s opens ne% restaurants in Eorth America and Furope by franchisin!, 'oint ventures or corporate o%nership. A strate!ic ob'ective connected to this intensive !ro%th strate!y is !lobal expansion throu!h ne% locations. McDonald’s !eneric strate!y supports this intensive !ro%th strate!y because lo% costs and lo% prices empo%er the &rm to easily penetrate markets. Market Develoment. $n its early years, McDonald’s used market development as its primary intensive strate!y for !ro%th. o%ever, market development is no% a secondary intensive !ro%th strate!y because McDonald’s already has restaurants in most re!ions around the %orld, except Mon!olia, some parts of the Middle Fast and %est Asia, and the ma'ority of African countries. A strate!ic ob'ective for this intensive !ro%th strate!y is to establish ne% locations in ne% markets, such as ne% McDonald’s restaurants in African or Middle Fastern countries %here the company currently has no operations. 0ased on its !eneric strate!y of cost leadership, McDonald’s supports this intensive !ro%th strate!y by usin! lo% prices to compete in ne% markets. Prod!ct Develoment. McDonald’s uses product development as its tertiary or supportin! intensive strate!y for !ro%th. $n applyin! this intensive !ro%th strate!y, McDonald’s develops ne% products over time, such as ne% Mc
Strategic "nal#sis and Recommendation $or McDonald’s McDonald’s !eneric strate!y of cost leadership enables the company to sustain its market leadership. The company’s broad dierentiation strate!y also helps.
o%ever, a possible strate!ic direction for McDonald’s continued !ro%th is to establish more locations in developin! economies and in countries %here the &rm has no market presence. The recommended strate!ic !oal is to fuel business !ro%th throu!h a combination of the market penetration and market development intensive strate!ies. 'eferences •
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1ar!asas, A., * Mu!iene, $. 234736. $ntensive !ro%th strate!y development trends in lo!istics services for a!ricultural or!aniation providin! companies. Management ,heory and 4tudies for 'ural 5usiness and 6nfrastructure Development , 7+2C6, :@"C?. McDonald’s 347: . Merchant, . 2347:6.
Mc Donal d’ sOr gani z at i onal St r uc t ur e Anal y s i s
Mc Do nal d’ sor gani z at i ona ls t r uc t ur ewasr ef or medi nJ ul y1,20 15t oi mpr o v et hec ompan y ’ s handl i ngofi t sgl obal oper at i ons .Afi r m’ sor gani z at i onal s t r uc t ur edefi nest hes y st em t hr oughwhi c hor gani z at i onal c omponent sc oor di nat et oac hi e v ebus i nes sobj ec t i v es . Mc Donal d’ sor gani z at i onal s t r uc t ur ef ac i l i t at esmanagi ngmar k et sbas edonper f or manc e l ev el s .Ast hel ar ges tf as tf oodr es t aur antc hai ni nt hewor l d,Mc Donal d’ sk eepsev ol v i ngt o addr es sc ur r entandemer gi ngmar k eti s s ues .Thefi r mr ol l soutnewpr oduc t st omai nt ai ni t s per f or manc ei ns at i s f y i ngc us t omer s .Thes eendea v or sa r es uppor t edt hr oughMc Donal d’ s or gani z at i onal s t r uc t ur e,whi c hi sdes i gnedt oadaptt ot hec hangi ngbus i nes senv i r onment .
McDonald’s organi8ational structure establishes the arrangement or pattern of interactions among various business areas. ,hrough its corporate structure! McDonald’s succeeds in managing e9ciency and performance in its operations in the global fast food restaurant industry.
Fe at ur e sofMc Dona l d’ sOr ga ni z a t i ona lSt r uc t ur e Mc Donal d’ shasadi v i s i onal or gani z at i onal s t r uc t ur e.Eac hdi v i s i onhandl esas pec i fi c oper at i onal ar ea.Theai m oft hi sor gani z at i onal s t r uc t ur ei st os uppor taut onomyand or gani z at i onal fl ex i bi l i t y .Mc Donal d’ sor gani z at i onal s t r uc t ur ehast hef ol l owi ng c har ac t er i s t i c s,ar r angedac cor di ngt os i gni fi canc e:
7. 3. ?.
1lobal hierarchy erformance"based divisions -unction"based !roups
Glo%al ierarch#.Mc Donal d’ shasagl obal hi er ar c hyt oc ov eral l i t soper at i ons wor l dwi de.Thi sf eat ur eoft heor gani z at i onal s t r uc t ur eemphas i z esc or por at ec ont r ol .For e x ampl e,Mc Don al d’ sCEO di r ec t st hea ct i v i t i esofal l bus i nes sar eas .Mandat esar epas s ed f r o mt h eCEO d ownt omi d dl ema na ge r s ,a ndt ot h er e s t a ur a ntma na ge r san dp er s o nn el . Thi schar ac t er i s t i cofMc Donal d’ sor gani z at i onal s t r uc t ur ei st y pi c al ofmos tgl obal bus i nes s or gani z at i ons . Per$ormance'ased Divisions.Theper f or manc ebas eddi v i s i o nsar et hemos t di s t i nc tf eat ur eofMc Donal d’ sor gani z at i onal s t r uc t ur e.Thec ompanyr eor gani z edi t s s t r uc t ur eonJ ul y1,2015.Bef or et her eor gani z at i on,t hegeogr aphi cdi v i s i onsi nMc Donal d’ s or gani z at i onal s t r uc t ur ewer e( a)U. S. ,( b)Eur ope,( c )As i a/ Pac i fi c,( d)Mi ddl eEas tand Af r i c a( APMEA)a nd( e )Ot he rCo un t r i es&Cor p or a t e( OCC)i nc l u di n gCa nad a,L at i n Amer i c aa ndCor p or at e.Af t ert her eor gani z at i on,Mc Dona l d’ sus edper f or manc easbas i sf or t henewdi v i s i onsi ni t sor gani z at i onal s t r uc t ur e:( a)U. S. ,( b)I nt er nat i onal LeadMar k et s ,( c )
Hi g hGr o wt hMar k e t s ,an d( d )Fo un da t i o na lMa r k e t san dCor p or a t e .TheU. S.a c c ou nt sf o r mo r et h an4 0% o fMc Do na l d ’ sr e v e nu es ,a ndt h el e adma r k e t sf o r4 0%.Th eh i g hg r o wt h mar k e t sa c c ou ntf or1 0% o fr e v enu es . !nction'ased Gro!s.Mc Donal d’ smai nt ai nsf unc t i onbas edgr oupsi ni t s or gani z at i onal s t r uc t ur e.Fore xampl e,underc or por at eoper at i ons ,t hec ompan yhasa h uma nr e s ou r c ema na geme ntg r o up,as up pl yc h ai nandf r a nc h i s i nggr o up,a ndal e ga l gr oup.Thi sc har ac t er i s t i coft heor gani z at i onal s t r uc t ur eenabl esMc Donal d’ st oaddr es st he bas i cf unc t i onsi ni t sbus i nes s.
McDonal d’ sOr gani zat i onalSt r uct ur eAdvant ages& Di sadvant ages Anadv ant ageoft hehi er ar c hyi nMc Donal d’ sor gani z at i onal s t r uc t ur ei si t ss uppor tf or moni t or i ngandc ont r ol ofgl obal oper at i ons .Al s o,t heper f or manc ebas eddi v i s i onshav et he a dv a nt a geofe na bl i n gMc Don al d’ st oi mpl eme nts t r a t e gi esba s edo nmar k e tp er f o r ma nc e s i mi l ar i t i es .Forex ampl e,t hefi r m appl i ess i mi l ars t r at egi esf oral l l eadmar k et s .Howev er ,a di s adv ant ageofMc Donal d’ sor gani z at i onal s t r uc t ur ei st hati tt endst ogener al i z es t r at egi es f ort heper f or manc ebas eddi v i s i ons .Thec ompanyhasl i mi t edfl ex i bi l i t ybec aus eoft hi s f eat ur eoft heor gani z at i onal s t r uc t ur e.
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Mc Donal d’ sOr gani z at i onal Cul t ur eAnal y si s Mc Donal d’ sor gani z at i onal c ul t ur es uppor t st hec ompany ’ si ndus t r ypos i t i oni nggoal s .Ast he bi gges tpl ay eri nt hegl obal f as tf oodr es t aur antmar k et ,Mc Donal d’ sus esi t sor gani z at i onal c ul t ur et oat t r ac tc us t omer sandqual i fi edempl o y ees .Afi r m’ sor gani z at i onal c ul t ur edefi nes t het r adi t i ons ,habi t sandv al uest hati nfl uenc ewor k er s ’behav i or s .T oens ur ebus i nes s effic i enc yi npr oduc t i onands er v i c e,Mc Donal d’ sor gani z at i onal c ul t ur eenc our agesl ear ni ng. I naway ,t hec ont i nui ngev ol ut i onoft heor gani z at i onr efl ec t st hefi r m’ seffec t i v enes si n appl y i ngi t scor por at ec ul t ur et oac hi ev et hedes i r edl ev el sofhumanr es our c ec apabi l i t i es . Thi scondi t i onhi ghl i ght st hes i gni fi canc eofor gani z at i onal c ul t ur easas uc ces sf ac t ori n Mc Donal d’ si nt er nat i onal bus i nes s .
McDonald’s organi8ational culture supports operational e9ciency to ma#imi8e productivity. 4ervice "uality is also enhanced through the e
Fe at ur e sofMc Dona l d’ sOr ga ni z a t i ona lCul t ur e Mc Do na l d ’ so r g an i z a t i o na lc u l t u r eemph as i z e shu ma nr e s ou r c ede v el o pme nta ndeffic i e nc y . I ts uppor t sbus i nes sgr owt hands uc ces si nt hei nt er nat i onal f as tf oodr es t aur antmar k et . Thi sor gani z at i onal c ul t ur ehast hef ol l owi ngc har ac t er i s t i c s,ar r angedac cor di ngt o Mc Donal d’ spr i or i t i z at i on:
7. 3. ?. :.
eople"centricity $ndividual learnin! Ir!aniational learnin! Diversity and inclusion
Peole'*entricit#.Mc Donal d’ sor gani z at i onal c ul t ur epr i or i t i z esempl oy ees ’ needsand devel opment .Thecompany’ sCor eVal uesandSt andar dsofBusi nessConductemphasi ze t hei mpor t anc eofs uppor t i ngpeopl e.Thi si sunder s t andabl e,c ons i der i ngt hatMc Donal d’ si s as er v i c ebus i nes s .T oens ur es uppor tf orpeopl e,t hec ompan y’ sor gani z at i onal c ul t ur e encour agesempl oyeest oengagemanagementt ohel pi mpr ovepr ocessesandpr ocedur es. Individ!al +earning.Mc Donal d’ sor gani z at i onal c ul t ur ehi ghl i ght st hei mpor t anc eof l i f el ongl ear ni ng.Thebel i efi st hati ndi v i dual l ear ni ngpr omot espr oduc t i v i t y ,qual i t y ,and bus i nes seffec t i v enes s.T of ac i l i t at ei ndi v i dual l ear ni ng,t hec ompanyoffer st r ai ni ngand dev el opmentoppor t uni t i est hr oughHambur gerUni v er s i t y ,i nt er ns hi ps ,gl obal mobi l i t y ,and l e ad er s hi pde v el o pme ntpr og r a ms .Th es ee ffo r t sens u r et h atMc Do na l d ’ sma i n t a i n sa n or gani z at i onal c ul t ur et hatmot i v at esempl oy eest ok eepl ear ni ng. ,rgani-ational +earning.Mc Donal d’ sor gani z at i onal c ul t ur eal s os uppor t s or gani z at i onal l ear ni ng.Thefi r m ai mst ous ei ndi v i dual l ear ni ngt odev el opor gani z at i onal k no wl edget opus ht hebus i nes sf or war dt one w hei ght so fper f or manc e.Mc Donal d’ sa ppl i es t hi sf eat ur eofi t sor gani z at i onal c ul t ur et hr oughpol i c i es ,pr ogr amsandmeet i ngst hat encour ageempl oyeef eedbackandknowl edgeshar i ng. Diversit# and Incl!sion .Mc Do na l d ’ so ffic i a lh uma nr e s ou r c ema na ge me ntp ol i c y s t at est hatdi v er s i t yandi nc l us i onar ek eyf ac t or si nt hefi r m’ sor gani z at i onal c ul t ur e. Mc Donal d’ sr ec ogni z est hei mpor t anc eofdi v er s i t yandi nc l us i oni nopt i mi z i ngHR c apabi l i t i est odeal wi t hani nc r eas i ngl ydi v er s emar k et .Toens ur es uppor tf ordi v er s i t yand i nc l us i on,Mc Donal d’ sor gani z at i onal c ul t ur eenc our agesempl oy ees ,s uppl i er s ,f r anc hi s ees , andc us t omer st ogi v et hei rf eedbac kande ng ag ei nmeani ngf ul c on v er s at i onst oi mpr o v e t hebus i n es s .
McDonal d’ sOr gani zat i onalCul t ur eAdvant ages&Di sadvant ages Mc Do nal d’ sor gani z at i ona lc ul t ur ehast headv ant ag eofen abl i ngt hec ompan yt oi mpr o v e qual i t yofs er v i c et hr oughpeopl ec ent r i c i t y ,i ndi v i dual l ear ni ng,andor gani z at i onal l ear ni ng. Howev er ,ex c el l enc eandhi ghqual i t yar ec ons i der at i onsnoteffec t i v el yc ov er edi nt he c or por at ec ul t ur e.Whi l eMc Donal d’ shi ghl i ght sl ear ni ngands uppor tf orpeopl ei nt he or gani z at i onal c ul t ur e,t her ei snoemphas i sone xc el l enc ei ni ndi v i dual per f or manc e.Thus ,
apos s i bl ei mpr o v ementi sf orMc Don al d’ st oemphas i z ee x c el l enc eandh i ghqual i t yout put i ni t sor gani z at i onal c ul t ur e.
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. K., * Luinn, B. F. 2344C6. Diagnosing and changing organi8ational culture= 5ased on the competing values framework . ohn Hiley * Kons. Denison, D. B. 279946. >orporate culture and organi8ational e
Mc Donal d’ sSWOTAnal y s i s& Rec ommendat i ons
Mc Donal d’ smai nt ai nsi t spos i t i onast het oppl ay eri nt hegl obal f as tf oodr es t aur anti ndus t r y t hr oughs t r at egi est hataddr es st hei nt er nal andex t er nal f ac t or si nt hi sSWOTanal y s i s .The SWOTanal y s i sf r amewor ki dent i fi est hemos tr el ev anti nt er nal andex t er nal bus i nes sf ac t or s t hatdet er mi net hefi r m’ ss uc ces s.Mc Donal d’ sus esav ar i et yofs t r at egi est odeal wi t ht hes e f ac t or s .Ho wev e r ,t hec ompan yf ac esc ons i der abl ei s s uesbas edonemer gi ngc on di t i onsi n t hegl ob al mar k e t .Thi sSWOTanal y s i spoi nt soutt hemos tpr es s i ngc onc er nst hat Mc Donal d’ smus taddr es st ok eepi t sl eader s hi pi nt hei ndus t r y .
,his 4WO, analysis of McDonald’s >orporation shows that the company must address diversi3cation and process @e#ibility! as well as business e#pansion and innovation.
McDona l d’ sSt r engt hs( I nt e r na lSt r a t e gi cFa ct or s ) Mc Donal d’ sst r engt hsmak ei tal eadi ngc ont enderi nt hef as tf oodr es t aur antmar k et .Thi s as pec toft heSWOTanal y s i sshowst hei nt er nal s t r at egi cf ac t or st hatc ont r i but et o or gani z at i onal v i abi l i t y .Mc Donal d’ smai ns t r engt hsar easf ol l ows :
7. 3. ?.
Ktron! brand ima!e Moderate market diversi&cation Ktandardied processes
Mc Do na l d ’ shasab r a ndi ma get ha tma k est h eb us i n es sc ompe t i t i v e l ys t r o ng.An ot h erma j o r s t r engt hi smar k etdi v er s i fi c at i onbas edont hefi r m’ spr es enc ei nmos tr egi onsar oundt he wor l d.Thi sf ac t orr educ esmar k et bas edr i s k s.I naddi t i on,Mc Donal d’ shasac ompr ehens i v e s y s t em ofs t andar di z edpr oc es s es ,whi c hi sas t r engt ht hatc ont r i but est obus i nes seffic i enc y a ndp r o du c tc o ns i s t e nc y .Th i sas pe c tofMc Do na l d ’ sSWOTa na l y s i ss ho wst h att he c ompanyhast hec apabi l i t yt omai nt ai neff ec t i v eoper at i ons .
McDonal d’ sWeaknesses( I nt er nalSt r at egi cFact or s) Mc Do na l d ’ swe ak ne s s esar el i n k edt ot h ec ompa ny ’ sma r k e tf o cu s ,pr o du ct san dpr oc e s s es . Thi sas pec toft heSWOTanal y si si ndi c at est hei nt er nal s t r at egi cf ac t or st hatl i mi tfi r m p er f o r ma nc e .Mc Do na l d ’ sma i nwe ak n es s e sar ea sf o l l o ws :
7. 3. ?.
;imited process +exibility ;o% product diversi&cation =ulnerability to Hestern market decline
Mc Donal d’ sst andar di z at i onens ur escons i s t enc ybutal s or educ est hec ompany ’ sfl ex i bi l i t y i nr es pondi ngt omar k etv ar i at i ons .Lowpr oduc tdi v er s i fi cat i onc or r es pondst ot hefi r m’ s f oc u so nf oo da ndb ev e r a gep r o duc t s ,wh i c hi sawea k ne s st h atma k est h eb us i n es shi gh l y v ul ner abl et os l owdownsi nt her es t aur anti ndus t r y .I naddi t i on,maj or i t yofMc Donal d’ s r e v en uesa r ef r o mt heU. S.a ndo t he rWe s t e r nec o nomi e s .Th i si sawe ak n es sbe c au s ei t mak est hefi r m eas i l yv ul ner abl et oec onomi cdec l i nei nt heWes t er nwor l d.Thi sas pec tof Mc Do na l d ’ sSWOTa na l y s i ssh owst h att h ec o mp an yne ed st ogl o ba l l yex p an d,i mp r o v e fl ex i bi l i t y ,andwi deni t spr oduc tmi x .
Oppor t uni t i esf orMc Donal d’ s( Ext e r n alSt r a t e gi cFac t or s) Mc Donal d’ soppor t uni t i esar el i nk edt oi t spr oduc tmi xandgl obal gr owt h.Thi sas pec toft he SWOTanal y s i spoi nt st ot heex t er nal s t r at egi cf ac t or st hats uppor tbus i nes sgr owt h. Mc Donal d’ smai noppor t uni t i esar easf ol l ows :
7. 3. ?.
Fxpansion in developin! countries Market development in the Middle Fast roduct diversi&cation
Co ns i d er i n gi t sde pen de nc eo nWes t er nmar k e t s ,Mc Don al d’ sha st h eo pp or t un i t yt og r o w a nde x p an di nd ev e l o pi n gc o un t r i e s ,s u c ha sAs i a ne c on omi e s .Th ec o mp an yc ana l s ou s e amar k etdev el opments t r at egyt oes t abl i s hoper at i onsi nMi ddl eEas t er nc ount r i est hati t hasnoty etent er ed.I naddi t i on,t oaddr es smar k et bas edr i s k s,Mc Donal d’ shast he oppor t uni t yt ode v el opnewpr oduc t sorent ernewi ndus t r i es .Thi sas pec tofMc Donal d’ s SWOTanal y s i ssho wst hatt hebus i nes shassi gn i fi c antoppor t uni t i esf org l obal gr o wt hand e x pa ns i o n.
Thr e at sFa ci ngMc Dona l d’ s( Ex t e r na lSt r a t e gi cFa ct or s ) Thet hr eat st oMc Donal d’ sar ebas edonc ompet i t i v er i v al r yands oc i oc ul t ur al t r ends .Thi s as pec toft heSWOTanal y s i sdeal swi t ht heex t er nal s t r at egi cf ac t or st hatl i mi tbus i nes s de v el opment .Themai nt hr eat st oMc Do nal d’ sbus i nes sar ea sf ol l o ws :
7. 3. ?.
A!!ressive competition ealthy lifestyles trend 1MI trend and re!ulations
Ther es t aur anti ndus t r yi shi ghl ycompet i t i v e.Aggr es si v ec ompet i t or st hr eat enMc Donal d’ s s t at usast hemar k etl eader .Al s o,t heheal t hyl i f es t y l est r endi sat hr eatbec aus ei t di s cour agesc ons umer sf r om eat i ngatMc Donal d’ s ,whi c hi sof t enc r i t i c i z edf orunheal t hf ul pr oduc t s .I naddi t i on,GMO r egul at i onsar eat hr eatbec aus et heyhav et hepot ent i al t ol i mi t Mc Do na l d ’ sp r o du c t s .Th efi r mc u r r e nt l yd oe sno th av eac o mp r e he ns i v epo l i c yo nGMO
i n gr ed i ent s .Thi sa s pec toft heSWOTanal y s i ss ho wst hatMc Don al d’ sn ee dst ode v el op newpol i c i esr egar di ngGMO i ngr edi ent s ,aswel l asnewpr oduc t st oat t r ac theal t hconsci ousconsumer s.
McDonal d’ sSWOTAnal ys i s–Recommendat i ons Thi sSWOTanal y s i ss ho wst hatMc Donal d’ scani mpr o v ei t sbus i nes svi ab i l i t yt hr ough c ont i nuedgl obal e xpans i on,es pec i al l yi nhi ghgr owt hmar k et s .Al s o,t hec ompan yc an r educ er i s k sbydev el opi ngnewpr oduc t sorent er i ngnewi ndus t r i esr el at edt ot hef as tf ood r es t aur anti ndus t r y . Thes ear et hemos tr el ev antac t i onsMc Donal d’ sc ant ak ebas edoni t s SWOTanal ys i s.
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ill, T., * Hestbrook, B. 2799@6. KHIT analysis) it’s time for a product recall. Aong 'ange lanning, 72276, :5"C3. McDonald’s 347: . ickton, D. H., * Hri!ht, K. 279986. Hhat’s KHIT in strate!ic analysis/ 4trategic >hange, 0236, 747"749. iercy, E., * 1iles, H. 279896. Makin! KHIT analysis %ork. Marketing 6ntelligence & lanning , 02C56, C"@. =alentin, F. >. 234476. KHIT analysis from a resource"based vie%. )ournal of Marketing ,heory and ractice , C:"59.
McDonal d’ sSt ak ehol der s:ACSRAnal ys i s Mc Do nal d’ ss t ak e hol der saff ec tt hefi r m,es pec i al l ybywa yofc ons umerper c ept i on.The c ompanyhasav ar i et yofc or por at es oc i al r es pons i bi l i t y( CSR)pr ogr amst oaddr es si t s s t ak ehol der s ’ i nt er es t s .I nt heor y ,s t ak ehol der saffec tbus i nes sandar eaffec t edbybus i nes s. Thi sc ondi t i onpoi nt st ot hei mpor t anc eofMc Donal d’ sc or por at es oc i al r es pons i bi l i t yeffor t s asawayofopt i mi z i ngt hec ompany ’ spos i t i onr el at i v et oi t ss t ak ehol der s .Ast hel eadi ng fi r mi nt hegl obal f as tf oodr es t aur anti ndus t r y ,Mc Donal d’ shasdev el opedc or por at es oc i al r es pons i bi l i t ys t r at egi est omi ni mi z et henegat i v eeffec t sofs t ak ehol der swhi l es at i s f y i ng t hei ri nt er es t s .Mc Donal d’ ss uc ces si spar t l ybas edoni t sc or por at es oc i al r es pons i bi l i t y e ff o r t s .
McDonald’s corporate social responsibility policy and programs address most stakeholders to ensure prudent relationships with them. ,he company includes stakeholders’ interests in its >4' e
McDonal d’ sSt akehol derGr oups& CSRI ni t i at i ves Mc Do nal d’ st ops t ak eh ol der sa r ei t se mpl o y eesa ndc us t omer s .Ho we v er ,t hefi r m’ s c or por at es oc i al r es pons i bi l i t yst at usi sal s os ubj ec tt ot hei nfl uenc eofot hers t ak ehol der s . Thef ol l o wi ngar eMc Donal d’ sma i ns t ak ehol dergr oups ,ar r angedac c or di ngt os i g ni fi c anc e:
7. 3. ?. :.
Fmployees
.mlo#ees. McDonald’s priorities employees as its top stakeholder !roup. The interests of these stakeholders include career development and fair compensation. McDonald’s addresses these interests throu!h a number of trainin! and development pro!rams. -or example, the company maintains ambur!er Jniversity, %hich is a trainin! facility for its personnel. McDonald’s also has a !lobal mobility policy that supports leadership development. o%ever, the company pays lo% %a!es that are almost do%n to the level of the le!al minimum %a!e, even %hen employees keep demandin! for hi!her %a!es. Thus, McDonald’s corporate social responsibility eorts only partially satisfy the interests of employees as a stakeholder !roup. *!stomers. McDonald’s
responsibility pro!rams to support these stakeholders. McDonald’s eectively satis&es the interests of communities as a stakeholder !roup.
McDonald’s *SR Per$ormance in "ddressing Stakeholders’ Interests McDonald’s corporate social responsibility initiatives are considerable. They are eective in addressin! the interests of the stakeholder !roups of investors and communities. o%ever, McDonald’s only partially satis&es the interests of employees and customers as ma'or stakeholders in the business. Thus, it %ould be better for the company to improve its corporate social responsibility eorts. -or example, McDonald’s can improve its compensation strate!y to satisfy employees’ concerns about their %a!es. roduct innovation for more healthful foods can also help satisfy the concerns of McDonald’s customers. 'eferences • • • •
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McDonald’s 347: . Miles, M. ., Munilla, ;. K., * Darroch, . 234456. The role of strate!ic conversations %ith stakeholders in the formation of corporate social responsibility strate!y. )ournal of 5usiness (thics, :;236, 79C"34C. eloa, ., * Khan!, . 234776. o% can corporate social responsibility activities create value for stakeholders/ A systematic revie%. )ournal of the academy of Marketing 4cience , 7;276, 77@"7?C. =os, . -. 2344?6. orporate 4ocial 'esponsibility and (nvironmental Management ,/22?6, 7:7"7C3. Herther r., H. 0., *
Mc Donal d’ sFi v eFor c esAnal y si s( Por t er ’ s Model ) Mc Donal d’ spos i t i onast hegl obal l eaderi nt hef as tf oodr es t aur antmar k eti spar t l yar es ul t oft hefi r m’ seffec t i v enes si nr es pondi ngt ot heFi v eFor c esi ni t si ndus t r yenv i r onment . Mi c hael Por t er ’ sFi v eFor c esanal y s i smodel i dent i fi est hemos tr el ev antex t er nal f ac t or st hat i nfl uenc ebus i nes sor gani z at i ons .I nMc Donal d’ sFi v eFor c esanal y s i s ,t hef oc usi sont he f as tf oodr es t aur anti ndus t r y .Theenv i r onmentoft hi si ndus t r yi nt er ac t swi t hMc Donal d’ st o affec tt hefi r m’ spot ent i al ands uc ces s.Nonet hel es s,i t scur r entgl obal s uc ces si ndi c at est hat Mc Do nal d’ sr emai nseff ec t i v ei naddr es s i ngt hes efi v ef or c esandi no v er c omi ngr el at ed i s s ues .
McDonald’s Bive Borces analysis gives insights about the company’s strategic direction. McDonald’s strategies must align to the e#ternal factors in the global fast food restaurant industry’s environment.
Over vi ew:McDonal d’ sFi veFor cesAnal ysi s I nt hi sFi v eFor c esanal y s i s ,Mc Donal d’ sex per i enc est heeffec t sofex t er nal f ac t or sat v ar y i ngi nt ens i t i es .Thec ompanymus ti mpl ements t r at egi est omeett hes ee xt er nal f ac t or s andmi ni mi z enegat i v ei mp ac t .I ns ummar y ,Mc Donal d’ sFi v eFor c esanal y s i sy i e l dst he f ol l owi ngi nt ens i t i esoft hefi v ef or c es :
7. 3. ?. :. C.
Ther es ul t soft heFi v eFor c esanal y s i ss howst hatMc Donal d’ sneedst opr i or i t i z et hei s sues r el at edt oc ompet i t i on,c ons umer s ,ands ubs t i t ut es ,al l ofwhi c hex er tas t r ongf or c eont he c ompan y .Apos s i bl ec our s eofac t i onf orMc Donal d’ st oaddr es st hes ei s s uesi spr oduc t i n no v at i on.Ne w Mc Donal d’ spr oduc t sc anat t r ac tandk e epmor ec us t omer s .Al s o,t hi sFi v e For c esanal y s i ss ho wst hatMc Donal d’ sc ani mpl eme nthi gherqual i t ys t andar dst oaddr es s c ompet i t i onands ubs t i t ut i oni nt hi ssat ur at edmar k et .
Compet i t i veRi val r yorCompet i t i onwi t hMcDonal d’ s( St r ongFor ce) Mc Donal d’ sf ac est oughc ompet i t i onbec aus et hef as tf oodr es t aur antmar k eti sal r eady s at ur at ed.Thi sel ementoft heFi v eFor c esanal y s i st ac k l est heeff ec tofc ompet i ngfi r msi n t hei ndus t r yenv i r onment .I nMc Donal d’ scas e,t hes t r ongf or c eofc ompet i t i v er i v al r yi s bas edont hef ol l owi ngex t er nal f ac t or s : • • •
i!h number of &rms 2stron! force6 i!h a!!ressiveness of &rms 2stron! force6 ;o% s%itchin! costs 2stron! force6
Thef as tf oodr es t aur anti ndus t r yhasman yfi r msofv ar i oussi z es ,s uc hasgl obal c hai nsl i k e Mc Do na l d ’ san dl oc a lmo ma nd p opf a s tf o odr e s t au r a nt s .Al s o ,mo s tmed i u ma ndl ar g e fi r msaggr es s i v el ymar k ett hei rpr oduc t s .I naddi t i on,Mc Donal d’ sc us t omer sex per i enc el ow s wi t c hi ngc os t s ,whi c hmeanst hatt heycaneas i l yt r ans f ert oot herr es t aur ant s ,s uc has Wendy ’ s .Thus ,t hi sel ementoft heFi v eFor c esanal y s i sofMc Donal d’ ss ho wst hat c ompet i t i oni samongt hemos ts i gni fi c ante xt er nal f or c esont hebus i nes s .
Bar gai ni ngPowerofMcDonal d’ sCust omer s/ Buyer s( St r ongFor ce) Mc Do nal d’ smus ta ddr es st hes i gni fi c antpo werofc us t omer s .Th i sel eme ntoft heFi v e For c esa na l y s i sde al swi t ht h ei n fl ue nc ea ndd ema nd so fc o ns u me r s .I nMc Do na l d ’ sc as e , t hef ol l owi ngar et heex t er nal f ac t or st hatc ont r i but et ot hes t r ongbar gai ni ngpowerof b u y e r s : • • •
;o% s%itchin! costs 2stron! force6 ;ar!e number of providers 2stron! force6 i!h availability of substitutes 2stron! force6
Bec aus eoft heeas eofc hangi ngf r om oner es t aur antt oanot her( l ows wi t c hi ngc os t s ) , c us t omer sc aneas i l yi mpos et hei rdemandsonMc Do nal d’ s .I nr el at i on,b ec aus eofmar k e t s at ur at i on,c ons umer sc anc ho os ef r om man yf as tf oodr es t aur ant sot hert hanMc Don al d’ s . Al s o,t her ear emanys ubs t i t ut est ofi r msl i k eMc Donal d’ s .Thes es ubs t i t ut esi nc l udef ood out l et s ,ar t i s anal bak er i es ,aswel l asf oodst hatonec oul dc ookathome.Bas edont hi s el ementoft heFi v eFor c esanal y s i s ,Mc Donal d’ smus tdev el ops t r at egi est oi nc r eas e c us t omerl oy al t y .
Bar gai ni ngPowerofMcDonal d’ sSuppl i er s( WeakFor ce) Suppl i er sal s oi nfl uenc eMc Dona l d’ s .Thi sel ementoft heFi v eFor c esan al y s i ss ho wst he i mpac tofs uppl i er sonfir ms .I nMc Donal d’ sc as e,t heweakbar gai ni ngpowerofs uppl i er si s bas edont hef ol l owi ngex t er nal f ac t or s :
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;ar!e number of suppliers 2%eak force6 ;o% for%ard vertical inte!ration 2%eak force6 i!h overall supply 2%eak force6
Thel ar gepopul at i onofs uppl i er sweak enst heeff ec tofi ndi v i dual s uppl i er sonMc Donal d’ s . Thi si ses pec i al l ys obec aus eoft hel ac kofr egi onal orgl obal al l i anc esamongs uppl i er s .I n r el at i on,mos tofMc Donal d’ ss uppl i er sar enotv er t i c al l yi nt egr at ed.Thi smeanst hatt heydo notc ont r ol t hedi s t r i but i onnet wor kl i nk edt oMc Donal d’ sf ac i l i t i es .Al s o,t her el at i v e abundanc eofmat er i al sl i k efl ourandmeatr educ ess up pl i er s ’ i nfl ue nc eonMc Donal d’ s . Thus ,t hi sel ementoft heFi v eFor c esanal y s i ss howst hats uppl i erpoweri sami ni mal i s s ue f orMc Don al d’ s .
Thr e atofSubst i t ut esorSubs t i t ut i on( St r ongFor c e) Subs t i t ut esar eas i gni fi c antc onc er nf orMc Donal d’ s .Thi sel ementoft heFi v eFor c es anal y s i sdeal swi t ht hepot ent i al effec t sofs ubs t i t ut esonfi r m gr owt h.I nMc Donal d’ sc as e, t hef ol l owi ngex t er nal f ac t or smak et het hr eatofs ubs t i t ut i onas t r ongf or c e: • • •
i!h substitute availability 2stron! force6 ;o% s%itchin! costs 2stron! force6 i!h performance"to"cost ratio 2stron! force6
Ther ear eman ysubs t i t ut est oMc Donal d’ spr oduc t s ,s uc haspr oduc t sf r om ar t i s anal f ood pr oduc er sandl oc al bak e r i es .Cons umer sc anal s oc ookt hei rf oodath ome.I ti sal s oeas y t os hi f tf r om Mc Donal d’ st ot hes es ubs t i t ut es( l ows wi t c hi ngc os t s ) . I naddi t i on,t hes e s ubs t i t ut esar ec ompet i t i v ei nt er msofqual i t yandc ons umers at i s f ac t i on.I nt hi sel ementof t heFi v eFor c esanal y s i sofMc Donal d’ s ,s ubs t i t ut esar eamaj ori s s uet hatt hec ompan y mus tad dr es st hr oughap pr oac hesl i k epr od uc tqual i t yi mpr o v ement .
Thr eatofNew Ent r ant sorNew Ent r y( Moder at eFor ce) Ne we nt r a nt sc ani mp ac tMc Do nal d ’ sma r k e ts ha r e .Th i sel eme ntoft heFi v eFo r c e s anal y s i sr ef er st ot heeffec t sofnewpl ay er sonex i s t i ngfi r ms .I nMc Donal d’ sc as e,t he moder at et hr eatofnewent r yi sbas edont hef ol l owi ngex t er nal f ac t or s : • • •
;o% s%itchin! costs 2stron! force6 Moderate capital cost 2moderate force6 i!h cost of brand development 2%eak force6
Be c au s eoft h el o ws wi t c h i n gc o s t s ,c o ns u me r sc a nea s i l ymo v ef r o m Mc Do na l d ’ st o wa r d newf as tf oodr es t aur antc ompani es .Al s o,t hemoder at ec api t al c os t sofes t abl i s hi nganew r es t aur antmak e si tmod er at el yeas yf ors mal l ormedi ums i z edfi r mst oaff ec tMc Donal d’ s .
Howev er ,i ti sex pens i v et obui l das t r ongbr andt hatc oul dmat c ht heMc Donal d’ sbr and. Thus ,t hi sel ementoft heFi v eFor c esanal y s i ss howst hatt het hr eatofnewent r ant si sa c ons i der abl ei s s uef orMc Donal d’ s .
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0urke, A., van Ktel, A., * Thurik, B. 234746. 0lue ocean vs. &ve forces. Carvard 5usiness 'eview, 112C6, 38"39. Dobbs, M. 2347:6. 1uidelines for applyin! orter’s &ve forces frame%ork) a set of industry analysis templates. >ompetitiveness 'eview, *+276, ?3":C. 1rundy, T. 234456. Bethinkin! and reinventin! Michael orter’s &ve forces model. 4trategic >hange, /?2C6, 37?"339. Maybury, M. T., * 0elardo, K. 27993, anuary6. -ive forces. $n 4ystem 4ciences! /;;*. roceedings of the ,wentyBifth Cawaii 6nternational >onference on 2=ol. :, pp. C@9"C886. $FFF. McDonald’s 347: . Boy, D. 234776. 4trategic Boresight and orter’s Bive Borces. 1B$E =erla!. Jnited Ktates Department of A!riculture Fconomic Besearch Kervice 2347C6. -ood Kervice $ndustry Market Ke!ments .
Mc Donal d’ sMar k et i ngMi x( 4Ps )Anal y s i s Mc Do nal d’ smar k e t i ngmi x( 4Ps )i n v ol v esv a r i edap pr oac hest hatmee tb us i nes sc onc er nsi n di ff er entmar k et sar oundt hewor l d.Themar k et i ngmi xdefi nest hes t r at egi esandt ac t i c sa fi r m us est or eac ht ar getc us t omer s .Mc Donal d’ shasc or por at est andar dst hati t smar k et i ng mi xappl i esgl obal l y .Thec ompan yal s ous ess omev ar i at i onsofi t smar k et i ngmi xt os ui tt he l oc al c ondi t i onsofmar k et s .Fore xampl e,Mc Donal d’ spr omot i onf oc us esonpr i ntmedi ai n c o un t r i e swh er es u c hme di aar emo s tp op ul ar .Thec ompa ny ’ seff ec t i v e ne s si n i mpl ement i ngi t smar k et i ngmi xc ont r i but est ot hel eadi ngper f or manc eoft heMc Donal d’ s br andandbus i nes si nt hei nt er nat i onal f as tf oodr es t aur anti ndus t r y . McDonald’s marketing mi# facilitates e
McDonal d’ sPr oduct s( Pr oductMi x) Mc Do nal d’ sp r o vi desmai nl yf oodandbe v er ag epr oduc t s .Thi sel ementoft hemar k e t i ngmi x c ov er st hev ar i ousor gani z at i onal out put s( goodsands er v i c es )t hatac ompan ypr o vi dest o i t st ar getc us t omer s .Mc Donal d’ spr oduc tmi xhast hef ol l owi ngmai npr oduc tl i nes :
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ambur!ers and sand%iches
Mc Donal d’ si spr i mar i l yk nownf ori t sbur ger s .Howev er ,t hecompan yex pandsi t spr oduc t mi xt hr ought i me.Atpr es ent ,c us t omer sc anpur c has eot herpopul arpr oduc t sl i k ec hi c k en andfi s h,des s er t s ,andbr eak f as tmeal s .Thi sel ementofMc Do nal d’ smar k e t i ngmi x i ndi c at est hatt hefi r mi nnov at esne w pr oduc t st oat t r ac tmor ec us t omer s .
Pl a ce / Di s t r i but i oni nMc Dona l d’ sMa r k et i ngMi x Mc Do na l d ’ sr es t a ur an t sar et h emos tpr omi n en tp l a ce swh er et hec omp an y ’ spr o du c t sar e di s t r i but ed.Thi sel ementoft hemar k et i ngmi xi ndi c at est hev enuesorl oc at i onswher et he fi r m’ spr oduc t sar eoffer ed.Mc Donal d’ smai npl ac esf ordi s t r i but i ngi t spr oduc t sar eas f ol l ows :
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Bestaurants >iosks ostmates %ebsite and app McDonald’s mobile app
Mc Do nal d’ sr es t aur ant sa r ewher et hec ompan ygener at esmos tofi t ss al esr e v enues . Someoft hes er es t aur ant sal s omanagek i os k st os el l al i mi t eds el ec t i onofpr oduc t s ,s uc h asdes s er t s .Somek i os k sar et empor ar y , asi nt hec as esofk i os k sus edi ns eas onal e v ent s andpr of es si onal s por t scompet i t i ons .I naddi t i on,c us t omer scanpl ac et hei ror der st hr ough t hePo s t mat eswe bs i t ean dmo bi l eap p.Mo r e ov e r ,t h ec o mp an y ’ smob i l eap psf o ri OSa nd Andr oi dOSl etc us t omer sc l ai ms pec i al deal sandfindMc Donal d’ sr es t aur antl oc at i ons .Thi s el ementoft hemar k e t i ngmi xs uppor t sMcDonald’s intensive !ro%th strate!ies , es pec i al l ymar k etpenet r at i on.
McDonal d’ sPr omot i on( Pr omot i onalMi x) Mc Donal d’ spr omot esi t spr oduc t st oat t r ac tmor ecus t omer s .Thi sel ementoft hemar k et i ng mi xd efi n est h ea pp r o ac h esu s edt oc o mmu ni c a t ewi t ht h ec u s t o me r s .Mc Do na l d ’ su s est h e f ol l owi ngt ac t i c si ni t spr omot i onal mi x :
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Advertisin! Kales promotions ublic relations Direct sellin!
Mc Do na l d ’ sadv e r t i s e me nt sar et h emo s tn ot ab l ea mo ngi t spr o mo t i o nt a c t i c s .Th ec o mp an y us esTV,r adi o,pr i ntmedi aandonl i nemedi af ori t sadv er t i s ement s .Mc Donal d’ sal s ous es s al espr omo t i onst odr a w mor ec us t omer st oi t sr es t aur ant s .Fore x ampl e,t hec ompan y offer sdi s countc ouponsandf r eebi esf orc er t ai npr oduc t s .I naddi t i on,Mc Donal d’ spubl i c r el at i onsac t i v i t i eshel ppr omot et hebus i nes st ot het ar getmar k et .Fori ns t anc e,t heRonal d Mc Do na l dHo us eCh ar i t i e sa ndt h eMc Do na l d ’ sGl o ba lBe s to fGr e ene nv i r o nme nt a l pr ogr am s uppor tc ommuni t i eswhi l eboos t i ngt hev al ueoft hecor por at ebr and.Oc c as i onal l y , t hec ompanyus esdi r ec ts el l i ng,s uc hasf orc or por at ec l i ent el e,l oc al gov er nmentor c ommuni t yev e nt sandpar t i es .I nt hi sel ementofi t smar k e t i n gmi x ,Mc Do nal d’ semphas i z es adv er t i s i ngasi t smai nappr oac ht opr omot ei t spr oduc t s .
McDonal d’ sPr i cesandPr i ci ngSt r at egy Mc Donal d’ spr i c i ngs t r at egyi nv ol v espr i c ebundl i ngc ombi nedwi t hps y chol ogi c al pr i c i ng.I n pr i c ebundl i ng,t hec ompan yoff er smeal sandot herpr oduc tbundl esf oradi s c ount .I n ps y chol ogi c al pr i c i ng,Mc Donal d’ sus espr i c est hatappeart obesi gni fi cant l ymor e affor dabl e,s uc has$__. 99i ns t eadofr oundi ngi tofft ot henear es tdol l ar .Thi sel ementof Mc Donal d’ smar k et i ngmi xhi ghl i ght st hei mpor t anc eofpr i c ebundl i ngt oenc our age c u s t o me r st ob uymo r ep r o du c t s .
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Dominici, 1. 234496. -rom marketin! mix to e"marketin! mix) a literature overvie% and classi&cation. 6nternational )ournal of 5usiness and Management , +296, 7@"3:. 1oi, <. ;. 234496. A revie% of marketin! mix) :s or more/ 6nternational )ournal of Marketing 4tudies, /276, 3. McDonald’s ., Fmamisaleh, >., * Nade!ari, B. 2347C6. Luality -unction Deployment and Ee% roduct Development %ith a focus on Marketin! Mix : model. %sian )ournal of 'esearch in Marketing, +236, 98"748.
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=an Haterschoot, H., * =an den 0ulte, <. 279936. The : classi&cation of the marketin! mix revisited. ,he )ournal of Marketing, 8?"9?. Nun"shen!, H. 234476. erfection and innovation of : Marketin! Mix O o% to evaluate : Marketin! Mix. >ommercial 'esearch , ?, 5.
Mc Donal d’ sPESTEL/ PESTLEAnal y s i s& Rec ommendat i on Mc Do nal d’ sCor p or at i on ’ ss t r at egi esad dr es si s s uesi dent i fi edi nt hi sPESTEL/ PESTLE anal y s i s .Th ePESTEL/ PESTLEanal y s i smodel de t er mi nest hev ar i ousex t er n al f ac t or st hat pr es entoppor t uni t i esort hr eat st ot hebus i nes s,bas edoni t sr emot eormac r oenv i r onment . I nt hegl obal f as tf oodr es t aur antmar k et ,Mc Donal d’ si sf oc us edonec onomi cand s oc i oc ul t ur al f ac t or s .Nonet hel es s,t hec ompany ’ ss uc ces si si ndi c at i v eofi t seffec t i v e s t r at egi est odeal wi t hal l ofs uc hex t er nal f ac t or s .Ast hebi gges tf as tf oodr es t aur antc hai n i nt hewor l d,Mc Donal d’ smus tk eepadapt i ngi t ss t r at egi esbas edont hec ondi t i onsofi t s i ndus t r yen vi r onment .
,his (4,(AE(4,A( analysis of McDonald’s shows that there are many opportunities and considerable threats that the 3rm must address to keep its viability in the rapidly changing global economy.
Pol i t i calFact or sAffect i ngMcDonal d’ sBusi ness Mc Donal d’ scons i der st hei mpac t soft hepol i t i c al env i r onmentoni t si ndus t r y .Thi sas pec tof t hePESTEL / PESTL Ea na l y s i sr ef er st ot h ee ffe ct sofg ov e r n me nt a lac t i o no nt h er e mo t eo r mac r oenv i r onmentofbus i nes s es .I nMc Donal d’ scas e,t hemos ts i gni fi c antpol i t i c al e xt er nal f ac t or sar easf ol l ows :
7. 3. ?.
$ncreasin! international trade a!reements 2opportunity6 endin! tax reform 2opportunity6 Fvolvin! public health policies 2threat and opportunity6
Mc Donal d’ shast heoppor t uni t yt oex pandi t sbus i nes sbas edoni mpr ov edi nt er nat i onal t r ade,whi c hc anenhanc eg l obal s uppl ychai ns .Mc Donal d’ sal s ohast heoppor t uni t yt o r ef or mi t spr ac t i c esands t r at egi est ol es sent hei mpac toft ax at i onont hebus i nes swi t hout v i ol at i ngt hel aw.Howev er ,publ i cheal t hpol i c yi nc r eas i ngl yt endst odi s cour agepeopl ef r om c o ns u mi n gf as tf o od sf r o mfi r msl i k eMc Do na l d ’ s .No ne t h el es s ,t h ec o mp an yh ast he oppor t uni t yt oaddr es st hi sex t er nal f ac t orbyi mpr ov i ngt heheal t hf ul nes sofi t spr oduc t s .I n t hi sas pec toft hePESTEL/ PESTLEanal y s i sofMc Donal d’ s ,t hepol i t i c al e xt er nal f ac t or s pr es entoppor t uni t i est hatout wei ght hr eat s .
Economi cFact or sI mpor t antt oMcDonal d’ s Ec o no mi cc h an ge sar ou ndt hewor l di n fl ue nc eMc Do na l d ’ si n du s t r ye nv i r o nme nt , c ons i der i ngi t sgl obal nat ur e.Thi sas pec toft hePESTEL/ PESTLEanal y s i sper t ai nst ot he eff ec t sofec onomi cc ondi t i onsandt r endsont her emo t eormac r oen vi r onme ntoffi r ms .I n Mc Donal d’ sc as e,t hef ol l owi ngar et hemos tnot abl eec onomi cex t er nal f ac t or s :
7. 3. ?.
Klo% but stable !ro%th of the J.K. economy 2opportunity6 Ktable but risky Furopean economies 2threat6 Klo%do%n of the
Mc Do nal d’ shast heoppor t uni t yt ogr o w,e v ens l o wl y , i nt heAmer i c anec onomy , whi c hi st he fi r m’ sbi gges tmar k et .Howev er ,t hec ur r entec onomi cc ondi t i onsi nEur opec oul dt hr eat en Mc Do nal d’ sg r o wt hi nt her egi on.Al s o,t hes l o wdo wnoft heChi nes ee conomyt hr eat enst he c o mp an y ’ sgr o wt hi nAs i a.I nt hi sas pe c toft h ePESTEL / PESTLEan al y s i sofMc Don al d’ s , t heec onomi ce xt er nal f ac t or smai nl yt hr eat ent hebus i nes s .
Soci al / Soci ocul t ur alFact or sI nfluenci ngMcDonal d’ sBusi nessEnvi r onment Mc Do nal d’ smus tr es pondt os oc i oc ul t ur a lc hangesi ni t sr emot eormac r oen vi r onment .Thi s as pec toft hePESTEL/ PESTLEanal y s i sr ef er st ot hes oc i al c ondi t i onst hats uppor torl i mi t bus i nes ses .I nMc Donal d’ scas e,t hemos ts i gni fi cants oc i oc ul t ur al ex t er nal f ac t or sar eas f ol l ows :
7. 3. ?.
Hidenin! %ealth !ap 2opportunity6 $ncreasin! cultural diversity 2opportunity6 ealthy lifestyle trend 2threat * opportunity6
Bas edont heex t er nal f ac t oroft hewi deni ngweal t hgap,Mc Donal d’ shast heoppor t uni t yt o gr owbecauset hecompany’ st ar getconsumer sar emost l yf r om medi um andl owi ncome hous ehol ds .Al s o,Mc Donal d’ shast heoppor t uni t yt oi mpr ov ei t spr oduc t smi xt os at i s f ya mor edi v er s et ar getmar k et .Howev er ,t heheal t hyl i f es t y l et r endi sat hr eatbec aus emanyof Mc Donal d’ spr oduc t sar eof t enc r i t i c i z edf ort hei rnegat i v eheal t heffec t s .Nonet hel es s,t he c ompanyhast heoppor t uni t yt oi mpr ov et heheal t hf ul nes sofi t spr oduc t s .I nt hi sas pec tof t hePESTEL/ PESTLEanal y s i sofMc Dona l d’ s ,t hes oc i al e x t er nal f ac t or sc r eat emos t l y oppor t uni t i esf orbus i nes sdev el opment .
Technol ogi calFact or si nMcDonal d’ sBusi ness Mc Donal d’ ss uc c es spar t l ydependsont ec hnol ogi c al appl i c at i ons .Thi sas pec toft he PESTEL/ PESTLEa nal y s i sper t ai nst ot hei mpac toft ec hnol ogi esandr el at edt r endsont he
r e mo t eo rmac r oe nv i r o nme nto fc o mp ani es .Mc Do nal d’ smus ta ddr e s st h ef ol l o wi ng t ec hnol ogi c al ex t er nal f ac t or s :
7. 3. ?.
Moderate B*D activity in the industry 2opportunity6 $ncreasin! business automation 2opportunity6 $ncreasin! sales throu!h mobile devices 2opportunity6
Mc Do nal d’ shast heoppor t uni t yt oi nc r eas ei t sr es ear c handde v el opmenti n v es t ment st o i mpr o v eb us i n es seff ec t i v e nes san de ffic i e nc y .Al s o ,Mc Do nal d ’ sc ana pp l ymor eaut omat i o n t omax i mi z epr oduc t i v i t y ,bas edont heex t er nal f ac t orofi nc r eas i ngbus i nes saut omat i on. Fur t her mor e,Mc Donal d’ sc ani mpr o v ei t smobi l es er v i c est ot apmor ec ons umer sv i ai t s webs i t eormobi l eapp.I nt het ec hnol ogi c al as pec toft hePESTEL/ PESTLEanal y s i s , Mc Donal d’ shasmaj oroppor t uni t i esf orgr owt h.
Ec ol ogi c al / Env i r onme nt a lFa ct or s Ec ol ogi c al e x t er nal f ac t or saff ec tMc Donal d’ sco ns umer sand,t hus ,t hec ompan y ’ s p er f o r ma nc e .Th i sas pe c to ft h ePESTEL/ PESTL Ea na l y s i sr e f er st ot heen v i r o nme nt a l i s s uesi nfi r ms ’ r emot eormac r oenv i r onment .I nMc Donal d’ si ndus t r y , t hef ol l owi ngar et he mos ts i gni fi cantec ol ogi c al ex t er nal f ac t or s :
7. 3. ?.
Bisin! interest for corporate environmental pro!rams 2opportunity6 $ncreasin! emphasis on sustainable business strate!ies 2opportunity6
McDonal d’ scanexpandits corporate social responsibility strate!ies t or ea c he v en hi ghper f or manc ei naddr es s i ngen vi r onment al c onc er ns .Ho we v er ,c l i mat ec hanger emai ns at hr eatbec aus eofi t snegat i v eeff ec t sonf ar msand,t hus ,Mc Donal d’ ssuppl ychai n.I nt hi s as pec toft hePESTEL/ PESTLEanal y s i s ,t heec ol ogi c al e xt er nal f ac t or shi ghl i ghtc or por at e s oc i al r es pons i bi l i t yoppor t uni t i es ,al t houghMc Donal d’ sal s oneedst of ur t herdi v er s i f yi t s s uppl yc hai nt oaddr es st heeff ec t sofc l i mat ec hange.
Le ga lFa ct or s Mc Do nal d’ smus tf ol l o wl egal r equi r ement si mpos edoni t sr emo t eormac r oen v i r onment . Thi sas pec toft hePESTEL/ PESTLEa nal y s i sper t ai nst ot hei mpac tofl a wsorr egul at i ons onfi r ms .Themos ts i gni fi cantl egal ex t er nal f ac t or sf orMc Donal d’ sar easf ol l ows :
7. 3. ?.
Ee% le!al minimum %a!e levels in the J.K. 2threat6 ;ocal health re!ulations in %orkplaces and schools 2threat6 Animal %elfare re!ulation 2threat * opportunity6
Mc Do nal d’ sf ac est het hr eatofhi g hermi ni mum wages ,wh i c hl eadt ohi gherc os t sand pr i c es .Al s o,l oc al heal t hr egul at i onsi mpac t i ngf oods er v i c ei nwor k pl ac esands chool s c oul dr educ et hecompan y ’ sr e v en uesf r om t hes ear eas .I nadd i t i on,Mc Donal d’ smus t addr es sani mal wel f ar er egu l at or yeff ec t so ni t ssuppl yc hai n.Fore x ampl e,t hec ompan y c a ni mpl eme ntne wp ol i c i e st oen s ur eani ma lwe l f ar eamo ngme atpr o duc e r s .Mc Do na l d ’ s f ac esmai nl yt hr eat sbas edonl eg al e xt er nal f ac t or si nt hi sas pec toft hePESTEL/ PESTLE anal y si s .
McDonal d’ sPESTEL/ PESTLEAnal ys i s–Recommendat i ons Th i sPESTEL / PESTL Ea na l y s i sofMc Do na l d ’ sCo r p or a t i o ns h owst ha tt h er ea r es i g ni fi c an t oppor t uni t i esf orbus i nes sgr owt h.Thec ompanycanc api t al i z eont ec hnol ogi c al s t r at egi est o enhanc eeffic i enc yandpr od uc t i v i t y .Mc Donal d’ sc anal s oi mpr o v epr oduc tqual i t yt oaddr es s s oc i oc ul t ur al andpol i t i c al ex t er nal f ac t or saboutheal t h.Thi sPESTEL/ PESTLEanal y s i sal s o i n di c at est hatt hec ompan ymus tdeal wi t hanumberofs i gni fi c antt hr eat s .Mc Donal d’ sc an addr es sec onomi cex t er nal f ac t or sbyex pan di ngi nt oo t herhi ghgr o wt hec onomi es ,s uc has Sout heas tAs i anc ount r i es .
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1illespie, A. 2344@6. FKTF; analysis of the macro" environment. Boundations of (conomics! O#ford Fniversity ress! F4% . ousin! $ndustry Association 234776. %n 6ntroduction to (4,A( %nalysis. $A ;td. McDonald’s 347: . Murphey, M., * 1ause, B. 279@:6. J<- Besearch 1uides. $ndustry Analysis. FKT;F Analysis. 5usiness Cori8ons, /02C6, 3@"?8. Boper, >. 23473, Eovember6. 0$M $mplementation) FKTF; Drivers * 0arriers 2
McDonal d’ sOper at i onsManagement ,10 Dec i s i ons ,Pr oduc t i v i t y Mc Do na l d ’ sCo r p or a t i o n’ sope r a t i o nsma na ge men t( OM)s up po r t st heco mpa ny ’ spo s i t i o n ast hel ar ges tf as tf oodr es t aur antc hai ni nt hewor l d.The10dec i s i onsofoper at i ons managementr epr es entt hev ar i ouss t r at egi car easofoper at i onst hatmus tbecoor di nat ed f oropt i mal pr oduc t i v i t yandper f or manc e.Mc Donal d’ sgl obal bus i nes sent ai l sawi dev ar i et y ofs t r at egi cneedsf ori t soper at i onsmanagement ,s uc hass t r at egi cHRM an ds uppl yc hai n de v el opment .Mc Donal d’ sal s onee dst oaddr es st hei mpac t soft oughc ompe t i t i onwi t hfir ms l i keSubway ,KFCandWendy’ s . T odos o,Mc Donal d’ smus tappl ys ui t abl epol i c i esand s t r at egi esi nal l t he10dec i s i onar easofoper at i onsmanagement .
McDonald’s maintains e
McDonal d’ sOper at i onsManagement ,10Deci si onAr eas /0 Design o$ Goods and Services.Mc Donal d’ sgoal i nt hi sst r at egi cdec i s i onar eaof oper at i onsmanagementi st opr o vi deaff or dabl epr od uc t s .Ass uc h,t hes er v i ngs i z esand pr i c esofi t spr oduc t sar ebas edont hemos tpopu l arc ons umere x pec t at i ons .Ho wev e r , s o meMc Do na l d ’ spr o du c t sar emi n i mi z e di nsi z et oma k et h em mo r eaff or d ab l e .
10 2!alit# Management.Thec ompan yai mst omax i mi z epr oduc tqual i t ywi t h i n c ons t r ai nt s ,s uc hasc os t sandpr i c el i mi t s .Mc Donal d’ sus esapr oduc t i onl i nemet hodt o mai nt ai npr oduc tqual i t yc ons i s t enc y .Cons i s t enc ys at i s fi esc ons umer s ’ e xpec t at i onsabout Mc Donal d’ sandi t sbr andi nt hi ss t r at egi cdec i s i onar eaofoper at i onsmanagement . 30 Process and *aacit# Design.Mc Donal d’ spr oc es sandc apac i t ydes i gni s c ent er edoneffic i enc yf orc os t mi ni mi z at i ont hats uppor t st hecompany’s strate!ies .Thi s s t r at egi cdec i s i o nar eaofoper at i o nsmanagementf oc us esonma i nt ai n i ngpr oc es s effic i enc yandadequat ec apac i t yt of ul fi l l mar k etdemand.AtMc Donal d’ s ,t hepr oduc t i onl i ne met hodmax i mi z eseffic i enc yandc apac i t yut i l i z at i on. 40 +ocation Strateg# .Mc Donal d’ sgoal i nt hi sst r at egi cdec i s i onar eaofoper at i ons man ag eme nti st oes t a bl i s hl o c at i o nsf orma x i mu m ma r k e tr e ac h.McDonald’s marketin! i nc l udesr es t aur a nt s ,k i os k s ,a ndt hec ompan y ’ swebs i t ea ndmobi l eappasv enues . mix Thr ought hes el oc at i ons / v enues ,Mc Donal d’ sr eac hesc us t omer si nt r adi t i onal andonl i ne way s. 50 +a#o!t Design and Strateg# .Mc Donal d’ sus espr ac t i c al i t yf ort hi sdec i s i onar ea ofoper at i onsmanagement .Thes t r at egyi nv ol v esmax i mi z i ngs pac eut i l i z at i oni n r es t aur ant sandki os k s,r at hert hanf oc us i ngoncomf or tands pac i ous nes s . 60 7o% Design and !man Reso!rces .Mc Donal d’ sh uma nr es our c es t r at egi es i nv ol v et r ai ni ngf ors ki l l sneededi nt hepr oduc t i onl i nei nr es t aur antk i t c hensorpr oduc t i on ar eas .Fort hi sdec i s i onar eaofoper at i onsmanagement ,i ndi v i dual andor gani z at i onal l e ar ni ngar eal s oemph as i z edt os uppor tMcDonald’s or!aniational culture . 80 S!l# *hain Management.Thefi r m’ sgl obal s uppl ychai ns uppor t si t sv ar i ous l oc at i onsar oundt hewor l d.Mc Donal d’ shasas t r at egyofs uppl ychai ndi v er s i fi cat i onf ort hi s
dec i s i onar eaofoper at i onsmanagement .Suc hs t r at egyi nv ol v esget t i ngmor es uppl i er s f r om di ff er entr egi onst or educ eMc Donal d’ ss uppl yc hai nr i s k s. 90 Inventor# Management.Mc Donal d’ sgoal f ort hi sst r at egi cdec i s i onar eaof oper at i onsmanagementi st omi ni mi z ei nv ent or yc os t swhi l es uppor t i ngr es t aur ant oper at i ons .Thec ompanydoesnotdi r ec t l ys el l pr oduc t sandi ngr edi ent st oi t sr es t aur ant s . I ns t ead,l oc al andr egi onal i nt er medi ar i esanddi s t r i but or sc oor di nat ewi t hMc Donal d’ s r es t aur antmanager st omanaget hei ri n v ent or y . :0 Sched!ling.Mc Donal d’ sus esc or por at econv ent i onsf ors c hedul i ng,bas edonl oc al mar k e tc ondi t i onsan dl a ws ,aswel l ass uppl yc hai nneeds .Fore x ampl e,t hec ompan y’ s s t r at egyi nv ol v esr egul arands eas onal s chedul est oaddr es sfluc t uat i onsi nl oc al mar k et demand.Thus ,i nt hi sdec i s i onar eaofoper at i onsmanagement ,Mc Donal d’ si sfl ex i bl eand adapt st ol oc al mar k etc ondi t i ons . /;0 Maintenance.Mc Donal d’ sl et sr es t aur antmanager sorf r anc hi s eessel ec t mai nt enanc es er v i c epr o vi der s .Howev er ,f ork i t c hen/ pr oduc t i onequi pment ,Mc Donal d’ s Cor por at i onal s ohasc er t i fi ed/ appr o v edmai nt enanc epr o v i der s .Thus ,t hec ompan y addr es s est hi ss t r at egi cdec i s i onar eaofoper at i onsmanagementt hr oughl oc al and c or por at ec ont r ol .
Pr oduc t i v i t ya tMc Dona l d’ s I nt he10s t r at egi cdec i s i onsofo per at i onsman agement ,Mc Donal d’ swor k st owar d max i mum pr oduc t i v i t yi nal l ofi t sbus i nes sar eas .Thef ol l owi ngar es omenot abl e pr oduc t i v i t ymeas ur esorc r i t er i aus edi nMc Donal d’ sbus i nes s :
7. 3. ?.
Irder ful&llment rate 2McDonald’s restaurant productivity6 Ktockout rate 2$ntermediarydistributor productivity6 Timely delivery rate 2McDonald’s delivery productivity6
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;a%rence, >. D., * Heindlin!, . $. 279846. Multiple !oal operations mana!ement plannin! and decision makin! in a #uality control department. $n Multiple >riteria Decision Making ,heory and %pplication 2pp. 34?"37@6. Kprin!er. ;iu, K., * ian!, M. 234776. roviding (9cient Decision 4upport for $reen Operations Management= %n 6ntegrated erspective . $ETF<. McDonald’s 347: . Ea'da%i, M. >.,
