MGT-450 STRATEGIC MGT

McDonald's
Presented by
Nargis Mohammadi
Mariam Najeebullah
Dr. Robert J Ritchie

Nilofar Najeebullah
Introduction
• McDonald's the biggest fast-food chain
• Founded in 1948 by two brothers Maurice and
Richard McDonald's in California
• First franchise in 1995 at Des Plaines
• Run 36,000 restaurants in 117 countries since
1955
• Serving 69 Million people every day
worldwide
• 4,000,000 employees
Competitors Identification
• As a self-service restaurant has many
competitors like Subway, KFC, etc.
• The biggest asset is the branded name
• Pricing strategy, suitable cost

• Fast delivery
• Availability
• Affordability
Industry Analysis

S T R AT E G I C G R O U P :
• Pizza Hut
• Burger King
• KFC
• Wendy’s
• Subway
McDonald's
Business model

• Heavy Franchised
• As of 2018, the company had 93% of total
restaurants as franchising
• Its long-term target is 95% of franchised
restaurants worldwide
• Make food fast available to its customer
Five Force Model
Rivalry Among Existing Competitors, High
• Very similar products in the Fast Food industry
• High Competitors
• Advertising Capabilities
• Location of outlets are close ex, KFC, Chick-fil-A, Burger King, Starbucks.

Threat of New Entrance, Moderate

• Easy to enter, low setup cost
• Lack of ability to compete with MCD (cost efficiency, customer awareness)

Threat of Substitutes, Moderate

• Customer can easily switch to low cost
Five Force Model
Power of Suppliers, Low
• World's largest restaurant chain in sales
• High bargaining power over its suppliers (volume)
• Low power of suppliers—Lower the cost of raw materials and High competitive price

Pow er of Buyers, Low

• Less chances of switching, the high brand image through differentiation and uniqueness
• Suitable Price
• Fast Delivery
• Worldwide Provider
Analysis of Macro Environment

Political/Legal Economic Forces

Forces
• Governmental guidelines for • Slow but stable growth of
diet and health (threat) developed countries
• Increased international trade (opportunity)
agreements (opportunity) • Rapid growth of developing
• McDonald’s must adhere to countries (opportunity)
many legal requirements
Analysis of Macro Environment

Social Forces Te c h n o l o g i c a l
Forces
• Busy lifestyles in urban areas • Moderate R&D activity
(opportunity) • Increasing comfort levels with
• Increasing cultural diversity technology
(threat & opportunity) • Automation to maximize
productivity
Financial Position

• Total Asset increased by $14.7

billion in 2019
• Debt obligations totaled $34.2
billion in 2019
0.5
Profitability
0
Ratio
-0.5

Return on Equity
-1

-1.5 Return on Assets

-2
Profit Margin

-2.5
2016 2017 2018 2019
 Liquidity Ratio
2016

2017

Current Ratio

2018
Quick Ratio

2019 Cash Ratio

0 1 2 3 4 5
Analysis of Organization
MISSION
“to be our customers’ favorite place and way to eat and drink.”

VISION
“to move with velocity to drive profitable growth and become an even better
McDonald’s serving more customers delicious food each day around the world.”

C O R E VA L U E S
Serve Inclusion Integrity Community Family

CORE COMPETENCIES
Providing convenience when people need and want to eat fast food at prices that are
competitive and provide the best value for the customer's money.
• Secret Recipe
• Core intellectual assets
• Product line enhancements
• Strong value chain
• Appraising resources and capabilities
Organization Level
Strategies

1 . C O R P O R AT E L E V E L S T R AT E G Y

• Expansion strategy
2 . B U S I N E S S L E V E L S T R AT E G Y
• Franchising
• Adaptation strategy • Value for money
• Customer service
• Menu Standardization
• Digital Marketing
• Breakfast menu
Organization Level
Strategies

3 . F U N C T I O N A L L E V E L S T R AT E G Y

• Marketing
• Finance
• Operations
• Purchasing
• Human Resources
 STRENGTHS WEAKNESSES
• A well-known brand name • Unhealthy and calorie-heavy food menus
• Largest market share • Lack of product innovation and low
• Strong positioning differentiation
• Food quality with value for money • High employee turnover
SWOT ANALYSIS

• Customer engagement and customer • Unsatisfied franchisees

services ·
·

O P P O RT U N I T I E S T H R E AT S
• Expansion in Asian countries • Increasing competition
• Demand for healthier menu items • Increased health consciousness and trend
• Demand for breakfast items towards healthier food
• Partnership with other brands • Presence of local fast-food restaurants at
• Marketing opportunities based on lower prices
customer demographics
·
MD's improvement /change
initiatives

• SIX SIGMA
• Critical to quality: GMP
• Defect
• Process Capability
• Variation
• Stable Operations
• Design for Six Sigma
MD's improvement /change
initiatives
2. TQM

3 . L E A N M A N U FA C T U R I N G
• Standardization
• A Production Process Approach
• Just in Time (JIT)
• Flexible and Multi-skilled Workforce
• Lean Production
Conclusion
/Future
• Digital menu and self- order Kiosk
• Designed car parking area
• Order through mobile
• Expand counters
 MGT-450 STRATEGIC MGT

Thank You! :)