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Strategic Case Study

strategic analysis for McDonalds Corporation

l Executive summary

Findings

The strategies identified new organic products and more funds for research and development of new products are equally essential for the growth of the business. The development of new products and services through research enables the entity to have a competitive advantage by having products, which are better suited to compete with other products. Competition proves to be a major challenge with specific reference to entities in the market who have taken up a healthy product approach. This prompts the organization to change with the changes as a learning organization, which learns, from its mistakes and for other players in the market in relation to the provision of appropriate products.

Competition against the entity was witnessed in various ways prompting the organization to perform analyses on how it would maximize its strengths to use its opportunities for the reduction of the threats by minimizing the risks. New products would ensure that the organization would be promised a new market thus new source of revenue for the entity. In addition, these new revenues would enable the entity to improve on its weaknesses, which could include new competition from new products within the market, which are offered at considerably lower prices. Lower prices are a major factor in selection of commodities by the consumers within a market in that consumers are attracted to consumers with lower prices.

In addition, quality of product is an attraction for consumers despite the presence if high or low costs. This is because people are willing to part with adequate money with the guarantee that the products purchased are of high quality. Other factors determine the market fundamentals and the presence of competition. Such factors include consumer habits and levels of poverty within a market. In addition, GDP of a market or country also influences the levels of poverty, consumer habits, and disposable incomes within a market. Labor costs also influence the price formula due to the presence of adequate or inadequate incomes within a society in that the earnings of people within the society influence the purchasing power, consumption levels within the market which in turn influences the sales level of an entity. hence McDonald formulate strategies with the outlined scenarios in mind such that it is bale to have precise estimations of the expected returns and the costs to be incurred in the market for the effective and efficient execution of strategies for the overall growth of the entity.

Recommendations

The entity should ensure that implementation of the said strategies is in line with the organizational goals and objectives. This enables entities to form new and better approaches for implementing strategies sufficiently. In addition, adequate resources such as labor, funds, knowledge and equipment are vital for execution of these strategies if an entity is to succeed in its efforts to have more consumers and increase the levels of efficiency and sales.

Evaluation is one of the most basic considerations in the execution or implementation of strategies within and by an entity. Evaluation means the appraisal or assessment of the effects, means and all surrounding aspects in the execution of the strategies. Such might include negative effects such as cost overruns, inadequate resources to cater for the efficient and effective implementation of strategies by an entity.

New products or entry into a new market with new line of products is bound to be met by numerous challenges within any market. Hence, for successful entry into a new market with new products requires the appropriate marketing fundamentals.

l strategic analysis

Company Background

The tremendous growth of the entity can be described as a drive towards the aspects of perfection through the production line processes. This has enabled the entity to accrue public goodwill because of their high standards of service delivery and unrivaled quality products within the restaurant industry (Hitt, Ireland, &Hoskisson, 2011). The increased demand for the entity’s products saw global sales increase by 5.6% for the ninth consecutive financial period: this could be translated as 50.4% increase in sales volume for the past nine years. Hence, the organizational strategies have been favorable towards the growth of the entity.

The organization should seek new ways of reaching new markets and the provision of new services and products to the different age brackets. The organizational successes can be attributed to the favorable market conditions within the different demographic markets. For instance, in the United States, the entity saw more than 350 million customer visits in its entities. In Europe, consumer demand increased to account for about 40% of its total revenues, and other destinations such as Asia, Middle East and Africa doubling their sales volumes with specific reference to the financial period ended 2011.

The ability of the organization to achieve its goals was influenced by two main factors; ‘Plan to Win’ approach and the focus on the Five P’s of marketing. The tow parts enabled the organization to increase its foothold in the various markets which it has a strong foundation. The same approach enabled the organization to penetrate the new markets and attract new consumers. In addition, the growth was driven by the presence of a strong brand, which consumers can identify irrespective of societal classes. On the other hand, the brands produced proved to be favorable within the different consumer age brackets.

In essence, diversification proved to be a strong point in that, despite the global trend of losses within numerous multinational entities the organization was able to attain and maintain consistency in supply, price and quality of the product and services given to its customers. In addition, consumer satisfaction proved to be a major element hence the formation of the different product brands such as Big Mac, Chicken McNuggets and French Fries. The new emerging economies and developing economies enabled an increase in the values of the shareholder investment as it enforced diversity via new branches within the different regions around the world.

To remain effective and relevant in the restaurant industry diversity and introduction of new products proved to be the ultimate skill to ward off competition and maintain relevance within the restaurant industry. New healthy products were relevant for consumers who have an increased awareness for healthy food products like healthy foods with low cholesterol and calories.

Accessibility of the entity branches within the different regions enhanced its growth because people found it easy to makes purchase in the McDonald entity. Location is part of the 5 P’s of marketing as it influences the purchasing habits of the consumers. Proximity of the location towards areas with high numbers of people enables people to access the branches and make purchases with utmost ease and convenience. Convenience for a customer is among the first quality of a suitable consumer outlet because they are able to save time, which translates to savings on money. The company also has a specific focus on consumer issues to ensure a high degree of consumer satisfaction.

The entity also provides a conductive environment for its restaurant managers and restaurant workers who are 1.7 million individuals in the 33,000 branches, which are spread across the world. It has a system, which is made up of those who are responsible for the entity operations as well as suppliers of products who facilitate the provision of quality supplies. The system is known as the Three-Legged Stool, which comprises of owners/operators, suppliers and the entity employees who are the drivers of the entity operations and growth. All of these aspects contribute to the provision of quality food and services in that the highly skilled staff facilitates the preparation of high quality foods, which ward of fierce competition, form other entities within the food industry.

The entity’s iconic brands have set a precedent in the provision of unrivaled and highly innovated products with specific reference to the McCafe Latte, McCafe Espresso, BigMac, FrenchFries, and McChicken Nuggets. Consumers tell of quality by the presentation of a brand thus they are able to determine the quality of a product within its first impression.

Marketing is a great influence in determining the competitiveness of an entity in that the presentation of the firm’s products and services is driven by the need to gain competitive advantage over other market players in an identical field and position. Competitiveness, on the other hand, is instigated by the dedicated individuals who are evaluated based on competency and the skills they possess to improve the financial position of an entity through the strong marketing strategies. The leadership within the entity focuses on improving their leadership skills. Such skills are improved by becoming proactive in that, they form individual opinions and are responsible for their actions whether negative or positive. In addition, the leadership and executives within the entity focus on the end or the results of the projects initiated towards attaining competitive advantage over other similar entities within the market.

The Plan to Win approach within the entity is framed from the attributes of the decisive and determined executives who are focused on achieving the best results for the entity. The leadership only settles for results, which are the best by focusing and planning adequately to achieve such results. Planning in essence is important in the achievement of the best results by incorporating synergy across the system of suppliers, employees, stakeholders and management or leadership within the entity (Langley et al, 2009).

The organization could be described as a learning organization. This is because, since its inception with the sale of barbecue products, it has transformed to include numerous products by learning from past mistakes and the market trends to ensure consumer needs are met. In addition, as a learning organization, the flexibility in terms of offering new products and taking such risks with new, innovative products enables constant evaluation of products within the market in that each product is evaluated on its own contributions to the market. Systems thinking and synergy is part of organizational learning as it enables the innovative learning in the operations of the entity. This includes how the entity conducts its daily operations (Covey, 2003).

Company Mission and Vision

–Current Mission Statement

On the other hand, McDonald’s brand mission is to become the customer’s favorite place to eat. The worldwide operations are aligned with the global strategy of ‘Plan to Win’, to ensure that the customer has an exceptional experience embedded in the 5 P’s of marketing: Product, Price, People, Place and Promotion aimed are set to contribute to the enhancement of the consumer experience by the provision of exceptional service and quality products.

–Mission Statement Assessment

The company’s mission is a clear indication of how seriously the entity values its community and surroundings. This is an illustration of a responsible corporation, which is not bent and driven by the mere need to accrue numerous profits at the expense of the community, which it gets its income. This is a sensible approach because the same community if given the right products will be able to purchase goods from McDonalds preferably when they in their right health and state of mind. In addition, it is a show of professionalism and the high standards of operation and organizational conduct. It is ethically and morally necessary for entities to ensure that they contribute to the formation of a better society through their products to influence their consumers and employees who are part of the society.

–Proposed Mission Statement

McDonald’s mission is to evaluate continuously and improve their social and environmental performance by ensuring that there is cooperation between its independent restaurant franchises and suppliers towards the development of a sustainable future for both the entity and the communities, which the entity thrives.

–Current Vision Statement

The vision of McDonald is to end hunger through one meal at a time by the provision of low cost high quality nutritional food around the world. The organization also has a corporate responsibility of ensuring that the welfare of the stakeholder, the suppliers the shareholders and consumers, to whom the organization attributes its success and growth in the society, is given a first priority. Hence, it is paramount for the organization to ensure that it is involved in ethically and morally upright conduct in the provision of its services and products. Moreover, it should uphold high quality standards in the production and provision of its products and services

–Vision Statement Assessment

The organization is bent on ensuring that the needs of consumers are met first hand and that all social aspects are put into consideration. In addition, the social responsibility for McDonald’s lies in the provision of quality food, in the presence of health issues emanating from many calories. Hence, the organization has been prompted to adopt a healthy approach to maintain its relevance within the market.

–Proposed Vision Statement

The organization will in the future adopt a healthy approach coupled by the presence of other types of foods and beverages in order to diversify its products and markets in the face of numerous global financial troubles.

External Assessment

–EFE Matrix

0-1 weight where 0 = least important and 1= most important.

A rating of 1-4 will also be incorporated.

In this case, 4 = extremely good, 3 = Good, 2 = Average and 1 = poor, in relation to the efficacy of the strategy in place. Average rating is at 2.5.

OpportunitiesWeightRatingWeighted ScoreThe fast food Industry Growth(McDonalds.com, 2012) 0.0740.28Other Restaurants with outdated Appearances0.0630.18Innovations of healthy foods due to social Changes0.0530.15Worldwide expansion0.0740.28Discounts and Freebies0.0420.08Attractive low cost menus0.0530.15Corporate Social Responsibility0.0530.15Availability of breakfast0.0620.12Wide range of beverage options0.0630.18Joint ventures with retailers can place the business in

High traffic areas

0.0530.15Diversified portfolio0.0520.10Acquisition and diversification of other restaurants0.0740.28Cheaper alternatives becoming popular due to global economic slowdown0.1530.45Threats Emerging health complications as a result of fast foods0.0840.32Economic recession going on globally0.0530.15Saturation in the urban markets of the developed countries0.0640.24Modern upstarts becoming vulnerable to the already established markets0.0640.24Anti American sentiments0.0720.14United states unemployment0.0320.06Rising Costs0.032.06Price wars0.0320.16Total(McDonalds.com, 2012) 1.00 3.19

The increase in the population around the world has contributed greatly to the increased profitability and sales volume trade by the entity over the past decade. In addition, the growth of the industry has also been fueled by the global economic slowdown in that the food and services offered by the food chain are a cheaper alternative for people coupled by the presence of high quality of their products making the purchases from McDonald worthwhile. Diversification is also another strong point for the entity in that the introduction of new beverages in the restaurant industry provides the entity with new avenues for revenues such that despite the presence of numerous financial challenges in the food industry supplemental income is generated by the sale of beverage products. In addition, the systems enable the entity to construe available opportunities such as retailing outlets such that McDonald is able to setup outlets in these retail outlets. The growth of the entity via various means such as, the acquisition of new ventures, expansion into new regions have been the major drivers of growth for the food chain outlet by increasing the revenue streams for the entity.

Location also plays a significant role in the amounts of sales made because consumers find it easier to access McDonald in busy cities because of the need to save time. In addition, the need to address consumer’s issues and needs such as breakfast meals for busy individuals has been a drive in that people find it convenient to access McDonald outlets and make their purchases in the shortest time possible. Furthermore, the main strengths for the business have been edged by the provision of cheap products, which are of high quality.

On the other hand, the threats, which are evident, are due to changes in consumer preference for products, which have a health approach towards their development. In addition, the consumers have become aware of the effects of the over consumption of foods high in calories which has increased the rate of fast-food health related complications. Saturation within the restaurant business with specific reference to developed nations poses a risk to the profitability and sole survival of the entire chain of McDonalds.

–CPM Matrix(McDonalds.com, 2012)

McDonaldsBurger KingYum BrandsSuccess FactorsWeightRatingWeighted ScoreRatingWeighted ScoreRatingWeighted ScoreGlobal Expansion0.1640.6420.3220.32Price0.1330.3930.3930.39Financial Position0.1040.3030.3030.30Loyalty to the Consumers0.0540.6030.2030.15Advertising0.1040.4030.3030.30Quality of Products0.1040.4030.3020.20Innovation0.1430.4220.2820.20Market share0.1540.6030.4520.20Management0.0730.2130.2130.21Total1.00 3.96 2.75 2.27

The selected competitors were chosen due to their significant market presence in the fast food and restaurant businesses. The weighting was done so in relation to the market share of each entity and the impact of their products in the market. Moreover, the other brands were inferior to the McDonald brand in the market due to the numerous branches and consumer preferences for the brand. The presence of the McDonald products within the market are superior due to the high quality advertising and loyalty of the entity to consumers to ensure that all the needs of consumers are met by the provision of high quality appealing products.

General competitiveness of an entity in relation to the specific demographic market is usually evaluated via the use of competitive profile matrix. The differences between the rating of the entity and those of similar entities within the market give a clear illustration of the presence of a competitive advantage over the other entities (Shoemaker, Lewis, &Yesawich, 2007).

The company has a better general standing in the level of competitiveness against the other entities: Burger King and Yum Brands. The difference in level of competitiveness varies from one entity to another.

Competition with Burger King: difference = (3.96-2.75= 1.21)

Competition with Yum Brands: difference = (3.96-2.27= 1.69)

The competition between Burger King and McDonald can be viewed as relatively fierce I comparison to competition with Yum Brands. Hence, the organization prioritizes its marketing efforts to neutralize the counter marketing strategies imposed by Burger King, which seeks to attain market dominance in the restaurant industry. This can be done through numerous approaches all of which vary from one demographic market to another. The qualities of the products produced by McDonald are by far superior in quality, making them preferable to the consumers.

All the three entities have same organizational structure and management approaches but the ability of McDonald to penetrate other markets has been due to its long time presence in the market making it known to the majority of consumers. Hence, it is easier for the entity to make new market gains in the shortest time in comparison to the other named entities.

Internal Assessment[f1]

–Projected Financial Statements

Income Statement for the Period Ended20132014Sales$,735$,745 ––Gross Profit$,048$,197Expenses$39$6Sales &distribution$95$104Administrative$91$92Depreciation$0$0Extraordinary Gain$ 305$392Debit$29$29Interest expense$75$163Net Profit before tax$63$95Tax expenses$12$68Preference share dividends$0$0Common stock dividends$90$90Retained Earnings $22$78

The entity shows a higher value of retained earnings for the financial period ended 2011 in comparison to the previous financial period for the year ended 2010. However, there is a reduction for volume, which can be attributed to numerous factors such as the economic slowdown, which reduced amounts of disposable incomes within the populations due to unemployment. In addition, the reduction can also be attributed new entrants or loss of customers to the competitors.

A reduction in sales volume in the tow financial periods might be attributed to the presence of the global financial crisis effects, which led to the reduction of the purchasing power of people around the world. In addition, this can also be attributed to the presence of new entrants within the market or tougher competition from the existing market players. Increase in tax expenses also contributed to the reduced amounts of retained earnings which would have been higher if the taxes were reduced or maintained at the same rate.

Balance Sheet for the period Ended20102011[f2] Fixed Assets$,474$,484Current Assets: Cash$154$173Accounts Receivable$70$66Inventories$,102$,125Less Depreciation($75)($165)TOTAL ASSETS364425Liabilities Accounts Payable$170$206Taxes Payable & Other Accruals$162$209Other Current Liabilities$670$753Long-Term Debt/Liabilities$523$523Preferred Stock$0$0Common Stock$242$242Retained Earnings($4)$122Total Liabilities And Equity$664$025

The retained attains have increased mainly due to a consistent rate of return for the shares. This is because a consistent rate of dividend or a reduction of the same enables entities to have more funds at their disposal in comparison to when more shares are issued reducing the amounts available for the business to indulge in projects.

–Financial Analysis

•Liquidity Ratios

Current ratio = current assets: Current Liabilities

$29989/$10140= 1: 3

The ratio presented between the assets and the liabilities is an indication that the organization is poorly placed to repay its debts and other financial obligations if the need arises.

•Return on Equity: $2602/ $15,146=0.171

This is an indication of a lower rate of return for the assets meaning that the assets are not utilized adequately for better results and increase in the organizational revenues.

•Financial Leverage Ratios

Debt Ratio = Total Debt/Total Assets: $10140/ $15146 = 1:6

However, the debt to assets ratio is healthy placing the organization in a better position to repay its long-term debts to lenders and other debtors of the entity.

•Profitability Ratios

•Gross Profit Margin = (Sales – Cost of Goods Sold) / Sales= $20,460/ $3702=5057

This is an indication of high returns from the sales. An indication that the sales have increased or the costs of purchases have reduced dramatically to enable the entity increase its revenues for deductions of its expenses for operations.

•Stock turnover

Inventory turnover ratio: $6107/ $1054=5.79

The results from the inventory turnover are an indication of the rate of sales is high meaning that the organization makes adequate sales.

In overall, the entity has a sound financial position despite the presence of numerous current liabilities, which might due to the need to increase sales volumes. This can be reduced by decreasing the accounts receivable amounts to enable the entity pay of its debts and make other cash purchase without the need to make credit purchase. In addition the received amounts can be used for other purposes such as advertising and payment of other liabilities accrued by the organization.

–IFE Matrix(Malley, Oullette, Plourde, & Roy, 2009)[f3]

Key Internal Factors

(Malley, Oullette, Plourde, & Roy, 2009)

WeightRatingWeighted ScoreStrengths “Plan To Win” Focus 0.1040.40Total Revenue Increase of 26% in Six Year period 0.0730.2180% Of Stores are Franchise (Local) 0.0840.32Growing Sales and Market Share for 7th Year 0.0330.09Focus on Classics 0.0540.20Location of Restaurants 0.0230.06Brand Movement into Special Items 0.0940.36Weaknesses(Malley, Oullette, Plourde, & Roy, 2009[f4] ) Low Staffing During Peak Hours 0.1010.10Keeping Labor Costs Down 25% of the costs of operation 0.0710.07Focus too much on price 0.0720.14Carbonated Beverage Purchases Decline 13% 0.0310.03Focus on Modernization in Wrong Areas 0.0620.12Portion Sizes 0.0720.14Food & Paper Contribute to 33% of operational costs 0.1620.32Total 1.00 2.56

The ‘Plan to Win’ approach is responsible for a lot of the success achieved by the entity in that the primary focus has been on settling for the best results by the organizational management. In addition, the organization has had an increase in revenue of 26% for the past six years is due to the need to perfect all aspects such as quality products, service delivery, good marketing strategies, and operation processes.

The internal factors selected were the most significant as they directly affect the profitability and operations of the entity. Their significance relates to the normal functionality and how they affect the normal production processes and the achievement of organizational goals (Malley, Oullette, Plourde, & Roy, 2009).

The elements selected were chosen because they contribute significantly to the overall financial stability and organizational functionality of the entire chain of fast food outlets in the world of McDonald. The elements were considered because consumers as well as analysts consider them as factors, which contribute to the financial health of the organization. The Five P’s: Product, Place, Promotion, People

The internal strength scores are an indication of the presence of a strong presence globally. This can be attributed the presence of a strong brand which can be easily identified with and by consumers in many aspects. A strong brand is easy to market and thus can be used to penetrate new markets with ease and grow in the existing markets preferably with new, innovative products which are appealing to the vast majority of consumers. This because consumers already know about the products offered by McDonalds hence they want to experience the famed brand and its products. Everyone wants to be associated with success.

The weaknesses exhibited by the entity emanate from the effects of external market forces, which should be countered by internal forces such as new product development. In addition, the presence of the new products would enable the organization to affirm its presence in the market and dedication to its consumers on issues pertaining to their health by providing them with cheap, quality and healthy food options. As a learning organization, the market trends and experiences should be met by the need to evolve and provide better services and products to the consumer market. Increased public awareness can be attributed to the reduced sales activity in comparison to the projected sales activity.

Strategies in Action at MCDONALD’S CORPORATION

Due to the vast number of outlets spread out across different parts of the world. The entity focuses on management and execution of its strategies via the use of the franchise model. This enables the entity to focus on attracting new investments because of the success of managing the entire entity via this model.

Strategic Analysis and Choice

-SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

1. the company has adequate resources for its operations1. Products which are regarded as unhealthy due to high calories1.New territorial markets such as Asia and Africa1.loss of market share to stiff competition[f5]2. Size of the entity with its branches in numerous regions in the world2. Lack of adequate coordination between the various entities.2. Green and organic foods would provide the perfect alternative for attracting new consumers.2. competition from organic food sellers[f6]

A SWOT analysis and matrix are useful tools in maximizing of efforts towards development of the best strategies based on the presence of the threats and weaknesses attributable to the business operations. The evaluation of the risks and benefits in operating a business to understand the ability of the business to maneuver through financial, resource and market shortcomings. All the contained elements were included, on the basis of evaluation, to ascertain their relevance and contributions to the growth of the entity.

In essence, the formation of strategies for the business is made possible by utilizing the strengths of the business to exploit the available opportunities for the business while simultaneously improving on the weaknesses of the entity, to counter the threats posed to the business.

–QSPM Matrix

Strategy 1

Create a healthier menu via the organic food approach.

Strategy 2

Increase research and development allocations to enable new products and efficiency in operations. [f7]

Key internal factorsWeightAS(strategy 1)TAS(strategy 1)AS(strategy 2)TAS(strategy 2)STRENGTHS New products and services0.140.440.4Beverage market(frosties)0.0830.2420.16Growth of franchise restaurants0.090000Demand for organic products0.0640.2420.12International expansion to new markets0.10000Conservation(green initiative)0.0740.2830.21THREATS Changes in commodity prices0.0720.1420.14Food safety and health related issues0.070000Global Economic slowdown0.120.230.3Healthy food consciousness0.0840.3230.24New and existing competition0.0940.3630.21Claims of obesity0.0940.3630.27

(McDonalds.com, 2012)

The two strategies would be equally beneficial to the efficiency and profitability of McDonald’s chain of restaurants. However, their levels of benefits vary because of the different effects they have on the business operations of the entity. New organic products are a sure way of ensuring that the organization maintains its relevance and competitive advantage in a market, which could be considered as highly volatile due the high saturation of market players (Mooradian, Matzler, & Ring, 2012)

The said strategies are relevant for the achievement of organizational goals as well as the development of healthy products, which have become of high appeal to consumers. In addition, either of the strategies would lead to the development of relevant products for the evolving consumer market within the restaurant industry. In addition, it is part of the American culture to purchase fast food hence it would be important to incorporate a healthier approach for the betterment of the health of the consumers. In addition, due to the new regions, which McDonald has invested in, the organization would be prompted to develop products, which are relevant for each individual market. In addition, to establish the different menus the organization would be prompted to consider the different cultures and religions in place like china, Middle East and Africa to develop products, which are appealing to the respective populace of such regions. In addition, the different regions have different taxation approaches, which the organization franchises would have to cooperate to ensure that they are up to date with the relevant laws and regulations.

Strategy Implementation Considerations

–Barriers to Success

• Lack effective leadership in the strategy implementation phase affects the overall success of the entity.Change should be initiated by management such that those in junior positions will conform to the changes on sight of the management adhering to the new strategies for the overall benefit of the business.

• Global execution of the strategies of adopting the green and organic food approach might seem unpractical for implementation from a global perspective in that the different regions might respond differently to the changes.

• Implementation of new strategies is difficult because of the aspect of’ ‘easier said than done’. This is because, during implementation, there might numerous issues, which must beaddressed before the execution of the strategy. This might be current supply contracts for materials, which might be rendered useless once the new approach is adopted (Lynch, 2008).

• Reluctance to change might be due to habits of doing things within an entity, thus when hew strategies are adopted people within the entity find it difficult to adapt to the changes which are in essence necessary for the overall success of entity.

• Lack of adequate communication or instances of miscommunication between employees and departments responsible for the execution strategies are usually cause of the failure of strategies or the inefficient effective execution of strategies. This can also lead to the deviations from the expectations of the committees or the organizational management on the implemented strategies leading to losses in terms of resources such money and labor.

• Inadequate allocation of resources and lack of prioritization of needs leads to the lack of achievement of the set out goals and objectives. This is because the execution of strategies without adequate resources such as manpower, and funds leads to squeezed and strained or stretched resources which are available within the organization.

The strategies should be formulated with the involvement of the various stakeholders and employees who are responsible partly for the implementation of the identified strategy. Successful implementation of strategies should be led by competent and dedicated management, to ensure that the strategies are implemented as instructed. The intentions of the management of implementing strategies should be communicated sufficiently to all those who are affected either directly or indirectly.

–Technology Infrastructure

The organization uses technology to enable consumers of products to make orders with specific reference to online models and telephone means to make purchases. Technology based communication within the entity should be incorporated to enable the stakeholders, consumers, shareholders and employees to communicate any experiences or hindrances towards the implementation of the said strategies. [f8]

–McDonalds Corporation Organizational Structure

McDonalds has a hierarchal organization structure in that there are different levels of management with each part of management responsible for specific functions and duties within the organization trickling down to those in lower parts of management. Such would facilitate communication within the various departments on new ideas, which would enhance the sufficient implementation of the said strategies.

Hierarchal organizations such as McDonald have their shortcomings in terms of effective management and effective and efficient execution of duties and strategies. This is because of the presence of miscommunication between the different departments involved and directly affected by these identified strategies. However, hierarchal organization has clear and precise duties for all levels of management making them preferable in terms of effective and efficient management[f9] .

Strategy Review and Evaluation

The organization can conduct surveys as to the reception of the new products by consumers or the general market. In addition, the strategies can only be reflected upon after the specific financial period during which they were implemented. This would give quantified data, which would be sufficient for comparison of the current period of implementation and previous financial period preceding the implementation of the said strategies (Enz, 2010). In addition, quantified date is clear and measurable to show any effects and changes of the adopted strategies. In addition, the sales volume in relation to the period of implementation could be evaluated, in a quarterly period, to ensure signs of negative or positive impact of the strategies.

The two options identified are equally acceptable but their execution would require ample evaluation and resources for their full implementation. Entry into a new market is bound to be met by resistance and challenges due to the presence of difference s in market fundamentals. Such fundamentals may include the population size within the respective market. Population size determines the consumption behavior and the purchasing power, which is directly influenced by the size of the GDP returns and labor wages. In addition, competition is also a major influence in the entry into a new market segment with new products. This is because entities tend to focus on new strategies with direct relation to the strategies formed by the new or existing competition.

References

Covey, S. R. (2003).The 7 habits of highly effective people personal workbook.New York: Simon & Schuster.

Enz, C. A. (2010). Hospitality strategic management: Concepts and cases.Hoboken, N.J: John Wiley & Sons.

Hitt, M. A., Ireland, R. D., &Hoskisson, R. E. (2011).Strategic management: Competitiveness & globalization. Mason, OH: South-Western Cengage Learning.

Langley G.L. Nolan K.M. Nolan T.W. Norman C.L. Provost L.P (2009). The Improvement Guide: A Practical Approach to Enhancing Organizational Performance. (2nd Edition).San Francisco: CA, Jossey Bass.

Lynch, R. L. (2008). Strategic management.Harlow: Financial Times Prentice Hall.

Malley, O.M., Oullette, S., Plourde, K., & Roy, R. (2009). “McDonald’s Corporation” A Strategic Management Case Study www.mcdonalds.com.

McDonalds.com. (2012).Our Company. Retrieved from http://www.aboutmcdonalds.com/mcd/our_company/mission_and_values.html

Mooradian, T. A., Matzler, K., & Ring, L. J. (2012).Strategic marketing.Boston, MA: Pearson Prentice Hall.

Shoemaker, S., Lewis, R. C., &Yesawich, P. C. (2007).Marketing leadership in hospitality and tourism: Strategies and tactics for competitive advantage. UpperSaddleRiver, N.J: Pearson.

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