Business Health Check (BHC) Assignment

BHC

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1.1 Analysing the objectives of organisation.........................................................................1
1.2 Explaining factors impacting business.............................................................................2
1.3 Initiating improvement in company by using Ansoff Growth Matrix.............................4
2.1 Reviewing effectiveness of organisation..........................................................................5
2.2 Developing plans to improve company............................................................................6
3.1 Meaning of technical, operational and managerial skills.................................................7
3.2 Devising plan for development of skills for management and staff.................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business health check is quite important for assessing the performance of organisation in
market with that of its competitors. Present report deals with McDonald's which is engaged in
fast food sector and satisfying customers worldwide. The model such as PESTLE analysis,
Ansoff's Matrix, SWOT analysis and Porter's five forces are applied to organisation for assessing
factors impacting business. Furthermore, plans are devised for the firm for achieving stated
targets in an effective manner. Current skills, abilities of management and staff as well as its
effects on company's performance are evaluated quite effectually. Appropriate plan has been
devised for initiating the improvement in skills of workers and management.
1.1 Analysing objectives of the organisation
Company runs business in order to provide quality goods and services to the society. In
return, firm gains income by supplying services quite effectually. In relation to this, business
earns profit and establishes brand image by providing desired goods to customers and enhancing
level of satisfaction in the best possible manner. It is required so that market share can be
maximised in a better way (Park, Kim, Ahn and Kim, 2018). In relation to this, McDonald's,
which is one of the biggest companies is engaged in imparting fast food services to earn higher
revenue and satisfy customers to a high extent. It can be analysed that organisation was found in
the year 1940 as a restaurant only by Richard and Maurice McDonald in US (United States).
Afterwards, both of them baptised business as hamburger stand.
McDonald's has used first time its franchise the logo of Golden Arches in 1953 at
Phoenix, Arizona. In 1955, businessman Ray Kroc had joined company as an agent in franchise
of organisation and further moved to buy the chain from two brothers. It was named after
brothers. The company had its headquarters in Oak Brook, Illinois but now has shifted to
international headquarters to Chicago in the year 2018. McDonald's is one of the largest
restaurants in terms of revenue and is serving over 69 million customers in more than 100
countries. Thus, it can be said that business is able to collect revenue quite effectively and
customers are satisfied with the same. There are various food items provided by organisation
such as cheeseburgers, wraps, hamburgers and French fries. Furthermore, it is able to garner
good quantum of profits as net income in $4.686 billion in the financial year 2016.
The long term objectives of McDonald's are as follows:
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 To serve quality food to customers at affordable prices in a friendly environment
 To be socially responsible organisation providing good quality foods
 To earn profits and maximise returns of the shareholders
The short-term objectives of McDonald's are listed as below:
 To provide quality and fresh food to customers
 To open new restaurant chains in more countries
SMART criteria can be applied in relation to the objectives of company. These are:
S (Specific) - The specific goal is much more relevant than that of general goal. McDonald's has
specific goal to explore markets and satisfy customers in effective way (Tien and Chung, 2018).
M (Measurable) - This can be measured in by establishing concrete progress in attaining goals in
the best possible manner. It means that company should go on track and at targets so that it may
be attainable.
A (Achievable) - The achievable is when goals are identified and as such, business is able to
figure out ways to achieve the same.
R (Realistic) - The goals should be realistic which must represent objective in effectively
manner. High and low goals can be identified in a better way.
T (Timely) - Goals stated by McDonald's should be achieved within timely manner. Without
time frame, business may not strive to accomplish goal in effective way.
1.2 Explaining factors impacting business
PESTLE Analysis
P (Political) - The presence of organisation is in all over the world and is following such
situations in effective manner. It is developing its food meals as per specific nation's political
factors (Vandesande, Balen, Della Torre and Cardoso, 2018).
E (Economic)- McDonald's is affected economic factors and is pricing its products as per cost of
living index and also using purchasing power parity up to high extent.
S (Social)- Organisation has effectively established its food items by taking into account social
factors but has not customised goods in relation to specific customer needs which is done by its
rival Burger King
T (Technological) - McDonald's is deploying modern equipment and machinery and is injecting
production level with the help of technological advancement.
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L (Legal) - The rules and regulations are to be followed by company for achieving set goals. The
legal framework of every nation is different and organisation is abiding by rules (Prado, Pearson
and Bertelsen, 2018).
E (Environmental)- Regulations are followed regarding the environment and it does not directly
dispose-off waste in the environment and ensures nature remains clean.
SWOT Analysis
S (Strengths) - The main strength of McDonald's is that it is present in almost every nation and
provides satisfaction to customers. Manpower is highly productive as well.
W (Weaknesses) - Customised items are not provided which means that it is not adhered with the
needs of customers. Innovation is needed as taste of products are same for couple of decades.
O (Opportunities) - Organisation has an ability to impart new meals to customers who are
interested in trying different fast foods.
T (Threats) - It is getting serious competition from the market as local food retailers have
already entered in the market and thus, share has decreased. It is required to re-develop products
to attain customer satisfaction.
Porter's five forces model
Customer's bargaining power- Organisation has kept its prices of food products as per needs of
consumers and competitive pricing policy is implemented by it keeping in mind the income of
customers (Hall, K.K and et.al, 2018).
Supplier's bargaining power- The suppliers are providing raw materials and ingredients to all
fast food chains causing immense competition. They are able to make profits but is
disadvantageous to McDonald's as it is facing immense competition.
Threat of new entrants- The threat is increasing day-by-day as people are buying food of their
choice as own ingredients are used in the manufacturing by firm. Furthermore, Burger King and
Chipotle Mexican Grill are providing tough competition to the organisation.
Threat of substitute items- McDonald's is specialised only in providing burgers whereas rivals
have diversified their portfolio by providing puff and rolls.
Rivalry among competitors- The competition has increased as lots of competitors are providing
food at low prices and are entering in market causing high competition.
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1.3 Initiating improvement in the company by using Ansoff Growth Matrix
Ansoff Matrix is the strategic planning tool that supports firm in making necessary
changes in the operations so that it can raise profit and accomplish objectives. Ansoff matrix
model suggests the growth strategies through which McDonald’s can enhance its profitability.
Illustration 1: Ansoff Matrix
(Source: The Ansoff Matrix, 2017)
Market Penetration
It is a type of strategy that can be implemented by McDonald’s in which firm can sell its
existing products into current market. Thus, by selling products in the current market, entity will
be able to gain attention of mass audience (Shaw, 2016). This will help in improving the
revenues of entity. This strategy will be beneficial in maintaining the market share and gaining
competitive advantage in existing industry.
Market development
It is another improvement area that can be used by McDonald’s. In this, firm can sell
existing products in the new market. By entering in new geographical area, McDonald’s will be
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able to attract more people (Filippov, 2017). This will increase the profitability of company and
it will be able to sustain in market for longer duration. This can make the firm a global brand.
Product development
McDonald’s can develop its products and introduce new product in existing market. As
people are well aware with goods and services of company thus, they will definitely buy its new
developed product. It is suitable for making positive changes in business. But before developing
the product. enterprise will have to conduct market research and need to gather information
about needs of consumers (Bamford and et.al, 2015). This will help in providing them products
as per their requirements.
Diversification
It is another growth strategy in which McDonald’s can sell new product in the new
market. This is risky because it might be possible that firm will get failed to sustain in new
market for longer duration (Gassmann, 2017).
In order to accomplish the set goals of firm McDonald’s has to implement market and
product development strategies. By making changes in products and improving quality of
products, it will be able to attract many buyers. This will enhance the revenues of business and it
will be able to gain competitive advantages (Raziq and Khair, 2015).
2.1 Reviewing effectiveness of organisation
Business effectiveness can be defined as extent to which company is able to meet with its
objectives. Each firm run its business for achieving some specific objectives. In order to meet
with its target it makes changes in practices. Effective planning and utilization of resources
support entity in minimizing risk and enhancing revenues of the corporation. Business
effectiveness are fundamental practices of the firm that supports in raising revenues and
controlling over cost (Shaw, 2016). Products/ Services: McDonald's product and services are of high quality. Company
identify needs of consumers and accordingly provide them products. That is why
consumers are highly satisfied with the brand and they give positive reviews about
company (Filippov, 2017). Entity offers special burgers for kids and it has different menu
for adults. It takes cares of hygienes and ensure high standard services in workplace.
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 Marketing: McDonald's marketing strategies are quite impressive. It markets its products
through social networking sites. By this way company makes strong connection with
consumers (Bamford and et.al, 2015). This helps the entity in attracting more people
towards the brand. Sales: Strategy to sell products of McDonald are average. It needs to work on making
changes in sales strategy so that it can attract more people towards the brand and can
enhance sale volume of business (Gassmann, 2017). Finance: McDonald monitor cash flow activities and accordingly it prepares budget. It
allocates resources in effective manner and utilize monetary resources properly. This
helps the entity in minimizing unnecessary costs and enhancing cash inflow in the
company (Shaw, 2016). Staffing: Company hires skilled employees in the company, those who have necessary
skills to deal with consumers. It provides training to these candidates so that these people
can deal with customers properly. McDonald recruits people by circulating information
on its website. It gives article about vacant post and eligible people can apply online for
the post. It shortlists deserving candidates and conduct interview for them. After final
interview round candidate gets selected. This staffing method is cost effective and save
time of the managers (Raziq and Khair, 2015).
 Brand image: McDonald has strong brand image in international market, it always fulfils
its corporate responsibility. This enhance trust of stakeholders and they become loyal
towards the brand. It takes care of needs of consumers and accordingly provide them
services. If any client have any issue then employees resolve their problems soon. This
create positive image in the mind of people (Bamford and et.al, 2015). That is why
consumers give positive review on its website. This has enhanced brand image of the
firm.
2.2 Developing plans to improve company
McDonald’s aims to enhance its profitability and retain consumers in the brand for longer
duration. For that company is required to make plan so that it can improve business activities and
can meet with its objective. Business planning can be defined as planning for improvements that
supports firm in accomplishing its goal (Filippov, 2017).
Market research and forecasting
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For improving performance of McDonald's, managers have to conduct market research.
This research will support in gathering necessary information about trends, needs of consumers
and their behaviour. This will support entity in making strategy that can help in making positive
changes in business for the growth of entity. Management will have to forecast future
consequences that may arise (Gassmann, 2017). This will support in preparing contingency plan
so that risk can be managed well.
Financial management system
It is another component of development plan in which managers will have to manage
financial resources properly. This will support in making effective control over financial
activities. By this way entity will be able to reduce unnecessary cost which will enhance profit of
company (Shaw, 2016).
Effective allocation of responsibilities-
The roles and responsibilities are to be allocated to the employees so that they may be
able to inject productivity in effective manner.
Performance monitoring-
This is required so that performance of company can be monitored and improvement can
be done in effective manner. Furthermore, it planned and actual performance will be helpful in
taking out deviations and efficiency may be enhanced (Vars and Edwards, 2018).
3.1 Meaning of technical, operational and managerial skills
1. Technical skills- These are skills which are needed to perform tasks in the best possible
manner. It is required so that productivity can be achieved quite effectually. Technical skills are
often practical and as such, higher level of expertise is required to achieve stated targets in
effective way. In relation to this, McDonald's employees have technical knowledge in
manufacturing items suitable to customers.
2. Operational skills- The Manager is required to provide operational skills to organisation so
that day-to-day operational tasks can be injected in a better way. This is required so that business
may satisfy consumers.
3. Managerial skills- The management has the responsibility to manage all the tasks in effective
manner. The work of manager is to effectively devise responsibilities and roles to employees by
which they are able to carry out desired productivity in the best possible manner.
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4. Current skills of management and staff- The success of McDonald's purely depends on the
quality work provided by the workers and management that works for betterment of company.
Training and development should be given to workers in food chains so that they may be highly
productive. Moreover, management and staff are effective in carrying out their responsibilities
(Cascio, 2018).
5. Effect of current skills, abilities of management and staff- It is cleared from the fact that
McDonald's is attaining profits in large quantum. The effect of current abilities of staff and
management has been fruitful for organisation.
3.2 Devising plan for development of skills for management and staff
The plan can be implemented by which skills and abilities of management and staff will
be enhanced in a better way. The evaluation process should be carried out by performance
management evaluation form. This would be filled by staff at certain intervals and then will be
analysed for seeking improvement if any. Measures of performance should be used with that of
industry by which timely corrective actions can be taken. The feedback process is to be then
carried out so that response may be easily collected regarding products and brand image of
company. This will have to be achieved through following proper guidelines prescribed by
management.
Next is to implement termination and disciplinary procedure in which underperforming
workers will be terminated from the organisation who are not that much productive than others
(Unwin, Sanzogni and Sandhu, 2018). The main objective of McDonald's is to make perfect
alignment of company's goals with that of management and staff goals. The disciplinary
procedure is initiated when performance is effectively evaluated quite effectually. Afterwards,
schedule should be set in accordance with the regular intervals so that evaluation process can be
a success. The schedule is prepared in accordance with the business model applied by
organisation and has to according to benchmarking in relation to fast food chains. Hence, skills
and abilities of management and staff can be evaluated regularly with the help of this plan and
thus, McDonald's will be able to achieve stated targets effectively.
CONCLUSION
Hereby, it can be concluded that business health check is required so that performance
can be assessed in terms of competitors and market aspects. The various external factors affect
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an organisation's operations and thus, it has to devise several well-structured strategies in order
to reduce influence of them. This will be helpful in easing off competition and adequate profits
would be easily accomplished by the organisation. Furthermore, management and staff skills are
to be effectively aligned with firm's goals so that maximum productivity can be achieved.
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REFERENCES
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Three Dimensional Matrix Model on the Example of Transport Education Market of the
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Gassmann, A., 2017. Enhancements of business model researches towards a framework that
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GRIN Publishing.
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Susca, P. T., 2018. It's Always Bigger Than Safety.Professional Safety. 63(1). pp.40-42.
Tien, H. K. and Chung, W., 2018. Exploration of Effective Persuasive Strategies Used in
Resisting Product Advertising: A Case Study of Adult Health Check-Ups. Health
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Unwin, D. W., Sanzogni, L. and Sandhu, K., 2018. Developing and Measuring the Business Case
for Health Information Technology. In Technology Adoption and Social Issues:
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Vandesande, A., Balen, K. V., Della Torre, S. and Cardoso, F., 2018. Preventive and planned
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Vars, F. E. and Edwards, G. S., 2018. Slipping Through the Cracks? The Impact of Reporting
Mental Health Records to the National Firearm Background Check System.
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Online
The Ansoff Matrix, 2017. [Online]. Available through
<https://www.mindtools.com/pages/article/newTMC_90.htm>
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