Business Health Check Mechanism Application

The Business Health Check mechanism is a tool used to evaluate key areas of an organization and identify opportunities for improvement. This document discusses how to apply the Business Health Check mechanism, its objectives, impact on the organization, and strategies for improvement. It also highlights the importance of business planning and management accounting in strategic networks.

BUSINESS HEALTH
CHECK
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Table of Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
1.1.the objectives of business.......................................................................................................3
1.2. Factors that impact on the business......................................................................................4
1.3.Potential improvements in business and it's operation..........................................................5
LO.2.................................................................................................................................................6
2.1 Review the effectiveness of the business...............................................................................6
2.2. Plans to improve the business, justifying it value.................................................................7
LO.3.................................................................................................................................................8
3.1.Evaluate the current skills of management and staff.............................................................8
3.2.plan for the development of skills for management and staff................................................9
CONCLUSION..............................................................................................................................10
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INTRODUCTION
Business Health Check is a tool to check the effectiveness of operations and some
important areas within it. It is a comprehensive evaluation of critical and crucial areas of
business. The employer needs to review working of its operations from experts outside business.
It helps company to concentrate over key areas of operations with the help of business coach or
experts. To meet the health check criteria, company needs to evaluate about certain things like,
objectives of business, factors which are affecting it operations, formulating plans to evaluate
and improve the effectiveness of business. McDonald’s is a leading American fast food chain
and the world’s largest restaurant chain that offers variety of fast food meals is selected in the
present report.
LO 1
1.1 Objectives of business
McDonald’s is the leading fast food chain that was found in 1940 as a restaurant which
was later on shifted to a hamburger stand. Today, it is the largest restaurant chain that operates in
more than 100 countries serving approx. 70 million people. It is among the world’s fourth largest
company that provides job to 1.9 million employees. Company has global reach and operates in
nearly many prominent places of the world. It has a large number of product offerings ranging
from hamburgers to wraps and chicken products. The company has skill of product innovation
and also easily adapting to various political system make it a leading brand in fast food industry.
Further, it has competent staff and large workforce which make company a successful entity
(Saaty and Vargas, 2013).
The short term objectives of McDonald’s is to serve the best quality of food to customers
and increase their loyalty and lifetime value towards company. The company offers many
varieties of meals which are needed to be a standard product so that consumers will not have to
sacrifice quality for price. It aims to improve the quality of food in Asian countries in next one
year. Moreover, it also aims to diversify and make its menu local according to place or country
from where it operates from this year and attain the objective within next five years. It aims to
achieve these objectives in the next five years.
Long term objective of company is to effectively fulfil the corporate social responsibility
which it have towards the society and environment as a whole. It should be attainable by
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company. Further, it would take initiative to promote football matches to encourage people
towards sports and health. It is encouraging in reducing down waste materials from the
environment and initiated six months campaign to motivate people to make initiatives in picking
up of litters and other waste products from the sea and other river bodies to have a clean and a
better environment (Mitchelmore and Rowley, 2013).
1.2 External and internal influences on the business
PESTLE Analysis of McDonald’s: Political: Company has to oblige to the strict rules of consumer protection act and it
needs to serve what it claims. Further, it operates in many parts of the world and thus, it
has to follow different taxation policies of particular country. Economic: It is affected by the global economic change like crisis and recession in
economy. The exchange rates of various countries affect revenue generation of company.
Further, company is affected by the economic factors like unemployment, decrease in
disposable income, etc. Social: It is affected by various culture and social factors that prevail in different
countries as company needs to be careful while deciding their menu by keeping these
factors. Technological: The improvement in technology helps to reduce the waste and has
increase reach of company to a large number of customers by the help of services like in-
store self-services and online ordering. Legal: It is affected by certain laws of land of its operational area. It is strictly obliged to
follow health and safety standards regarding consumers in many countries.
 Environment: Company is affected by the changes in environment. It is required to
establish and eco-friendly supply chain and to address issues like deforestation which
affects the food business of company (Nagaraj, 2016).
SWOT Analysis
Strength:
1. Company has the most recognised logo among food chain business
2. It is among the most socially responsible organisations.
3. Strong financial position of company.
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Weakness:
1. High initial cost
2. Poor quality of food
3. Increase in cost due to training of employees
Opportunities:
1. It can improvise its food line by providing organic meals
2. Expand its food menu by catering needs all individuals
3. Explore and expand business in other areas of the world
Threats:
1. Negative image of company in media can hamper its business.
2. Increasing competition from new emerging outlets in food industry.
3. Health awareness can make a threat to McDonald’s (Cardoni, 2012).
Porter's five forces model Threats of new entrants: McDonald’s will be affected by the new entrants as it would be
easy for consumers to switch other brands. Also, the barriers are not too high to restrict
the entry. Threats of substitute products: It faces competition in substitution of product from many
international and local brands. The effect of substitution is moderate due to the vast
varieties offered in by company. Bargaining power of customers: Company is affected by the customers' bargain power
as there are many competitors that offered the same products. To reduce down it effects
company maintain and promotes it food products to meet best quality standards. Bargaining power of suppliers: Due to it huge size of business company has large
numbers of suppliers to meet there demands. Thus, the suppliers has very less or no
bargaining power (Lencioni, 2012).
 Competitive rivalry: McDonald’s faces a tough competition from many leading brands in
food industry. Example: Starbucks, KFC, Dominos, etc. that provides similar products to
consumers.
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1.3 Potential improvements in business and its operations
Ansoff model is used as a strategic planning tool to improve the marketing strategies of
company. It has been used by senior managers to formulate planning for future growth. Various
growth elements on the basis of which Ansoff matrix is calculated are; Market Penetration,
Product Development, Market development, and Diversification.
Existing Products. New Products.
Existing
Markets.
Market Penetration.
The existing products of company are
hamburgers, cheeseburgers, chicken
wraps. It offers desserts and
milkshakes.
McDonald's has introduced health
conscious foods in menu like salads
and fruits.
Product Development.
It always serves varieties in it products.
Company has specialised in product
innovation. It has established new
products for it outlets in Asian
Countries. These strategies help in
achieving the needs of it targeted market
and serves it large number of consumers.
New
Markets.
Market development.
Company has need to penetrate in the
new markets of world to explore the
underlying opportunities.
It is ample resources helps it to tap
new markets to introduce it products.
It has established it business in.
 Uruguay.
 Yemen.
Diversification.
It has diversified it business by
introducing diversification in it
operations.
Introducing of soups for Asian countries.
Aloo tiki and vegetable wraps in India.
It has added meals like salads, fruits in it
menu.
Also, firm has diversified it menu by
introducing health nutrients in it
(Scholes, 2015).
LO.2.
2.1 Review the effectiveness of the business.
The effectiveness of business is a key factor for very organisation. It is an essential to see
that whether business is able to achieve it set goals, what policies are implemented to solve the
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problems in relation to accomplishment of targets, etc. to check effectiveness of business
company can use various parameters which are : Marketing: McDonald's uses various policies and strategies to promote it products to
customers. Company organise various promotional events to make people aware of it
products line. It has strong marketing strategies which enable it to attract maximum
number of consumers (Winston, 2016). Sales: It is one of the largest companies in terms of revenue earned by it. Sales promotion
techniques of McDonald's is an effective tool which help in increasing it sales. It
generated huge amount of profits through it various outlets. Products/Services: The product line of McDonald's is versatile in nature as it serves
many types of fast foods like hamburgers, cheeseburgers, chicken wraps, etc. Company
offers speciality of various local regions. It offers product according to needs and
demands of it consumers. Finance: It is a financially sound and strong as it has huge amount of assets and finance
to meet it current and future requirements and liabilities. It has huge capital funds to meet
it opScholes, 2015eration needs. Also, it has large amount of investors who help
company to meet it needs. Staffing: Organisation has competent workforce which helps to meet it objectives and
goals. The company tries to fulfil it set amount of orders maintaining customer
satisfaction and brand loyalty. Also, it guides and trained it staffs to improved it
performances. Business Image: Companies' logo plays a crucial role in attracting maximum number of
consumer. The brand image of McDonald's is better than it many competitors which
provides a competitive advantage to it.
 Record Keeping: it keeps records of it employees as well as it day to day transactions that
occurred during sales of it products. Company uses these records to formulate policies
and plans in relation to employees, any particular products, or make changes in any
feature of products, etc. it can use software database and other technology to maintain a
clear track of records and avoid any duplication of them.
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2.2. Plans to improve the business, justifying it value.
 Business Planning: It refers to planning of strategies and policies to implement and
achieved the desired goals and objectives in a given time. Business planning is done for
two crucial aspects which are, to earn maximum amount of profit or revenue from it
operations and secondly to make action plans to combat the problems arrived during
operation of business.
The business plans formulated by McDonald's in relation to expansion of it business operations
and to bring new products in it menu to meet demands and preferences of consumers. It develops
it plans on basis of following aspects:
 Forecasting: It refers to process of making future predictions by studying or analysing
trends, past and present data. The company has made many market researches to generate
the information regarding its expansion plan. It has done detailed research before
penetrating into new markets for it operation. Business entity conducts surveys to
generate information in regarding to the new food products (Osiyevskyy and et.al., 2013).
 Marketing: Company has formulated marketing policies to generate products for all
individuals. It has formulated plans and strategies to bring new promotion techniques to
improve the sales of it existing products, also, company is making strategies to make
local people aware about it business in new areas.
 Sales: to improvised the sales of company it has introduced new and healthy products in
it line of business.
 Productivity: It low price strategies, trained workforce, cost effective techniques of
production helps it to improved it productivity (Johnson, 2016).
To improve it business operations McDonald's can used following techniques:
 Organisation can improve responsibility of it employees.
 It can make guide and assist employees to improve it performance.
 It should make employees and mangers to work together.
 Motivate them to encourage team work.
 Focus on training and development of employees.
 It can implement Performance monitoring to know about the skilled employees and
reward them for it contribution.
 This would further help company to know about unskilled employees.
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 Company can take help of business coach or experts to guide it to know about critical
areas and help it to improved the same.
 Also, it should make proper research for attainment of it objectives.
 It should implement a strong information handling mechanism as it operates in consumer
oriented industry.
LO.3.
3.1.Evaluate the current skills of management and staff. Technical Skills: These are specific set of skills required to perform specific task. They
are generally related to mathematics, IT, engineering, mechanical, technology, etc. it is an
essential techniques which should be there in managers and employees. These techniques
help them to performed assign job more effectively (Chang and Lee, 2013). Operational Skills: The operation managers are at core of every business. They guide
and assist operations of organisation. It requires to poses certain skills for effective
conducting of operations like, Effective Leadership, crisis management, communicates
effectively, motivate and organise team to fulfil the goals of company on set time.
 Managerial Skills: managers are need to handle the various areas of business. It looks
after the different department thus, it need to poses various skills in relation to human
resource, IT, mechanical and operational area. Thus, the manager must be a good
communicator, has effective leadership quality, should be able to effectively handle work
, have time management skill, awareness of business and it operations, etc.
Current skills of management and staff:
 Effective Communication: The managers who is able to effectively communicate to it
employees are among the most effective managers. The good communication network
between the manger and the employees will able to reduce the various problems and
enable to make timely decision. The strong communication network between the
managers and employees of McDonald's results in successful operation of business.
 Acceptance of Responsibility: Employees should learn to accept it mistakes and
effectively implement it role in relation to there work. The manager should make
imitative to take up responsibilities this would encourage subordinates and they will learn
to take up responsibility for there individual work. This brings better working
environment within organisation (Gevurtz, 2014).
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 Time Management: Manager who would able to effectively manage the working of
organisation will improve companies' performance. They are assigned with various task
and responsibility to be fulfilled thus, managers need to be effectively managed there
time. This will lead to better working of organisation and timely decision-making. It is
essential for McDonald's to have effective time management as it would help company to
fulfil there orders and satisfy customers (Virkkunen and Ristimäki, 2012).
3.2.plan for the development of skills for management and staff.
To develop skills of existing staff and management there is a formulation of plan that will
help in attaining the goals of company which is as follows:
Objectives: The aim of company is to improved the technical and managerial skills of it
existing employees and management of organisation. This done to increase there knowledge for
assigned task and help them to attain goals of company in given time.
Duration: It aims to achieve the set objective within six months time period.
Strategies: To implement the above objective company has devised following strategies i.e.:
 Training and Development programmes: company would conduct a training session
for employees to know about the various techniques of production process, new
development in technologies. It would conduct different training program to guide
managers regardGevurtz, 2014ing use of it technical skills, how to improve it other
managerial skills. It can conduct various training programmes like:
1. Class room sessions.
2. Seminars.
3. Off the job training, etc. Reviews from Managers.: to know about various employees company can conduct a
survey through which it can take reviews from the departmental head about the skills and
knowledge of employees this would help it to properly divide the skilled and unskilled
employees. To train managers at lower level it can take reviews from senior mangers or
executives about the skills of managers and how effectively it utilised it in working. Benchmarking: organisation can set a specific criteria or benchmarks to measure the
performance of employees. According to these set standards employees should be
measured and reviewed. It can set different benchmarks for improvising and measuring
the performance of managers, they should be judged accordingly.
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 On the Job Training: the firm can set up a procedure like on the job training this will
guide employees more effectively as they are able to see how skills are applied in
practical situations. ThGevurtz, 2014is would be a beneficial source of training as
employees would learn from an experienced worker. Similarly, to train mangers this
method would be an effective tool as they will learn how to utilise there skills in real
scenario.
CONCLUSION
The Business Health Check mechanism helps organisation to evaluate it key areas and
take help to improve them. It helps a company to look business from outsiders view point and
thus, make required changes. To apply health check mechanism we need to look for the
objectives of business, there impact on the organisation. Further, devise plans to improve
business operations and justify the effectiveness of it. These strategies help McDonald's to
improve it performances, increase it productivity, motivate employees to attain the goals.
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REFERENCES
Books and Journals
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Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
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Gevurtz, F. A., 2014. Business Planning. Foundation Press.
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