THE STRATEGIC MANAGEMENT HELP

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
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Executive summary
The primary purpose of this study is to carry out a strategic analysis of McDonald's and KFC
to observe their position in the market. Different tools like SWOT matrix, Internal Factor
Evaluation Matrix (IFE), and QSPM matrix have been used to evaluate the position. It has
been found that KFC is in a better position than McDonald's, achieving a more significant
profit margin every year.

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Table of Contents
Introduction................................................................................................................................3
McDonald...................................................................................................................................3
Mission, vision, objectives and strengths...............................................................................3
Strength and weaknesses............................................................................................................4
Strengths.................................................................................................................................4
Weaknesses............................................................................................................................5
Internal Factor Evaluation Matrix (IFE)................................................................................5
Opportunities..........................................................................................................................6
Threats....................................................................................................................................7
External Factor Evaluation Matrix (EFE)..............................................................................7
KFC............................................................................................................................................9
Mission, vision, objectives and strategies..............................................................................9
Strength..................................................................................................................................9
Weakness..................................................................................................................................10
Internal Factor Evaluation Matrix (IFE)..............................................................................10
Opportunities............................................................................................................................11
Threats......................................................................................................................................12
External Factor Evaluation Matrix (EFE)............................................................................12
MATRICES..............................................................................................................................13
Competitive Profile Matrix (CPM)......................................................................................13
SWOT Matrix.......................................................................................................................14

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Quantitative Strategic Planning Matrix (QSPM) of McDonald...........................................15
Quantitative Strategic Planning Matrix (QSPM) of KFC....................................................19
Advantages and disadvantages.............................................................................................22
Recommendations....................................................................................................................23
Conclusion................................................................................................................................23
References................................................................................................................................24

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Introduction
Strategic management is the process of utilizing the resources of an organization to
reach its goals and objectives (Rothaermel, 2016). Strategic management helps the
management to develop strategies as well as helps to introduce corrective measures the reach
the organization’s strategic intent. The primary objective of strategic management is to gain
competitive advantages by outperforming competitors to achieve and maintain dominance in
the market (David & David, 2016). Flexible companies like KFC and McDonald's often
change their strategies with the changing environment of the organization. Strategic
management aids management in meeting their objectives and goals. It formulates and
implements specific goals and initiatives. Strategic management is not static in nature;
therefore, the entire organization needs to change its strategies with time (Ansoff et.al.,
2018). This report will discuss the strategic management of KFC and McDonald's.
McDonald
Founded in 1940 in the USA, McDonald's was operated by Richard and Maurice
McDonald in California. Richard and Maurice later named their business as a hamburger
stand. In 1955, Ray Kroc purchased the chain from the McDonald brothers. McDonald's was
a small butcher shop in Maywood, Illinois. Ray Kroc started the business by selecting the
first deal with the beef supplier. The headquarter of McDonald's was at Brook; after that, it
was moved to Chicago in June 2018. Since then, McDonald's has opened plenty of
restaurants all over the country, serving the best quality foods to their customers.
Mission, vision, objectives and strengths
The primary vision of McDonald's is to feed the nation and be the first choice of their
customers. McDonald aligns with a global strategy called plan and win, centering the
exceptional customer performance (Varshney & Sharma, 2018). McDonald’s marketing mix

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or 4P aid the company in reaching its corporate mission. 4P’s are price, place, product, and
promotion (Išoraitė, 2016). The objectives of McDonald's includes serving good foods to
their customers, be socially responsible, and provide good returns to their shareholders. They
also provide quick services and value for money foods to their customers. Their main aim is
to maintain good customer satisfaction. The business strategy of McDonald's is to make
quality fast foods available to their customers at a competitive rate as well as achieving target
profit by mitigating the cost of their products.
Strength and weaknesses
Every organization has strengths and weaknesses over its competitors. Strength aids
the organization to survive and dominate the market, whereas weaknesses refrain the
company from surviving in the market (Phadermrod, Crowder, & Wills, 2019). The following
are the internal strength and weaknesses of McDonald's.
Strengths
 The quality of the products of McDonald's is at superior level. It was only possible by
the automation of activities. This aided the company to measure ups and downs of the
market based on the demand condition of the market (Manova, & Yu, 2017).
 Merger and acquisition assisted McDonald's build and reliable and robust supply
chain (Masoumi, Yu, & Nagurney, 2017).
 Successful market strategies for products.
 Strong dealer community assists McDonald to promote their business as well as aids
them to attract more customers towards their business.
 High customer satisfaction through dedicated customer resources management
department (Belias et.al., 2017).
 Highly skilled and efficient workforce through training and learning programs.

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Weaknesses
 A gap in product range provides a new competitor to gain sufficient market
advantages.
 With limited success outside the core business, McDonald is facing challenges in
moving their product segments.
 Improper forecasting of product demand resulting in higher inventory in both houses
and in the channel (de Winter, 2017). Higher inventory affects the long-standing
product growth of the company.
 Financial planning not done efficiently, affecting the strategies of McDonald's.
 Positioning and selling proposition of products are not defined, resulting in attacks
from their competitors.
Internal Factor Evaluation Matrix (IFE)
STRENGTHS Weight Rating Weighted Score
Superior quality
products
0.20 4 0.80
Streamlined business
operation through
merger and
acquisition
0.09 3 0.27
Successful market
strategies
0.10 2 0.20
Strong dealer
community
0.10 3 0.30

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Highly skilled
workforce
0.13 4 0.52
High customer
satisfaction through
CRM
0.10 4 0.40
WEAKNESSES Weight Rating Weighted score
Gap in product range 0.04 1 0.04
limited success
outside core
business
0.08 2 0.16
Improper forecasting
of product demand
0.05 2 0.10
Ineffective financial
planning
0.09 1 0.09
Undefined selling
proportion of
products
0.02 1 0.02
TOTAL 1.00 2.90

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Opportunities
 Lower inflation rate aids McDonald to bring more steadiness in the market. This will
also assist in lowering the interest rates to the customers of McDonald's.
 Through the implementation of new technologies and government free trade
agreement, McDonald has the opportunity to enter the emerging market.
 Diminishing the cost of transportation will bring down the cost of the product of
McDonald's, assisting them to boost their profitability in the business.
 Invest in adjacent products with the help of stable free cash flow. This will enable
McDonald to manufacture products from other categories.
 New tendencies of consumer behavior will open a new market for McDonald,
assisting them in building revenue streams more easily and diversifying their products
(Szmigin, & Piacentini, 2018).
Threats
 Changes in the buying behavior of consumers is a threat to existing infrastructure.
 Increased competition pressurizes sales, affecting profitability negatively.
 Imitate of fake and low-quality products will not only impact the sales of McDonald
but also loosen their market grip.
 No supply of innovative products will lead to a high and slow swing in the sales of the
company.
 New environmental regulations are a hazard to certain product categories of
McDonald.
 Liability laws affect the liability claims of McDonald.
External Factor Evaluation Matrix (EFE)
OPPORTUNITIES Weight Rating Weighted Score

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Low inflation rate 0.15 4 0.60
Adoption of new
technologies
0.12 3 0.36
Decrease in cost of
transportation
0.14 2 0.28
Stable cash flow 0.10 4 0.40
New trend in
consumer behaviour
0.08 1 0.08
THREATS Weight Rating Weighted score
Changes in buying
behavior
0.04 1 0.04
Increased
competition
0.08 2 0.16
Imitation of low
quality products
0.06 3 0.18
No supply of
innovative products
0.07 1 0.07
New environmental
regulations
0.09 1 0.09
Liability laws 0.07 2 0.14

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TOTAL 1.00 2.40
KFC
Colonel Harland Sanders founded Kentucky Fried Chicken, known as KFC. Sanders
was a roadside seller who sold fried chickens in Kentucky. The first franchisee of KFC was
opened in Utah in 1952. KFC popularized fried chicken in the fast-food industry, challenging
the dominance of the hamburger. The rapid expansion of KFC made Sanders sell it to the
group of investors. During 1970 and 1980, the market of KFC was mix fortuned. KFC was
one of the first fast-food chains of America, which was expanded internationally, opening its
outlets in Canada, UK, Mexico, and Jamaica.in 1970, KFC was sold to Heublein. He again
sold it to R.J. Reynolds. R.J. Reynolds sold it to PepsiCo.
Mission, vision, objectives and strategies
The mission of KFC is to increase and maintain the quality of their fast foods in the
world industry. KFC aims to capture the world market by providing the best in class fast
foods to their customers. Due to the expansion, their primary aim is to capture the market of
fast food, which will assist them to increase profitability. Along with the market acquisition,
KFC is also focused on satisfying its customers by providing the best quality food products.
KFC is focused on being a leading foodservice group in the ASEAN region, delivering the
best quality foods to their customers consistently. They are also focused on selling their food
in a fast, friendly environment that charms the health-minded consumers. The primary
objective of KFC is to expand its markets in urban cities. They are also focused on innovating
food products, which will assist them in becoming the top brand in the fast-food industry.

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Strength
 Over the years, KFC is generating a good return from capital expenditure by the
successful execution of new products, which is helping them to generate a good
revenue stream from the market (Cordis & Kirby, 2017).
 KFC has been investing in strengthening its brand portfolio over the years. This will
be helpful in expanding its business globally (Aaker, 2020).
 KFC has a very strong base of reliable suppliers in the market, which enables them to
overcome supply chain problems.
 KFC has strong financial years with a good profit margin over the past five years.
 Diversified and skilled workforce resulting in an increase of reputation in the market.
Weakness
 Though the financial position of KFC is sound, profitability ratio and percentage of
net contribution are not showing the appropriate condition of the company. These
ratios are below the average of the industry.
 KFC needs more investments to implement new technologies to remain in the market.
To expand its business, huge investments are required (Taneja, 2016).
 The organizational structure is not flexible; therefore, product expansion is not
possible.
 KFC failed to merge firms of different work cultures, which is a barrier towards
expansion.
 KFC has a high erosion rate in the workforce compared to other industries.
Internal Factor Evaluation Matrix (IFE)
STRENGTHS Weight Rating Weighted Score
Good return from 0.15 4 0.60

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capital expenditure
Resilient brand
portfolio
0.18 3 0.54
Strong base of
suppliers
0.12 3 0.36
Good profit margin 0.14 3 0.42
Diversified
workforce
0.13 4 0.52
WEAKNESSES Weight Rating Weighted score
Weak P/E ratio 0.04 1 0.04
Lack of
investments
0.08 2 0.16
Inflexible structure 0.05 2 0.10
Failure in merger 0.02 1 0.02
High erosion rate 0.08 3 0.24
TOTAL 1.00 3.00
Opportunities
 Core competencies in other similar products can be a factor of success.
 New tax policies aided KFC to increase its profitability.

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 Economic uptick helped KFC to acquire new customers and increase its share in the
market.
 Implementation of the new strategy is an opportunity for KFC to practice alternate
pricing strategies in the market.
 Market development will increase the competitiveness of KFC.
 New trends in consumer behavior will open up a new market for KFC, which will
help diversify new products, generate new revenue streams.
Threats
 The rising level of raw material is a threat to the profitability of KFC.
 New technologies of competitors and market disruption can be a threat to the future of
KFC.
 The growing strength of local distributors is a severe threat to KFC.
External Factor Evaluation Matrix (EFE)
OPPORTUNITIES Weight Rating Weighted Score
Core competencies 0.18 4 0.72
New tax policies 0.12 3 0.36
Economic uptick 0.09 4 0.36
Implementation of
new strategy and
market development
0.19 4 0.76
New trends in
consumer behavior
0.17 1 0.17

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THREATS Weight Rating Weighted score
Rising raw materials 0.09 1 0.09
New technology of
competitors
0.10 3 0.30
Strength of local
distributors
0.05 1 0.05
TOTAL 1.00 2.81
MATRICES
Competitive Profile Matrix (CPM)
McDonald KFC
Critical
success
factor
Weight Score Weighted
score
Score Weighted
score
Product
quality
0.25 3 0.75 4 0.80
Strong
dealership
0.20 2 0.40 3 0.60
Strong
supply chain
0.10 3 0.30 2 0.20
Customer 0.25 3 0.75 4 0.80

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satisfaction
Market
strategy
0.10 2 0.20 3 0.30
Skilled
workforce
0.10 2 0.20 4 0.40
TOTAL 1.00 2.60 3.10
SWOT Matrix
McDonald
STRENGTH
 Superior product quality
 Strong dealer community
 High skilled workforce
WEAKNESS
 Inefficient financial planning
 The gap in the product range
OPPORTUNITIES
 Low inflation rate
 Adoption of new technology
THREATS
 No product innovation
 Increase in competition
KFC
STRENGTH WEAKNESS

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 Good revenue stream
 Strong brand portfolio
 Good profit margin
 Need for investment
 Lack of investments
OPPORTUNITIES
 Tax policies
 Market development
THREATS
 The rising level of raw materials
 Technologies of competitors.
Quantitative Strategic Planning Matrix (QSPM) of McDonald
Key internal
factors
Market development Market penetration
Internal
strengths
Weight AS TAS AS TAS
Product
quality
0.20 2 0.40 3 0.60
Strong dealer
community
0.10 2 0.20 3 0.30
High skilled
workforce
0.13 2 0..26 2 0.26
Successful
market
0.10 4 0.40 3 0.30

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strategy
Streamlined
business
operation
through
merger and
acquisition
0.09 2 0.18 3 0.27
High customer
satisfaction
through CRM
0.10 3 0.30 4 0.40
Internal
weakness
Gap in product
range
0.04 2 0.16 1 0.08
limited
success
outside core
business
0.08 1 0.05 2 0.10
Improper
forecasting of
product
demand
0.05 3 0.27 2 0.18
Inefficient 0.09 2 0.18 1 0.09

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financial
planning
Undefined
selling
proportion of
products
0.02 1 0.02 2 0.04
1.00
Key external
factors
Opportunities
Low inflation
rate
0.15 2 0.30 3 0.45
Adoption of
new
technologies
0.12 2 0.24 3 0.36
Decrease in
cost of
transportation
0.14 2 0.28 2 0.28
Stable cash
flow
0.10 2 0.20 3 0.30
New trend in
consumer
0.08 1 0.08 2 0.16

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behaviour
Threats
Changes in
buying
behaviour
0.04 1 0.04 1 0.04
Increased
competition
0.08 2 0.16 1 0.08
Imitation of
low quality
products
0.06 1 0.06 2 0.12
No supply of
innovative
products
0.07 2 0.14 1 0.07
New
environmental
regulations
0.09 1 0.09 2 0.18
Liability laws 0.07 1 0.07 1 0.07
1.00
Total Sum of
Attractive
Score
4.08 4.73

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Quantitative Strategic Planning Matrix (QSPM) of KFC
Key internal
factors
Market development Market penetration
Internal
strengths
Weight AS TAS AS TAS
Superior
quality
products
0.20 4 0.80 4 0.80
Streamlined
business
operation
through merger
and acquisition
0.09 3 0.27 3 0.27
Successful
market
strategies
0.10 4 0.40 3 0.30
Strong dealer
community
0.10 3 0.30 4 0.40
Highly skilled
workforce
0.13 3 0.39 4 0.40
High customer 0.10 4 0.40 3 0.30

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satisfaction
through CRM
Internal
weakness
Gap in product
range
0.04 1 0.04 1 0.04
limited success
outside core
business
0.08 2 0.16 1 0.08
Improper
forecasting of
product
demand
0.05 1 0.05 2 0.10
Inefficient
financial
planning
0.09 2 0.18 1 0.09
Undefined
selling
proportion of
products
0.02 1 0.02 1 0.02
1.00

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Key external
factors
Opportunities
Core
competencies
0.18 3 0.54 2 0.36
New tax
policies
0.12 2 0.24 3 0.36
Economic
uptick
0.09 3 0.27 2 0.18
Implementation
of new strategy
and market
development
0.19 2 0.38 3 0.54
New trends in
consumer
behaviour
0.17 2 0.34 1 0.17
Threats
Rising raw
materials
0.09 1 0.09 2 0.18
New
technology of
0.10 2 0.10 1 0.10

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competitors
Strength of
local
distributors
0.05 1 0.05 2 0.10
1.00
Total Sum of
Attractiveness
scores
Advantages and disadvantages
These methods can be applied to understand the market position of the firm. SWOT-
analysis helps the firm to identify its core competencies (Gürel, & Tat, 2017). Through the
QSPM, these firms can understand their market position (Zulkarnain, Wahyuningtias, &
Putranto, 2018). However, SWOT analysis becomes subjective without the proper
information. The QSPM includes intuitive judgments and assumptions, which are not valid to
some extent.
Recommendations
From the observation, it is clear that KFC has better market position than McDonald does;
therefore, there are some strategies and objectives which can help these firm to have better
grip in the market share. McDonald’s primary objective includes serving good food in a
healthy environment. KFC’s long-term strategic objective includes improve social
responsibility and increase profit margin. Therefore, it is suggested that both of these

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companies should connect their long-term goals with their core values that will aid them in
achieving their long-term objective.
Conclusion
This study signifies the importance of strategic management as well as focuses on different
matrices to observe the market position of KFC and McDonald. From the report, it has been
found that KFC is in a better position than McDonald is by following certain strategic
objectives. KFC is in a good financial position than McDonald's with a higher profit margin.

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References
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strategic management. Springer.
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