SWOT Analysis of Macdonalds in the Post-Brexit Era

This assignment content is about a SWOT analysis of Macdonalds, a fast-food chain, and its competitor KFC. The strengths of Macdonalds include providing healthy food options and faster services. Its opportunities lie in expanding globally, increasing employment opportunities, and enhancing revenue. However, the threats it faces are customers' growing health consciousness, local competition, currency fluctuations due to recession, and Brexit's impact on trade agreements. KFC is a market leader with a strong brand image, focusing on providing tasty food and fast services. Macdonalds needs to match KFC's standards to become a market leader.

Total Quality
Management

Abstract
TQM is essential part and help in achieving long term success to the corporation.
Implementation of TQM supports the firms in improving efficiency and quality of their products.
This paper has discussed the total quality management within McDonalds. Several methods of
implementing bench marking has been highlighted in the study. Challenges faced by the firms in
this respect are discussed and recommendations have been provided for the improvements.

Table of Contents
1. INTRODUCTION........................................................................................................................................4
2. BENCHMARKING......................................................................................................................................4
Definition of Bench-marking...................................................................................................................4
Reasons of Bench-marking.....................................................................................................................4
3. IMPLEMENTATION..................................................................................................................................6
Prerequisites required to benchmark.....................................................................................................6
Methods of implementation...................................................................................................................7
Challenges face by organization in bench-marking.................................................................................9
4. RECOMMENDATION................................................................................................................................9
5. CONCLUSION.........................................................................................................................................12
REFERENCES .............................................................................................................................14

1. INTRODUCTION
 Benchmarking is essential for measuring business performance and overall management
of organization effectively. It considers as a tool for developing plan to improve entity’s
activities.
 The present report is based on understanding different aspects of McDonalds related to
total quality management of business organization (Al-Tarawneh, 2014.) It is one of the
largest fast food provider company of UK to a million people.
 In this regard, significance of bench-marking to gain entire management of firm can be
determined. Including this, different processes related to implementing benchmarking
practices are understood.
 Including this, organization's benchmarking against KFC can be determined through this
study. Moreover, difficulties in raising practices are recognized (Al-Tarawneh, 2014.).
Along with this, learners are able to learn solutions to overcome the issues occur to gain
total quality management of firm efficiently.
2. BENCHMARKING
Definition of Bench-marking
Bench-marking is the measurement tool that helps in measuring the policies, programs
and products of an organization against set standards. It is the practice of an entity for making
comparison between key metrics of operations with other competitor brand. Scientific
management theory of F.W.Taylor is the great concept that helps in analysing the economic
efficiency, labour productivity of an organization. By this way firms like McDonalds can set
benchmark by comparing its performances against the industry performance. F. Taylor has
introduced the scientific management theory of benchmarking. This concept explains that firm
like McDonalds have to replace their working met hods, train staff effectively rather them
leaving them independently, follow scientifically developed methods, divide work. With the help
of these principals cited firm will be able to mat chg the standards. As McDonalds is trying to
enhance its quality of food material thus, it is giving training to its staff members so that they

raise their skills and reduce wastage. It helps in increasing quality of production by this way
revenues of the organization can get improved.
Reasons of Bench-marking
Small or big organizations both have aim to earn more profit and sustain in the corporate
market for longer duration. There are several reasons for bench-marking:
 Improve productivity is one of the main reason of bench-marking in the McDonalds.
 For maintaining the relationship with clients is another reason for bench marking in the
cited firm (Al-Tarawneh, 2014.)
 Addressing lacking points are another rationale of using this concept in the organization.
So that management can make strategies to fill the gap and can improve their quality and
performance (El-Wardani & Luyanage, 2015)
 To gain competitive advantage for increasing sustainability is another reason for bench-
marking.
 As KFC is the biggest competitor of McDonalds, cited firm compare its products
and services with the KFC and try to match the standards. McDonalds focuses more on
healthy food and fast services whereas KFC focuses on the test and needs of consumers.
KFC offers wide range of chicken food to the users whereas McDonalds concentrates on
burgers and limited food items (El-Wardani & Luyanage, 2015) . KFC services are fast
but products are costly, on other hand McDonalds products are comparative of low price.
KFC does not have home delivery services for the consumers but McDonalds offer this
facility to its customers. So in this respect McDonalds needs to enhance its standards
and it has to provide wide range of products to the consumers so that they get attracted
towards the brand.
Benchmarking is considered as a best tool to measure business performance in total
quality management tool that impacts on overall development of organization. However,
under this process, strategic management of entity including financial position, production
and distribution system, varieties of ideas are generated for better service quality and
improving efficiency of McDonalds (Larkin, 2015). Therefore, as per proper management

different aspects and organization’s effective tools are determined. It is helpful for increasing
in customer satisfaction level that impacts on productivity and profitability of entity. In
accordance to this, systematic management of business operations and positive environment
of entity is gained. In addition, benchmarking tools to measure customer satisfaction level
and cost per unit of measure and cycle time of product per unit measure. Thus, total quality
management regarding entire business operations are considered through this measurement
(Larkin, 2015) It creates different ideas and techniques for improving service qualities of
products and organization’s effectiveness is obtained. Significance of benchmarking can be
described as follows:-
Focuses on best practice to recognize next practices:- Benchmarking is interrelated with
total quality management of McDonalds.
Helpful in continuous growth of organization:- Proper performance of business entity is
obtained that impacts on regular development of company. It is interlinked with economic
structure and overall business operations to improve efficiency (Dale, , 2015.). Therefore,
benchmarking is considered as useful for rapid growth that affects productivity and profitability of
McDonalds.
Maintains competitive edge:- There is actual position of specific company is determined
through using benchmarking tool. For making place in market, competition is maintained for
long term sustainability (Dale, , 2015.). Thus, it enhances strength for facing competition by
recognizing market position related to customer satisfaction and performance of employees.
Including this, product value and market position of firm is recognized through this
competitive edge effectively.
Concentrates on performance measurement:- For analysing employees and business
performance benchmarking plays crucial role that impacts on overall business operations. As
per performance measurement, different ideas are generated for improving efficiencies.
However, adequate organizational structure of McDonalds is created to implement business
activities of retail sector organization (Mehta, & et., 2014)
Reasons for benchmarking:- Thus, benchmarking is significant for analysing business
performance and actual business operations. It is helpful for comparing organization's

activities with its competitive entity. Therefore, different ideas are generated for enlargement
of entity as well increasing its efficiency. Hence, it is determined that benchmarking is
crucial for enhancing productivity, profitability and varieties of strategies for making place in
market for long term sustainability. It is useful for gaining high level of customer
satisfaction.
3. IMPLEMENTATION
Prerequisites required to benchmark
McDonalds needs to do market research and has to analyses the requirements of the
consumers, accordingly it has to modify its products. Apart from this, cited firm has to analyses
the strategies of KYC so that according to their planning it can set its strategies to get high
returns (Mehta, & et., 2014) McDonald's focuses on Scientific management theory of
.F.W.Taylor and looks upon the empiricism, work ethics, elimination of wastage,
standardization. It operates its business in such manner so that it can meet with the standards and
can sustain in the competitive world. It gives training to its staff so that they can get to know
about new standards and can perform their work accordingly. It adopts new technologies so that
firm can enhance its efficiency level.
Methods of implementation
Benchmarking practices can be implemented by proceeding following steps:-
Preparation and planning:- At first, preparation and planning is required for measuring entity’s
position effectively (Talib, 2013) Through this process, actual position of firm and different
strategies are prepared for total quality management of business organization. Need for
benchmarking and its significance is obtained regarding methods to be followed for project
accomplishment.
Data collection:- After determining need and characteristics of benchmarking, data are collected
related to measurement of business performance of McDonalds (Talib, 2013). In this regard,
different methods are used for benchmarking as well adequate systems are recognized for
collecting information. Thus, data collection is related to choose appropriate solution and

effective techniques to be implemented for organization’s effectiveness (Klee & Westgard, ,
2014).
Data analysis:- interpretation of collected information is done through this system. It is crucial
before implementing any action plan to recognize the planning procedures and preparing
systematic steps to gain efficiency. In accordance to this, it presents benchmarks’ strength and
weakness sustaining value. However, manager of the McDonalds recognizes company’s
performance and prepares plan to create bridge for reaching out the set goals. It generates
different ideas for better performance and implementing effective business operations. Thus,
actual structural framework and business performance is determined through this step for
competitive advantages (Klee & Westgard, , 2014).
Reporting:- Under this process, interrelated data are recorded and reported for present clear and
easy way to obtain performance. Hence, accurate data are reported in systematic manner that
impacts on further business operations (Nicholas, 2016). It plays effective role in understanding
the different practices and improving performance of benchmark effectively. It is interrelated
with increasing efficiency of McDonalds to create balance for business operations.
Learning from best practices:- In this process, for mutual benefit top performing entities share
their best practices (Nicholas, 2016). Therefore, choosing the most appropriate practice remains
helpful for benchmarking. It is required for bench markers to establish best practices for
effectiveness of McDonalds.
Planning and developing action plans:- It is valuable for preparing strategies and its
implementation to increase efficiency and enhance quality services of firm. It is beneficial for
each and individual organization to improve effectiveness and enhancing performance at high
level. It is useful for creating balance of bench markers and companies (Khanam, 2016)
Institutionalizing learning:- In this process, value and position of benchmarking is obtained.
Therefore, positive and negative both aspects are emerged for measuring company’s
performance regarding providing overall business activities. However, effective institutionalizing
learning is determined for improvement and learning different things (Khanam, 2016). It
influences McDonald’s business activities and various learning styles for improving working

efficiencies of employees as well gaining high level of customer satisfaction towards goods and
services provided by entity.
It influences overall business activities regarding business and competitive strategies for
sustaining its place in market. In this regard, step by step different procedures are followed for
strategic management and effectiveness of firm at high level (Macdonald. 2016). Moreover, it is
useful for creating positive environment and enhancing competitive strategies for making place
in market. Including this, different tools and techniques are obtained for choosing best
appropriate quality services of firm. In accordance to this, an effective organizational structure is
created that presents strength and weakness of entity, thus, proper benchmarking and verities of
ideas are generated for improving efficiency and taking competitive advantages effectively
(Talib F. , 2013. ). Therefore, it is determined that applying benchmarking stages in systematic
process leads to increase efficiency and increasing in demand. Along with this, systematic
process leads to competitive strategies and impacts on its market position. Thus, different ideas
are presented regarding coordination of employees and customer satisfaction of consumers that
impact on productivity and profitability of firm. In this regard, systematic management of entire
business operations is presented considers as total quality management. Hence, overall activities
that form organizational structure is recognized through this process that affects benchmarking
and business performance in monetary and non-economic terms (Macdonals. 2016). It is
recognized that business and competitive strategies of firm can be obtained through this process
system (Talib, 2013).
Comparison of McDonals and KFC
Year 2016 McDonalds KFC
gross margin 41.45 (Morningstart. 2017) 30.60
operating margin 31.46 11.12

EBT margin 27.89 9.19
return on assets% 13.59 7.28% (Morningstart, 2017)
return on equity% 191.93 16.29
Gross profit margin:- It is determined by deducting gained revenue to incurred expenses.
Therefore, it is determined that MCDonals' earned gross profit as 41.45% while KFC earns
30.60%. In comparison of both data, it is comparised that McDonald's profit margin capacity is
better than KFC.
Operating margin:- it is calculted as percentage of operating expenses to overall net
sales. Therefore, as per comparison, it is obtained that McDonald's position is quite better than
KFC. Thus, financial position of MCD is better than kFC therefore different innovative
techniques can be applied for increasing efficiency of organization at high level.
EBT margin:- It stands for earning before tax. As per comparison between McDonald's
and KFC position is related to making place in market and presenting financial position of
organization is determined. Under which, different ideas can be implemented for further business
operations.
Return on assets%:- Under this process, return on assets is determined. In accordance to
this, as per data interpretation, it is evaluated that McDonald's % is 13.59% while KFC's % is
7.28%. McDonald's position is quite good in comparion to KFC. Therefore, further
implementation can be implemented effectively.

Return on equity %:- Through this system, return on equity is determined, Under which,
McDonald's position is better than KFC. In this regard, different ideas can be generated for
increasing efficiency and maintaining attraction of shareholder regarding share value.
Challenges face by organization in bench-marking
As if company does not have proper knowledge and skilled person hen it would not be
able to implement bench marking process successfully. That is the biggest challenge for the firm

that prohibited them in this process. It enhances the cost of the McDonalds that is the challenge
for the cited firm. Because for meet the standards cited firm will have to spend a lot amount in
training and implementing new technologies (Talib F. , 2013. ). Apart from this, losing the
originality is another challenge for the company because for meet the standards it will have to
modify its products that can spoil its originality. It might be possible that loyal consumers do not
like the modify products of McDonalds. It is very difficult for the management of cited firm to
make employees understand about the new process, they resist the changes so it can be difficulty
for the organization too.
4. RECOMMENDATION
The report is presented that benchmarking is helpful for improving effectiveness in
business operations. However, it is required for understanding its different aspects regarding
different aspects of business performance that forms organizational structure. In this regard, it is
needed to be focused on entire series of firm that is interlinked with environment and market
position of entity to gain long term sustainability in market. However, total quality management
including business performance and different services provided by organization is analysed that
provides different ideas for increasing market position and effectiveness of entity at high level.
Thus, preparing strategies and planning procedures related to business operations are required for
business as well competitive strategies. Thus, actual performance of firm is measured through
this process to marketing, financing and different sectors’ growth. Hence, total quality
management related to arrangement of entire business entity’s functions can be obtained those
impacts on firm’s market position and system for production and distribution of goods. In
accordance to this, recognizing business activities are helpful for implementation and improving
efficiency for long term effectiveness of organization at large scale.
Though benchmarking is quite good for effectiveness of organization but it has some
issues those impacts on management of business entity. In this regard, it is determined that
management of overall activities are risky for maintaining good reputation in market. However,
dis systematic transaction of goods is determined to reach out set target and improving
qualitative services of firm. Including this, it is also remains risky for maintaining customer
satisfaction towards goods and services provided by firm (Talib F. , 2013. ). In addition to this,
employee’s performance a creating understanding sense considers as a difficult task for

organization to meeting goals. Moreover, measuring business performances sometimes consider
as inaccurate that impacts on overall business activities and operations of McDonalds. In
addition to this, implementing benchmarking has to face many issues related to inaccurate data
or information and fluctuate market structure. It impacts on business environment and different
services of firm. It includes customer satisfaction level, balance of production and distribution
system of goods, employee’s performance and several tools that affect management and different
business operations. Along with this, it is also determined that changes in external environmental
factor or uncertain changes affect business environment and strategy (Dale, , 2015.)
As per critical evaluation, obstacles are occurred in McDonalds related to benchmarking
including internal focus, unrealistic time frame, poor team composition, improper emphasis etc.
In this regard, varieties of problems are determined that disturb environment of entity. For
example; lack of coordination of team members for efficiency and unsystematic management of
business operations is obtained. However, improper time scale and inefficient team structure is
determined that is against of organization's effectiveness.
 McDonalds should train its staff members and can give rewards to them by this way they
will not resist the changes and will support the firm in modifying operations.
 As due to implementation of technologies cost of the company increases, so for
recovering the cost cited firm can use effective marketing strategies that can attract
more customers towards the brand. It will enhance sales of the organization and
revenues will get increased.
 McDonalds should adopt such standards which cannot harm its originality, it just
improve quality. It should focus on consumers’ needs and desires so that people like its
new products as well.
 McDonalds should track trends and shifts so that it can modify its fries, meat and patties
according to market trends. Cited firm can fast its services so that waiting time can be
minimized.
 McDonalds should use bar charts for comparing budget so that sales figures can be
estimated. Run chart is another option that can be used by the cited firm that can help in

comparing the budget against sales. That would help in matching with the standard and
it will give competitive advantage to the organization.
5. CONCLUSION
The report is concluded that benchmarking is measurement tool for recognizing
organization’s business performance. It is interrelated with total quality management and overall
business activities of firm. In this regard, different factors of benchmarking and improving
McDonald’s efficiency tools are determined. In addition to this, methods to implement
benchmarking and its significant role in effective business operations is considered. However,
connections of benchmarking with entire business activities are determined. Moreover, issues
occur at workplace for benchmarking and solutions to recover these issues are presented. In this
regard, use of measurement tool for competitive advantage and presenting market position is
obtained. Along with this, accurate summary related to role of benchmarking in organization’s
effectiveness is recognized. Total quality management and presenting entire developmental tools
for maximum customer satisfaction and effective employees ‘coordination for firm’s efficiency
is determined through this study. Hence, overall benchmarking significance and crucial role for
measuring business performance and increasing in qualitative services of firm is presented.

6. REFERENCES
Books and Journals
Al-Tarawneh, H., 2014. The Utilization of Benchmarking in the Jordanian Banking
Sector. Journal of Management Research. 890(6). pp.49.
El-Wardani, R. and Liyanage, J.P., 2015. An assessment of benchmarking practice relating to
complex engineering assets: a case study from an oil and gas production company.
In Proceedings of the 7th World Congress on Engineering Asset Management. 89(5).
pp.207-216.
Larkin, S. and et..al., 2015. Benchmarking agency and organizational practices in resilience
decision making. Environment Systems and Decisions. 35(2). pp.185-195.
Dale, B., 2015. Total quality management. John Wiley & Sons, Ltd.
Mehta, N., Verma, P. and Seth, N., 2014. Total quality management implementation in
engineering education in India: an interpretive structural modelling approach. Total
Quality Management & Business Excellence. 25(1-2). pp.124-140.
Talib, F., Rahman, Z. and Akhtar, A., 2013. An instrument for measuring the key practices of
total quality management in ICT industry: an empirical study in India. Service
Business. 7(2). pp.275-306.
Klee, G.G. and Westgard, J.O., 2014. 7 Quality Management. Tietz Fundamentals of Clinical
Chemistry and Molecular Diagnostics. 890(6). pp.90.
Nicholas, J., 2016. Hoshin kanri and critical success factors in quality management and lean
production. Total Quality Management & Business Excellence. 27(3-4). pp.250-264.
Khanam, S., Siddiqui, J. and Talib, F., 2016. Role of information technology in total quality
management: a literature review.
Talib, F., 2013. An overview of total quality management: understanding the fundamentals in
service organization. Browser Download This Paper.
Online

Macdonals. 2016. [Online]. Available through: <www.Macdonals.uk>. [Accessed on 11th March
2017].
Morningstart, 2017. [Online]. Available through:
<http://financials.morningstar.com/ratios/r.html?t=MCD&region=usa&culture=en-US>.
[Accessed on 11th March 2017].
Morningstart, 2017. [Online]. Available through:
<http://financials.morningstar.com/ratios/r.html?t=3420&region=jpn&culture=en-US>.
[Accessed on 11th March 2017].

Appendix
KPI
Year 2016 Macdonalds KFC
gross margin 41.45 (Morningstart. 2017) 30.60
operating margin 31.46 11.12
EBT margin 27.89 9.19
return on assets% 13.59 7.28% (Morningstart, 2017)
return on equity% 191.93 16.29
SWOT analyses:
Strength
 Strong brand image
 competitive price
 Training programs for employees
development
Weaknesses
 Weak product's development process
 Poor Management
Opportunities
 Internationalization
 Growing economic conditions
Threats
 Health conscious consumers
 Local competitors
 Recession
 Brexit
SWOT analyses is the tool, that can help in knowing the internal and external
environment of the organization that can influence its business operations.

Strength:
Opportunities:
 As cited firm in expanding its business across the world that will help the organization in
gaining huge success and increasing sustainability and profitability of the Macdonalds.
 As economic condition are increasing because of high employment opportunities thus, it
will get huge opportunities to enhance its revenues.
Threats:
 In the modern era customers much more conscious about their health and they avoid to
eat fast food that can reduce the business of the Macdonalds.
 Local competition is high and people like to buy lower cost products. That can harm the
business of the entity.
 In the UK fluctuation in currency is very high recession is the biggest threat that can
influence the buying behavior of customers .
 Due to BRIXIT trade agreements have been changed that can create problems for
Macdonalds because after that it is restricted to operate its business in limited area.
KPI Macdonalds KFC
Products It provides healthy food and has
limited food such as burger,
french frise etc.
It concentrates on providing tasty
food as per the need of
consumers. It has variety of food
items.
Service deliver time Customers have to wait a lot. It delivers speedy services to
clients
Price Lowe price products Costly products
Services (Facilities) It offers home delivery services. It does not offer home deliver
facility.

KFC is the market leader and having strong grand image. Macdonalds has bench
marked the KFC because KFC is one of the biggest competitor of cited firm.
Strength:
 Macdonalds pays more attention of healthy food and fast services. It is the biggest
strength of the organization. On other hand KFC focuses on providing tasty food to its
customers. It provides faster services to its guest as compare to Macdonalds. That is why
KFC has become benchmark for the Macdonalds.
 KFC offers speed services to clients but its item are very costly. It is the strength of the
cited firm because its products are comparatively of lower price.
 Macdonalds strength is that it provides home delivery facilities to its customers, but KFC
does not have this facility.
Weakness:
 Macdonalds concentrates on burgers only, it has limited food items. But as KFC has
variety of products and offer range of chicken items to customers, so it is benchmark for
the Macdonalds and it should enhance its level.
As Macdonalds has great opportunity to become a market leader, it needs to enhance its
standards to become a market leader. Cited firm needs to match the standards of KFC otherwise
it will lose it s business and will reduce its profit.

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