Business Health Check Report: McDonald's Analysis and Development

This report provides a comprehensive business health check for McDonald's, a leading fast-food restaurant chain. It begins with an introduction to the company, its objectives, and the factors impacting its operations. The report then utilizes various analytical tools, including PESTEL, SWOT, and Porter's Five Forces, to assess McDonald's external and internal environments. It evaluates the political, economic, social, technological, environmental, and legal factors influencing the business. Furthermore, it examines the bargaining power of suppliers and buyers, competitive rivalry, and the threats of new entrants and substitute products. The report also includes a SWOT analysis to identify McDonald's strengths, weaknesses, opportunities, and threats. The study then explores potential improvements to the business using Ansoff's Growth Matrix, focusing on market penetration and product development strategies. It also discusses the effectiveness of various business areas and proposes plans for improvement. Finally, the report addresses the current skills of management and staff, and develops plans for their skill development, concluding with recommendations for McDonald's future growth and success.

Business Health
Check

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK1.............................................................................................................................................1
1.1 Objectives of the Businesses.................................................................................................1
1.2 Factors that impact on the business.......................................................................................1
1.3 Potential improvement to the business organisation and operation......................................5
M1 SMART objectives...............................................................................................................6
D1 Analyse how the elements of Ansoff’s Growth Matrix have contributed to improvements.6
TASK 2............................................................................................................................................6
2.1 Effectiveness of the business................................................................................................6
2.2 Develop plans to improve the business, justify their value...................................................7
M2 Evaluate how the effectiveness of areas of the business stipulated.....................................8
D2 Critically analyse how the plans developed in can lead to an improvement.........................9
TASK 3............................................................................................................................................9
3.1 Current skills of management staff.......................................................................................9
3.2 Plans for the development of skills for management and staff...........................................10
M3 Analyse the effect current experience, skills and abilities of management and staff.........12
D3 Methods that can be used to develop the skills of management and staff.........................12
CONCLUSIONS............................................................................................................................12
RECOMMENDATIONS...............................................................................................................13
REFRENCES.................................................................................................................................14

INTRODUCTION
Business health check is present comprehensive evaluation of crucial elements of
business. It is simply, business diagnostic which help in minimising upcoming threats and result
in gaining opportunities (Abdelhak, Grostick and Hanken, 2014). Hospitality is wide and fast
growing sector, so organisation working within respective sector have to check health of their
business. This assignment is based on McDonald's which is part of restaurant industry and
founded in 1940. Founder of company is Richard and Maurice McDonald as well they are
serving at worldwide level. Report will going to discuss Company's environment by conducting
PESTEL, SWOT and porter's five force model. Moreover, For further improvement in business
Ansoff's growth matrix will be use which help in possible improvement. Effective area of
business will be discussed and improvement plan also design. In the end, for for conducting daily
operations present skills of management and staff will be discussed as well as for enhancing
these skills development plan will be designed.
TASK1
1.1 Objectives of the Businesses
McDonald's is American fast food organisation founded in 1940 and its founder is
Richrad and Maurice McDonald. Headquarter of respective food company is at San Bernardino,
California, United States. Moreover, McDonald's is worlds largest restaurant chain by their
revenue because they serve approx. 69 million customers per year over 100 nations and they
have across 37,855 outlets in 2018. they are famous for their cheeseburgers, French fries,
hamburgers, milkshakes, soft drinks and so on at world wide level (Arntz-Gray, 2016).
Every organisation have some objectives same as McDonald's also that may be long term
or short term. McDonald's main objective is to be customers favourite place to eat food. Along
with this they ensure that products offering by them are of high quality.
1.2 Factors that impact on the business
Business environment is dynamic in nature and several modification take place within it
(Brown and et. al., 2014). This is divided within two categories i.e., external and internal both
have wide impact on working of organisations. Thus, for identifying impact of external and
internal factor Several tools will be use by McDonald's explanation of these are as follows :-

PESTEL – It is conducted for examine external business environment factors facing by the
organisation and these are six main areas such as political, economic. Social, technology,
environment and legal factor (PESTEL Analysis of McDonald's, 2019). Explanation of thee
factors in relation of McDonald's are as follows :-
 Political factor – It involve rules and regulations given by government bodies of
particular nation (Chadwick and et. al., 2012). As fast food industry is target of
government initiatives with the aim of improving health and reducing obesity mainly in
European nations which have wide impact on McDonald's. Because of high amount
Sodium and sugar in food which result in common health problems like hypertension,
diabetes, heart disease etc.. thus, to overcome with these respective organisation now
started offering health food. Such as, added protein within their fruit smoothies. Apart
from this, McDonald's is getting affected by government tensions within countries. For
example, Relation of United States with the United Kingdom has been affected as of late.
As well communication with Russia may be questionable.
 Economical factors – This factor have wide impact on the working of McDonald's at
every level such as international, national and local. For instance, economic recession in
2008 fit financial condition of company (Chang and et. al., 2016). Thus, fluctuation
economical condition of any nation have negative and positive both impact on working of
McDonald's.
 Social factors – Modifications in consumers taste result in impact of McDonald's sales.
Such as, growth within coffee industry result in development of McDonald's McCafe
menu for offering alternatives to Starbucks. Although, people are becoming more health
conscious which result in reducing sales of respective company. Thus, for increasing
sales and market sustainability McDonald's have to add some more in their menu such as
low fat choice.
 Technological factors – Advancement is technology have positive impact not only have
on their business process but also help in developing greater connection with customers
(Ghaddar and et. al., 2012). For instance, technology has strength McDonald's through
different channel of ordering customers like store self service and online ordering.
 Environmental factors – It include factors such as company have to make sure that,
their supply chain have to be environment friendly as well as ethical. Although, one of

the major environmental issue faced faced by McDonald's is within food production
which involve problems such as deforestation and food miles (Goins and Pye, 2013).
Respective organisation addressing this issue by purchasing beef and milk from UK
farmers. Legal factors – It include regulatory framework which have wide impact on the working
of organisation. As well high level of regulation result in stifle business growth whereas
whilst lower level result in making growth. For instance, in UK Zero working hour uses
has been increasing by which company is gaining more flexible workers which is useful
for food industry organisation such as McDonald's.
Porter's five forces – It is Framework developed by Michael Porter in 1979 which represent five
individual forces that shape entire extent of competition in the industry. Explanation of these
forces in relation of McDonald's are as follows :-
 Bargaining power of suppliers – Raw material needed by McDonald's such as chicken
and potatoes for their production purpose is available by several suppliers (Hyppönen,
Hämäläinen and Reponen, 2015). Thus, for respective organisation bargaining power of
suppliers is low. As well as there are number of suppliers who want to supply raw
material to respective company. Thus, suppliers have no position to bargain for
increasing price.
 Bargaining power of buyers – For McDonald's bargain power of buyers is strong
because there are several options available within market. Thus, customers easily switch
from one to another if they are not satisfied. Loyalty of customers toward particular brand
is decreasing day by day because of many competitors.
 Rivalry among existing firms – Fast food is one of most competitive sector in today's
business environment. Thus, for McDonald's competitive rivalry is strong because there
are several competitors of respective business firm such as Wendy's, burger king, Johnny
Rockets as well as several other local restaurants also.
 Threat of new entrance – For McDonald's threat of new entrance is moderate because
there is requirement of huge funds as well as resources for entering within fast food
sector (Laws, 2015). Thus, respective organisation have low level of threat from new
entering business firm as well as they have strong presence at worldwide level because of
that threat of new entering is low.

 Threat of substitute products and services – McDonald's have strong threats of
substitute because there are several other organisations offering same products such as
KFC, Pizza and other home cooked meal (Lehto, Oinas-Kukkonen, Pätiälä and Saarelma,
2012). Although, customers are becoming less loyal towards organisations now a days
which result in easy switching towards other company. Thus, for McDonald's threats of
substitute product and services are high.
SWOT analysis – This is internal factors analysis tool which include strength, weakness,
opportunity and threats (McDonald's SWOT Analysis, 2019). Explanation of all these in relation
of McDonald's are as follows :-
Strength Weakness
 McDonald's have its strong brand
name, image and reputation. As it is no.
one fast food organisation through sales
with over 31,000 restaurant in almost
120 countries.
 McDonald's was consider as first who
enter in fast food industry as well as
initiated to other brand also for entering
within same sector. When customer
thing about fast food they firstly
remember McDonald's.
 One of the major weakness is their
environmental issues because
McDonald's utilise HCFC-22 for
making polystyrene which result in
ozone depletion (Lencioni, 2012).
 Respective company have high
employees turnover ratio as every year
many of workers are fired out the
restaurant. As well several other quit
mainly part time employees due to low
salary.
Opportunity Threat
 As people are becoming health
conscious, thus McDonald's have
opportunity to add some healthy as well
as diet food in their menu (Lundén and
et. al., 2014).
 Appearance of freebies and discount
help them in gaining more customers,
because new trends are raising and
 Obesity is founding more in Americans
which result in decreasing sale of fast
food chain such as McDonald's.
 Respective organisation is facing
competition from some strong peers
such as 11O' Clock Stock pick Yum!
Brands and Burger king.

people like discount more.
1.3 Potential improvement to the business organisation and operation
Ansoff's matrix is marketing planning model which assist an business in determining
their products as well as market growth strategy (Philbin and Kennedy, 2014). Although, this
model is essential for strategic marketing planning and it can be implement for looking at
opportunities to growth in revenue by developing new product or services as well as through
entering in new market. Ansoff matrix have four different growth strategies explanation of these
are as follows in relation of McDonald's :- Market penetration – In this development strategy organisation want to achieve growth
by their existing product within present market segment with the aim of increasing
market share. Moreover, market penetration is least risky because it leverage many of the
firm existing resources and capabilities. This market growth strategy is not much suitable
for McDonald's because after some time offering of organisation result in decreasing
satisfaction level of existing customers. Product development – In this, Organisation develop new product by targeting their
present market segments (Porter and Tanner, 2012). This will be less risky for company
because they know about their customers taste and preferences as well bring new product
according to their requirement. For McDonald's product development strategy will be
suitable for growth and development. They are bringing new range of healthy burger for
enhancing their product sale by 30% more. Market development - It is growth strategy in which business firm sell their existing
product within new market area. But market development is more risky as compare to
market penetration because of targeting new market. McDonald's is not adopting it
because of risk involved as customers of other nation have different taste and
preferences. May be their taste will not match to the offering of respective fast food
organisation.
 Diversification – In this growth strategy company come with new product within new
market. Diversification is more risky strategy because company going in market where
they don't have any experience as well as little knowledge about it. McDonald's is not

implementing diversification growth strategy because it is expensive, time consuming as
well as having high level of risk.
McDonald's is using product development strategy for their growth as well as
development. In this, they come with new range of healthy burger for increasing their product
sale by 30% more within existing market area.
M1 SMART objectives
SMART is an acronym which utilise for guiding development of measurable goals. Thus,
objective should be specific, measurable, achievable, relevant and time-oriented. SMART
objective of McDonald's: “To introduce new range of healthy burger within 8 months in order to
enhance product sale 30% more”.
D1 Analyse how the elements of Ansoff’s Growth Matrix have contributed to improvements
Ansoff matrix is utilise for growth and development of organisation as well as there are
four matrix of development. Out of these an organisation can implement anyone within their
working which will be beneficial for them (Saaty and Vargas, 2013). In relation of McDonald's,
they are using product development strategy in which company sell their new product within
existing market. Thus, respective fast food company is coming with new rand of healthy burger
for increasing product sale by 30% more.
TASK 2
2.1 Effectiveness of the business
Effectiveness of the business
In an organisation, business effectiveness refers to the quality of outputs which are traced
from tasks completed by workers and employers. In McDonald, for the effectiveness of the
business, the manger and employees both are working effectively so that the firm can attain its
goals and objectives. Effectiveness refers to the point to which aims and objectives are achieved
and the degree to which targeted issues are resolved.
Products and services- For the effective running of the business of a firm there are
various products and services manufactured by a company. So that it can efficiently operating
the business operations and activities of the organisation. In McDonald, there are different
products like hamburgers, chicken, sandwiches, French fries, soft drinks, breakfast and desserts

etc. produce by the company to fulfil the needs and demands of the clients. It help in increasing
the profit of the company which help in making effectiveness of the business.
Marketing- Marketing refer to the sales and distribution of the goods and services of the
firm. In McDonald, the management of the company use different marketing strategies like
marketing analysis, competitive analysis and others for the marketing of its products. These
strategies are beneficial fro the effectiveness of the business because with the help of them, the
management can identified the needs of the customers and analyse the competition in the market.
Sales- In McDonald, the management of the company use numerous sales strategies like
offer, discount and others so that they can increase the sales of the company. These strategies are
beneficial for the effectiveness of the company because if the sales of the company increase then
the profit and revenue also increased.
Finance- It is important factor for the effectiveness of the business of a company.
Finance department have proper informations and design strategies for maintaining the proper
information about the financial activities of the company. It is useful for running the business
activities and operations in effective manner.
Staffing- For the effectiveness of the business, management department of McDonald
providing training and development session s to its staff so that they can effectively perform their
duties and responsibilities to make improvement in the effectiveness or proper running of the
business.
2.2 Develop plans to improve the business, justify their value
It refer to a written document which containing business objectives, strategies and
methods by which goals are achieved and the time period in which these aims need to be
attained. In McDonald, business plan can be formulated by the management to make
improvement in its existing product and concerning all areas of their operations. If the
management of this company will create business plan for bringing new product i.e., health
burger then thy can consider following factors:
Planning marketing- Under this factor, the management of the company will planning or
deciding to use marketing strategies so that they can make improvement in this product. For this,
they can use market analysis to find out the needs and demands of the target audience. For the
marketing of the firm, the management will used different promotional channels like social

media, Facebook, Instagram, Twitter, Internet and others. This will help in creating awareness
about the improvement of the product which will make by the company.
Sales and productivity- Within in this, the company will plan to make improvement in
the sales of the firm by using different strategies like offer and discount pricing strategies. This
will beneficial for increase the sales of the product and productivity of the firm in favourable
manner. For increasing sales, the management can also use various promotional channels like
TV, social media, web advertisement and others.
Financial management systems- In McDonald, when the management will make plan
related to marketing, sales and productivity of the product then it will planning related to
financial management system. The management will make plan that which system of financial
management is good for managing the financial activities of current product. There are there type
of financial management systems like financial accounting, managerial accounting and corporate
finance. The manager of the company can used financial accounting in context of “ healthy
burger” product to manage the information of this product through balance sheets, income
statements, and others.
Roles and responsibilities of staff and management- After all the above activities, the
roles and responsibilities will be allocated ton the staff according to their skills and
competencies. For example, sales manager will be responsible for developing sales policies and
strategies which will be helpful for increasing the sales. Customer services representative will be
responsible for solving the quarries of the customer and providing information about the features
of the products an services of the organisation.
Planning performance monitoring- In this stage, the management of McDonald will
plan to monitor the performance of the staff that they perform their roles and responsibilities in
an effective manner or not. For this, the management will make comparison between the actual
performance and standard performance, evaluate their performance through a task and
determining the feedbacks. These all tools will help in analysing the employees performance.
These all stage of business planning will helpful and valuable for the company because
they will help in generating profit and growth for the business of McDonald. The value of each
stage will make contribution in improving the customer base.

M2 Evaluate how the effectiveness of areas of the business stipulated
All the areas of business effectiveness make their contribution in the growth of the firm
by making their participation. Products and services of the company are the major factor which
help in making effective a business. In McDonald, the growth of the business is totally based on
its different products because they fulfil consumer needs. By creating awareness about the
products and services of the company marketing activities like promotion help in increasing the
sales. Finance make contribution to manage the financial activities and having proper
information about the fund through budget, cash flow statement and others.
D2 Critically analyse how the plans developed in can lead to an improvement
Business plan can make improvement in the business of McDonald through different
kind of planning. For example, if the management of the company plan to make innovation in its
existing products according to the needs and demands of the customers it can be beneficial for
the growth of the business of the company. Marketing plan, sales & productivity, financial
management systems, roles and responsibilities of staff and others are effective stages to make
improvement in the business. But sometimes they are succeeded in it due to change in customers
needs and demands and other factors.
TASK 3
3.1 Current skills of management staff
In an organisation, there are various skills which are required to accomplish the task and
objective of an organisation. In Holiday Inn, there are different kind of skills which are necessary
fro the staff so that they can complete their work or task effectively and help in attaining the
organisational objectives. They are as following:
Technical skills- It refer to the knowledge and abilities which is required to perform a particular
task. In McDonald, it refer to the knowledge or information of information technology,
mathematical knowledge, critical thinking ability and others. These kind of skills are required fro
the management to maintain the day to day activities like billing, solving customer quarries an
others.
Operational skills- These skills refer to those abilities which are able to solve the issues of
operations and activities of the business of a firm. In McDonald, these kind of skills used by the

leaders to resolve the issues of the operations of the company. They use communication skills to
deliver the proper information to the staff so that business activities can be perform in a better
way. In this company these skills used by the management for the efficient running of the
business activities.
Managerial skills- it indicates to those skills which are highly needed of the manager for the
effective management of the organisation's activities and operations. In McDonald, it consist
planning, organising, communicating, decision making and other for the proper management of
the company.
Current skills- These are those abilities which are having by the staff of a company in present
time for making contribution in the business or development of the firm. In context of
McDonald, there are some current skills which are having by the staff of it. They are mentioned
below:
Decision making-It refer to ability of selecting between two or more courses of action. In
McDonald, it is used by the staff when the management take decision regarding a specific task,
plan or activity.
Problem solving- It is an ability of solving issues and problems regarding a particular
work or task. In McDonald, it is beneficial to resolve the conflicts and issues of employees and
customers.
Communication skill- It is the skill of sharing and transferring the views of an individual
to another. In McDonald, with the help of this skill, ideas and information can be share with the
team members regarding the organisations activities.
Teamwork skill- It is an ability of working in a group and working fro accomplishing a
shared goals through co-operation. In McDonald, the employees of the company can use this
skill to attain the objective of the firm when they are working a group regarding to achieve the
target.
3.2 Plans for the development of skills for management and staff
There are several skills required in organisation by their staff and management because
with the assistance of these company will perform their function in effective and accomplish
goals and objectives. Outline for future skills development of McDonald's staff and management
are as follows:-
Learning objective Target Development opportunities Time scale

proficiency
Risk management 10 Business environment is full of
several risk which directly or
indirectly impact on the working
of company. Thus, for avoiding
such hazards it is important to
manage risk. So for minimising
risk it is important to analyse
market and make plan related to
future risk. Although, market
analysis is the only tool through
which risk can be identified and
plans will be made according to
that.
80 to 90 days
will be needed
for developing
risk management
skills.
Planning skills 10 In organisation several activities
conduct on daily basis which
require planning so that they will
be manage in effective manner.
Thus, there is requirement of
planning skills within staff and
management. So that, all the
activities and work will be plan in
appropriate manner.
50 to 75 days
will be required
for developing
planning skills.
Situation analysis 10 Business environment is dynamic
in nature as several situations may
rise within it. So for analysing
these situation and responding
them in effective manner there is
requirement of developing
situational analysis skills within
40 to 70 days
will be required
for developing
situational
analysis skills.

staff and other management
person.
M3 Analyse the effect current experience, skills and abilities of management and staff
Staff and management of McDonald's have some present skills, abilities as well as
experience which help them in doing their day to day operations within effective manner and
result in growth of organisation. Although, all these have positive impact on the working of
McDonald's because they are able to serve their customers in proper way and result in generating
revenue.
D3 Methods that can be used to develop the skills of management and staff
There are several tools which can be use by McDonald's for developing skills of their
staff members as well as management. Explanation of these are as follows :-
 Individual training – Within this method of skill development training will be provided to
staff members and management by paying attention on individual person (Robson and et.
al., 2017). Benefit of this method is that individual will learn things in more better
manner without any problem. Whereas, this is time consuming process as training session
will be continue for some months. So that, training will be provided to every individual
management and staff.
 Workplace training – In this method, skills will be develop while working on work
stations. This is suitable method because staff members and management of McDonald's
will develop their skills by doing work practically. But it may hamper working of other
people within organisation.
CONCLUSIONS
From the above discussion it has been concluded that, it is important for an business firm
to check their business health. So they can identify present strength as well as upcoming threats
in effective manner. Although, for any type of modification it is necessary to diagnose business
in proper manner and implement change as per requirement. In addition to this business
environment is divided within two part external and internal which have wide impact on the
working of company. Thus, for analysing impact of both factor McDonald's has conducted
PESTEL, SWOT and Porter's five force model. Moreover, every business want to develop and

growth for this purpose McDonald's is using product development marketing growth strategy of
Ansoff matrix. They are coming with new range of healthy burger in market for increasing their
30% share. Apart from this, for more development company develop their business development
plan. Staff members have several skills which help them in performing their day to day
operations as well as help in management of overall association. As changes take place within
company which require enhancement within existing skills or implementing some new also. So
that, goals and objectives will be achieved in effective manner without any problem.
RECOMMENDATIONS
After going through this report, it has been recommended by me that hospitality sector is
wide as well as complex in nature and several modification take place within it. Thus, it has been
recommended by me that McDonald's have to conduct their business diagnostic on timely basis.
So that, impact of external and internal factors will be identified as well out of these
opportunities will be gained and threat can be removed. Along with this, respective fast food
company have to provided training and development session to their staff members so that, their
skills will get enhanced as well as they can perform their daily operations in better manner. As
per my opinion expertise have to be hired by McDonald's for providing training. It will not
enough for current skills only employees have to work on adopting some new also.
(Thorat and Neuman, 2012) (Tong, Song and Zhu, 2013) (Uronen and et. al., 2017) (West and
Dawson, 2012)

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