Strategic Analysis of McDonald's: Leadership and Change Management

This report provides a comprehensive analysis of McDonald's, focusing on its strategic management, leadership, and change management practices. It examines the 'Plan to Win' strategy, assessing its effectiveness and components, including place, price, people, promotion, and product. The report delves into the five managerial tasks of strategy-making and execution, the distinctions between mission and vision statements, and the hierarchy of strategies at corporate, business, functional, and strategic levels. It also discusses the roles and obligations of the Board of Directors, factors influencing rivalry, and various competitive strategies. Additionally, the report explores strategic alliances and their benefits, concluding with the importance of organizational strategies in achieving long-term objectives and setting directions and priorities across all organizational levels.

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Leadership and Change Management
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Introduction
Regardless of the products or services provided by an organization to its customers,
strategies are very essential to a firm. In regard to monitoring as well as assessing the global
marketing environment, firms are only able to develop their marketing plan by identifying the
opportunities that they can pursue including the threats to be avoided. Doing so allows
organizations to remain abreast of the current business trends along with keeping surveillance on
the competition. Any comprehensive analysis related to this will be help minimize the risk of
failure including assisting in decision-making, and international strategic planning. An effective
strategic management results in a remarkable level of customer loyalty increased profits from
organizational sales, brand positioning, and a stable market. McDonald's is among the prominent
food chains globally. The corporation’s sales along with the market share have been on the rise
regardless of some concerns that are being raised against the organization. Since 2001, the
corporation has been recording low profits. Although the company was recording an increase in
turnover, it was experiencing a continuous decrease in operating profits and profit margins. The
paper responds to questions related to strategy, including reflecting on the “plan to win” strategy
that McDonald's is employing to develop as well as sustain its competitive advantage.
Question 1
The “Plan to Win” strategy adopted by McDonald's has allowed it has increased sales and
growth beyond the industry’s average. The strategy is comprised of a matrix of place, price,
people, promotion, and product. The “Plan to Win” strategy perceives improvement in all
McDonald’s operations (Smarketing - Sales & Marketing Cocktail, 2019). The strategy’s main

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goal is to maintain the organization’s unique power, develop its market share, and add benefits
from the experience.
The test of a winning strategy can be applied in evaluating the merits of a given strategy
over another as well as gauge the strategy’s effectiveness. The tests include:
a. The goodness of fit test: An effective strategy is matched to a company’s internal and
external factors, aspirations, and capabilities.
b. The competitive advantage test: The strategy should result in a sustainable competitive
advantage (Forbes.com, 2019). A strategy that builds a bigger competitive edge proves to
be effective and powerful.
c. The performance test: The strategy should be able to boost an organization’s
performance. The two main performance improvements that indicate the effectiveness of
the strategy are gains in the company’s profitability including the long-term business
strength as well as competitive position (Global Business Consultants, 2019).
Question 2
The strategy-making, strategy-execution comprises of five managerial tasks.
a. Developing vision and mission: The first question that managers seek to address is what
the organization is trying to do and become.
b. Setting the objective: Objectives are important because they convert managerial
statements related to an organization’s mission and direction into performance targets
(Reast, Maon, Lindgreen and Vanhamme, 2013, pp.142). Setting objectives includes
establishing challenge and performance targets that need stretch and disciplined efforts.

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c. Formulating a strategy: Developing a strategy brings into effect the primary managerial
problem of how the targeted results will be achieved, in light with a company’s situation
and prospects. Objectives are the final results that are to be achieved while strategy is the
“means’ of attaining them.
d. Strategy implementation and execution: The function comprises of what is needed to
make sure that the strategy works as well as to attain the targeted performance within the
deadline (Wells, Rozenblum, Park, Dunn and Bates, 2014, pp.219). It involves
identifying what is supposed to be done to ensure the strategy is on schedule, executing it
effectively, and producing good results.
e. Evaluate performance, review new developments, and initiate corrective adjustments:
The task involves altering the long-term direction, redefining business, narrowing or
broadening the vision of the company’s future due to new circumstances.
Question 3
The mission statement is a declaration of what an organization does daily. Essentially, it
defines an organization’s daily activities of the tasks they perform, and every employee to an
organization contributes to that mission (Estanek, James and Norton, 2013, pp.6). However, a
vision statement is a clear and definitive statement that defines what a company wants to
accomplish, and how the world will change once the mission is accomplished.
The characteristics of an ideal mission statement include:
a. It should be short
b. It is unique to the business

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c. It creates expectations
d. It is realistic
e. It is memorable
f. It is active
g. It is adaptable
An example of a mission statement is that adopted by Toyota “To attract and attain
customers with high-value products and services and the most satisfying ownership experience in
America.”
Another example is Netflix’s mission statement that states “We promise our customers
stellar service, our suppliers a valuable partner, our investors the prospects of sustained
profitable growth, and our employees the allure of huge impact.”
Question 4
Hierarchy strategies define an organization’s corporate strategy, sub-strategies, layout as
well as relations (Pandey, Kim and Pandey, 2017, pp.401). The strategies are arranged logically
and hierarchically according to the mission, vision, objectives, and metrics’ levels.
a. Corporate Level: The level explains the business areas that a company operates. The
corporate level strategy is concerned with aligning resource allocation across different
business areas, either related or unrelated (Neugebauer, Figge and Hahn, 2016, pp.328).
At this level, formulating the strategy entails integrating and managing broad businesses
and ensuring there is synergy at the corporate level.

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b. Business level: The strategies are developed for specific business units and are related to
a unique product-market area (Uniselect.com, 2019). The business level entails defining a
strategic business unit’s competitive position. The formulation of this strategy level is
dependent upon the overall cost, focus, as well as differentiation’s generic strategies.
c. Functional level: The strategy is associated with different functional areas that are
contained in a strategic business unit. The units include finance, marketing, human
resources, production, and operations.
d. Strategic level: The strategy involves defining an organization’s direction and making a
decision regarding how to allocate resources aimed at pursuing organizational strategies.
Specifically, this strategic level deal with the entire business rather than isolating units.
Question 5
The four main obligations of the Board of Directors include (BOD):
a. Recruiting, compensating, compensating, supervising, evaluating, and retaining general
manager is the main obligation of the BOD (Salloum, Azoury and Azzi, 2013, pp.64).
Value-added organizational boards are entitled to identify the most qualified candidates
for the position.
b. Providing direction for the company: The BOD is obligated to provide the vision,
mission, as well as objectives for the organization.
c. Establishing a governance system that is policy-based: The board of directors is obligated
to create a governance system to be used guide the company’s strategic plan. The articles
of governance assist in providing the framework but the BOD develops the policies.

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d. The fiduciary duty of protecting organizational assets as well as the investment of the
members. As such, the Board of Directors makes sure that the organization’s assets are
maintained in good order.
Financial objective refers to the financial goals planned by an organization for the future.
Generally, it involves setting targets on how to attain profits. However, strategic objectives refer
to the long-run objectives which help develop a mission statement from the broad.
Question 6
As summarized in Factors affecting the Strength of Rivalry, the type of factors that
determine the intensity of rivalry include:
a. Multiple equal competitors: Industries that have got many competitors who operate at an
equal level in terms of providing product and service results in increased levels of
competition (MaRS Courses and Guides, 2019).
b. Slow growth: In instances where an industry has low growth rate, the available mean that
an organization can use to improve its market share is by taking away its competitor’s
market share, hence intensifying competition.
c. Higher fixed costs: In an instance that the industry faces higher fixed costs, there is
increased pressure of producing at full capacity with the intention of achieving economies
of scale (Claessens, 2019). Making sure that their stock is cleared, organizations would
have to protect their market share or even acquire more, hence intensifying competition.
d. Undifferentiated product: If an industry’s main product is generic and there no means of
basing differentiation, the goods could be treated as commodities. Hence, the value for

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money as well price will be used in basing customer choice, resulting in price-based
competition.
Question 7
A competitive strategy is a long-term plan of action that an organization develops aimed
at achieving a competitive advantage over its rivals (Baines, Brown, Benedettini and Ball, 2012,
pp.62). It does this by examining the rivals’ strengths and weaknesses and comparing them to its
own. The five competitive strategy approaches include:
a. Lo-cost provider strategy: in this approach, an organization aims at being the low-cost
producer in a particular industry. Cost advantage sources are varied and they depend on
the industry’s structure.
b. Broad differentiation strategy: An organization aims at being unique in an industry by
adopting certain dimensions that appeal to a broad customer base (Santos-Vijande,
López-Sánchez, and Trespalacios, 2012, pp.1083).
c. Best-cost provider: the organization gives the buyers increased value for their money by
adding attributes to goods at reduced costs than the competitors (Huo, Qi, Wang and
Zhao, 2014, pp.377).
d. Market niche strategy based on low costs: In this case, a firm concentrates on a narrower
buyer segment and competes against rival organizations by having lower costs (Block,
Kohn, Miller and Ullrich, 2015, pp.42).
e. Market niche strategy based on differentiation: A firm concentrates on a narrower buyer
segment and competes against rival organizations by providing customers with
customized attributes that are according to their taste and preferences.

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Question 8
A strategic alliance refers to an arrangements between firms to share resources either in
the manufacturing, development, as well as the sales of goods and services (Albers,
Wohlgezogen and Zajac, 2016, pp.584). For examples, company A and B may decide to
combine their respective resources, core competencies, along with capabilities to design,
manufacture, and distribute goods and service. The purpose of forming a strategic alliance is to
facilitate the involved organizations attain organic growth at a quicker pace compared to how
they would achieve it if they worked independently (Shi, Sun and Prescott, 2012, pp.200).
Additionally, such a partnership is able to avail knowledge and resources owned by one
organization but lacking in the other. Compared to a joint venture, strategic alliances are flexible,
thus they avoid certain hindrances (Lin and Darnall 2015, pp.563). The two companies involved
in the agreement do not have to merge their capital. Also, they can remain independent of each
other.
An alliance can only be regarded as “strategic” if it serves the purpose of creating a win-
win situation or both independent entities mutually benefit from the agreement. The two or more
organizations involved in the strategic alliance join their resources to attain mutual benefit
(Greve, Mitsuhashi and Baum, 2013, pp.85). The idea is to assist the partners to share their
knowledge, pool their resources, including increasing profits to their bottom lines.
Conclusion
Organizational strategies comprise of all the actions that are taken by companies with the
aim of achieving the long-term objectives. Combined, such actions form the organization’s
strategic plan. However, at minimum, strategic plans might take a year before they are

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completed, and they require that all the organizational levels are involved. The top management
such as the board of directors is involved in the creation of the larger organizational strategy
while the middle and the lower management embrace goals including the plans to implement the
general strategy. The strategies can either be at the corporate, business, or the functional level.
Organizational strategies are important to companies because they set directions and priorities
and align the departments as well as the teams to a common objective. Nonetheless, the
organizational strategy is also important because it clarifies and simplifies the process of making
decisions, gives the organization an opportunity to adapt in case problems arise. Through
effective strategic management, an organization is able to achieve a remarkable level of customer
loyalty, increased profits from organizational sales, brand positioning, and stable market.

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