Strategic Intelligence Report: McDonald's Case Study - MGT805

This report delves into the strategic challenges faced by McDonald's, particularly the 2014 food scandal involving expired meat usage in Shanghai. It explores how senior management could address the issue through effective communication, quality management, and analytical tools like SWOT and gap analysis. The report highlights the role of a strategist in implementing marketing strategies, ensuring quality control, and establishing a robust communication plan to regain customer trust. Recommendations are provided to address and remove the issue, focusing on identifying the problem, understanding its reasons, and implementing corrective actions. The success of proposed solutions and the importance of resource management are also discussed, emphasizing the need for McDonald's to uphold high ethical standards and conduct independent audits to restore its brand image and customer confidence. This document is available on Desklib, a platform offering a wealth of study resources, including past papers and solved assignments, to support students in their academic endeavors.

Running Head: McDonald’s 0
McDonald’s
Strategic intelligence

McDonald’s 1
Executive summary
McDonald’s is a biggest and well-known fast food chain in the world. It uses various
marketing tools in the company to provide the best services to its customers. Everything was
growing well but suddenly in the year 2014, it faced the issue of bad food image. Shanghai,
news reported made the video clip in which it was seen that employees of the organization
are using expired meat. Due to this, it has faced lot of problems regarding the decrease in
demand of customers, losing the trust of public. After this issue, it stopped taking the supply
of meat from the supplier who delivered the expired meat. Therefore, it is the role of
strategist to take those action which help in addressing the issue properly. The first solution is
implementation of effective communication plan. Communication is an essential tool to solve
the situation. Quality management is also one such thing that is important in food industry.
Strategist can undertake the checking of quality before moving it to the final consumer. In
addition, there are analytical tool to address the issue. Primarily, SWOT analysis is a tool that
helps the company in identifying the opportunities and threat that are lying. According to this,
it can take the actions to overcome from the threats. Gap analysis also assists the company in
identifying the gap in performance and helps in fulfilling those.

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Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
Findings......................................................................................................................................4
Strategic issue faced by McDonald’s.........................................................................................4
How senior management could address the issue......................................................................4
Analytical tool to address the issue............................................................................................5
Strategist role in addressing the issue........................................................................................5
Marketing strategies...............................................................................................................5
Quality management...............................................................................................................6
Implementing communication plan........................................................................................6
Recommendation to address or remove the issue......................................................................6
Success of proposed solution.....................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................9
Appendices...............................................................................................................................11

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Introduction
McDonald’s is a fast food company of America, founded in 1940. It is one of the
largest fast food chains of the world. McDonald’s headquarter is in Illinois. In 1948, its first
fast food chain started by two brothers named Richard and Maurice in California. In early
2018, McDonald’s headquarter has moved to Chicago. It is number one fast food channel in
terms of revenue. It is best known for its breakfast items, milk shakes, soft drinks, wraps,
chicken products, and desserts. It is currently serving over 69 million customers across the
globe (McDonald’s, 2018). It has added some extra things in its menu that are fish, salads,
fruits, and smoothies. It was working well in various countries of the world. However, in the
year 2014 it has faced a strategic issue related to bad food image. Due to this food scandal,
the demand of its product has increased in Asia. In this, a news reporter has captured the
video clip by saying workers are using expired meat (Jourdan, 2014) Therefore, it is essential
for McDonald’s to get back the trust of customers by taking various initiatives. In the first
part of the report, strategic issue faced by McDonald’s and strategies that senior management
could take to address the issue has been discussed.

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Findings
Strategic issue faced by McDonald’s
In 2014, McDonald’s has faced the strategic challenges due to its bad food image in
China. A reporter in Shanghai has secretly taken the footage of using contaminated meat in
its processing of food. In addition to this, it has also captured the video of its workers using
expired products of meat. Video related to the bad food image got viral in the whole country.
When the video went viral, it forced the “Shanghai Municipal Food” to probe the processing
unit. After the investigation on expired meat, it was founded that those expired meat
products were repackages and processed with the new dates of expiry. Before this, it was
noted that around 3000 packages of those were already sold.
“Shanghai Husi Food” was supplying food to the various fast food chains such as
Starbucks, Burger King, McDonald’s in various cities of China (CNBC, 2014). Due to this
issue, it has faced many problems. The major problem was in the decline of its sales
especially in cities of China. This has shooked the company in negative way. The various
customers had lost the trust in its food image. After this scandal, the news spreads on the
social media by decreasing the confidence and trust of people toward the brand.
How senior management could address the issue
When McDonald has faced several issues due to its food scandal, senior management
of McDonald has taken several steps to overcome from the issue. The first and major step
taken by the McDonald’s management is to stop taking chicken from the Shanghai supplier.
It has stated that safety of food is the major aspect of McDonald’s and does not want to
decrease its customer base. In a report, it has stated that it has suspended sourcing from that
supplier. Besides this, it can also take a personal meeting with that supplier to know its false
quality measures. It can also take action against that supplier so that its bad marketing comes
in front of the public (USA today, 2014).
Senior management can also take resource management and quality management to
address the issue of bad quality of food (Sutton, 2015). If it was taken the quality measures
before using its measures, the issue did not arise. It could also use the resource management

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approach. It is an effective and efficient development of resources of organization when there
is a need. It also includes the inventory of various products in the environment. It also
stopped taking supplies of other product from Husi, shanghai supplier (The Guardian,
2018).These products include lemon slices, onion, cucumber, lettuce, green salads. It was the
best step taken by McDonald’s so that people can start purchasing again the products.
After the Food scandal, it started buying chicken from Thailand by taking the
concerns of its customers in mind. It is not necessary that all people come to know about the
changing supplier of McDonald’s after this bad chicken image. Rather than, it could upload
the proof of its supplier on the official page of its website. By doing this, it come to know the
perception of various people for its changing supplier. It could also prove that it is committed
to the high ethical standard by conducting the independent audits (Davis, Lockwood, Alcott
& Pantelidis, 2018).
Analytical tool to address the issue
It is essential for the companies to analyse the issue as soon as possible. This will help
the company in addressing the issue faster. Therefore, organizations should use such tools
that can analysis the internal as well as external environment. Therefore, SWOT analysis is a
best way to deal with issue. By knowing the strengths of the company, it can take further
steps to grab the market. Besides this, it also assists in knowing the opportunities that are
lying. It clearly shows the weaknesses on which organizations can work better. McDonald’s
can address the issue by working on its weaknesses before it become a major problem for it
(Lannon, 2016). By knowing its weaknesses and strengths, McDonald’s can take the
measures for identifying the opportunities that available for the company. In addition,
through SWOT analysis, it will also come to know about the threats that will come on the
way by addressing the issue.
Gap analysis is also one such tool for addressing the issue. By using this analytical
tool, organization can follow a series of steps to address the issue. This analysis will start
with knowing the current state or problem properly. After knowing the current problem
properly, it can set the target according to the situation (Warsinske, 2016). It is better to
divide the targets in small portion so that it becomes achievable in effective manner. After
setting the objective, gap analysis third step is to know the differences in desired target and
the target it want to achieve by solving the issue. After knowing the target, it is necessary to

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achieve the propose the options for the solutions. There are various options available but it is
feasible to choose the best option so that issue can be solve from the roots. Zonetimes, it also
happen that actual problem is not solved by following the steps of gap analysis (Fichman &
Kemerer, 2015). Therefore, this process needs to be repeated until the problem is not solved.
McDonald’s can use both these analytical tool to solve the issue that is putting the company
in danger.
Strategist role in addressing the issue
In order to address the marketing issue faced by McDonald’s, strategist can take several
measures to reduce the effects of those issues and bring back to its position. Therefore, the
certain steps that strategist can take is described below-
Marketing strategies-, It can take such measures that bring its position and positive image
to the customers (Rowley, 2016). For this, it can start marketing campaigns in which
customers come to know about its changes that it has made to overcome the issue. It can also
present the changes that it has taken to reduce the negative feedback from customers (Ryan,
2016).
In addition, it can also upload a short clip on its website about the processing of its product.
This will achieve the trust of customers back and can improve its market base. The various
marketing strategies mainly advertisement will reveal the company social responsibility while
making the product (Papargyropoulou et al, 2014).
Quality management- It is a way of seeing all the activities in an efficient manner so that
desired level of excellence can be maintained. Analyst can adopt the quality policy and
implement the quality planning. It will assure the best quality of products and improve the
quality of its bad food. It is a tool of achieving the long-term success in the business. To
implement this, it is required to include all the stakeholders to improve the services, products,
processes, as well as culture of company. All the functions that are involved in quality policy
will assure the quality and make the customers happy. McDonald’s can show the proof of its
quality policy that has modified. It will assist the company in reducing the negative feedback
that has heard for the bad quality of food (Paiva, 2013).

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Implementing communication plan
Effective communication is essential for the companies to make thing right. Strategist
or analyst should effectively communicate the reasons of its bad quality of food that the
customer has faced. In should include the government as well as customers in this
communication plan so that issues can be addressed in a proper way. In this communication
plan, it can follow certain steps so to reach the final positive outcome. The purpose of this
communication plan will be communicating its safe food policy. The target audience in this
plan will be customers, employees, government, as well as food authority (Jones, 2017). On
the role of strategist, it is recommended to use different channel of communication. In order
to communicate with customers, social media will prove to be best way. It is essential to
communicate the exact reasons behind the bad quality of food, so that problem can be solved.
Besides this, it is also necessary to communicate the issue of bad food image to the
government (Quirke, 2017). If communication will be not done appropriately, then it will
lead to certain action on the company. In this way, strategist or analyst to could take proper
communication with the food corporation as well.
Recommendation to address or remove the issue
Firstly, it is necessary to address the issue properly so that proper actions can be taken
for removing the issue. It is necessary to follow a series of step to address the exact issue. It
starts with identifying the issue. It is done by knowing the different views of people regarding
the problem. After the identification of issue, next step is to properly address the issue is
reasons behind the issue. It is not always necessary that there is only one reason behind the
issue. Sometimes, technology as well as people can be issue. In some cases, there may be one
issue. After analysing the reasons behind the issue, it is necessary to identify the various
solutions for the issue. There are various alternatives available to address the issue, therefore
best and feasible action is required to taken.
The above mentioned steps will help in addressing the issue. After the proper
addressing of issue, it is also essential to take the necessary actions for removing the issue. In
fast food industries, quality of food is the most important thing. It cannot compromise with
the quality of food as there are so many laws that govern the food industries. McDonald’s has
come under top most food industry. After the case of bad food image, it has faced so many
bad reviews and decline in its customer base. In order to effectively remove the issue and get
back its previous image in the market, it is recommended to see the possible negative

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outcomes of its bad quality of food. It should take the necessary and strict action toward its
supplier who has supplied the poor quality chicken in its store. It should communicate in such
a way so that supplier can accept its mistake to supply the bad quality of chicken
(Kafetzopoulos & Gotzamani, 2014). This will help the company in getting proof regarding
its supplier. After showing the proof, it can make believe to the customers. Besides this, it
should also instruct its employees regarding making the product. It should instruct the
employees to check the quality of raw material and vegetables that will be used in making the
product.
Resource management is also one such action that McDonald’s to remove the issue. It
is efficient and effective development of organization when they are in need. It can take this
approach in mind to remove the issue. From now onwards, it can manage the resources
before processing them to the final consumer. In order to remove the issue until the survival
of its company, Quantity control team is fruitful. The hiring of this team will assist the
company in checking quality of its food before providing services to final consumer.
Success of proposed solution
The proposed solutions will be quite helping in the organization to solve the issues
that it is facing. Proper communication will help the company to maintain the correct flow of
information. An effective communication is a backbone of every organization. Therefore, it
will assist the company to solve the issue accurately. Besides this, communication with
customers as well as suppliers is necessary. Communication with customers will be related to
the reasons for its issue and steps that it will take for solve it. In addition, the proposed
solution also includes quality management. Therefore, inclusion of quality in the core activity
of organization will prove to be fruitful. In future also, it will bring the success in the
organization.
In addition to both, the suggested analytical tools are also suggested to address the
issue. This tool will definitely corporate with the organization issue. The first tool suggested
is SWOT analysis and the other one is gap analysis. SWOT analysis will bring success in the
organization because it identifies the opportunities in advance on which it can take steps to
convert the opportunity into success. Besides this, it will also help the company in identifying
the threats on which action is necessary to take. As McDonald’s is facing the issue of bad
quality of food, gap analysis will solve the situation. Gap analyses in the company will

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analysis the gap that is emerging in the company. After analysing the gap, I will be able to fill
those gaps by taking suitable action.
Conclusion
From the above paper, it can be concluded that McDonald’s is growing well in
different countries of the world. In the year 2014, it has faced the strategic issue related to the
expired chicken being used in the product. In order to overcome the issue of bad food image,
various strategies can prove to be fruitful in overcoming from the issue. Implementing an
effective communication plan can help the company to communicate in a better way its
supplier, customers as well as employees regarding the issue. In this way, effective
communication is necessary time-to-time to build a strong team so that it can able to matchup
effectively with the customers’ expectations.
In addition, quality management is also an effective tool that can be taken by senior
management to address the issue. After communicating effectively, senior management can
take the quality management initiative to check the quality of product before moving to the
final consumers. Quality management is essential for the food companies as consumers are
too much concerned about the food quality before purchasing it. Therefore, quality
management tool will help the company to provide the best quality food to its customers
before providing the service to the final consumer; Quality management will also assist the
company in future, as quality is the major aspect of food industry.

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References
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big-burger-not-lovin-it.344723/
CNBC. (2014). McDonald's campaigns against its junk food image. Retrieved from:
https://www.cnbc.com/2014/08/18/mcdonalds-campaigns-against-its-junk-food-
image.html
Davis, B., Lockwood, A., Alcott, P., & Pantelidis, I. S. (2018). Food and beverage
management. United Kingdom: Routledge.
Fichman, R. G., & Kemerer, C. F. (2015). The illusory diffusion of innovation: An
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Jones, P. (2017). Communicating strategy. Gower.
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scandal brews. Retrieved from:
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techniques-to-apply-to-strategic-analysis-and-planning.html
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https://pdfs.semanticscholar.org/9c69/bd2376327e376b33a96854adc2445e34033f.pdf

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