MAN707 - Strategy, Changes, and Leadership: McDonald's and Spoonbill

This case study provides a comparative analysis of McDonald's and Spoonbill, examining their strategic development, internal and external factors, and competitive environment. McDonald's, an established firm employing a cost leadership strategy, is contrasted with Spoonbill, a recently established business focused on differentiation. The analysis includes SWOT assessments for both companies, Porter's Five Forces analysis, and PESTLE analysis to evaluate the external environment. The study concludes with a summary of the strategic approaches undertaken by each company, highlighting the challenges and opportunities they face in the competitive landscape.

STRATEGY, CHANGES AND LEADERSHIP

Running Head: Strategy, Changes and Leadership 1
Table of content
Introduction 2
Current strategy along with internal and external analysis 2
Conclusion 5
Bibliography 6

Running Head: Strategy, Changes and Leadership 2
Introduction
The current assessment is being conducted to analyse the two case studies of McDonald's and
Spoonbill. The assessment tries to take into consideration the strategic development of
organisations operating in the same industry, where one is recently established while the other
is an established traditional firm. Discussions on current strategy, internal factors, external
factors as well as the competitive environment will be made.
Current strategy along with internal and external analysis
The generic strategy of McDonald's is cost leadership which mainly involves minimising the cost
of the offering products, at cheap prices (Sachdeva, 2016). The company also makes use of
supporting generic strategy, that is in broad definition involves the development of the business
as well as the products in order to make the brand distinct from the competitors (Camilleri,
2018). The primary generic strategy of Spoonbill is differentiation and cost focus is the second
generic strategy.
McDonald's
Strength
● Quality of products and services.
● The international presence of the brand.
● Strong brand recognition.
● Constant innovation in the product range
Weakness
● The prices of the products and services are hired as compared to Rivals.
● The Fast Food Industry is hampered by the image of being unhealthy consumables.
● High employee turnover rate.
Opportunities
● Ability to introduce a new product for influencing the local taste.
● Modifying the pricing strategy to make it comparable to the local as well as
● International chains operating in Australia.
Threats
● Entry of international Rival brands such as subway, KFC is a major threat to McDonald's.
● The changing legislation and government regulations.
● Increasing raw material cost.
Spoonbill
Strength
● A positive image of the brand.

Running Head: Strategy, Changes and Leadership 3
● The menu consists of healthy food items.
● An innovative decoration of the restaurant.
Weakness
● Costly
● Critical reviews from food critics.
● Service level is not up to the mark.
Opportunities
● Ability to exploit the local as well as the intercultural differences in creating the menu.
● Specifying customer service.
● Increasing brand presence.
Threats
● The increasing role as well as the influence of the healthy food groups.
● Changing regulations and rules in the context of the catering industry.
● Increase in prices of raw materials
Porters 5 forces of McDonald's and Spoonbill suggests that for McDonald's the easy availability
of substitute complemented with low switching costs and high performance to cost ratio in terms
of a substitute makes the threat of substitute products a higher concern. Whereas, in Spoonbill
the profitability is bound to suffer when a new service order product is launched that meets the
customer needs in a different manner and hence the threat of substitute products as well as
services is a strong force (Kaur & France, 2018).
In terns od threat from rivals, for McDonald there are a high number of firms operating in the
same industry and having a highly aggressive business strategy complemented by Low
switching costs makes the threat from competitors and Rivals a strong force (Aithal, 2017). On
the other hand for Spoonbill, Increase in competition with Rivals will lead to decrease in overall
profit due to the flashing of prices and hence threat from Rivals is a strong force.
The low stitching cost complemented with a high variable capital cost as well as costly
investment for brand development makes the threat of new entrants a moderate force for
McDonald. Whereas, the new entrants in the market bring about innovation which can
pressurise Spoonbill to lower the prices as well as introduce new value propositions which
makes the threat of new entrants a moderate force.
A large number of suppliers complemented by a low forward vertical integration and high overall
supply makes the bargaining power of suppliers a weak force in terms of McDonald. The
suppliers who are in a dominant position may be responsible for decreasing the margin of profit
for the company and this means that the bargaining power of suppliers in case of Spoonbill is a

Running Head: Strategy, Changes and Leadership 4
strong force.
Since the consumers enjoy a low switching cost and or ready to be serviced by a large number
of service providers providing a high frequency of substitute makes the bargaining power of the
consumer a strong force for McDonald’s. in terms of Spoonbill the consumers preferred to
purchase the best offerings that are available by paying the minimum price make the bargaining
power of consumer a strong force (Hashem, 2017).
External environment of McDonald and spoonbill can be identified with pestle analysis. For
McDonald’s the increasing frequency of International Trade agreements can be considered as
an opportunity. The government regulations pertaining to diet as well as health can be
perceived as both a threat as well as an opportunity under political factors. Under the Economic
factors the slow yet stable growth of the developed countries can be considered as an
opportunity. The slowing down of the Chinese economy can be considered as a threat and the
Rapid growth of the developing countries may be considered as an opportunity. Social factors
for McDonald’s suggest that More and more people enjoy a rising disposable income which
can be perceived as an opportunity. The busy Lifestyle in urban areas, as well as increasing
cultural diversity and Lifestyle friends, can be considered as both threats and opportunities for
McDonald's. The technological factors for McDonald’s mention that, the moderate research and
development activity in the industry is an opportunity for McDonald's. Business automation is
also another opportunity for the company. Conducting sales by using mobile devices has also
become an opportunity for McDonald's. Environmental factors for McDonald’s have shown
that there is a rising interest to take part in the corporate environmental program which should
be considered as an opportunity to buy McDonald's. The increasing emphasis on adopting
sustainable business strategy is also an opportunity. The changing climatic conditions in areas
of operations can be and should be considered as a threat. For the McDonald’s the legal factor
brings information related to the increasing number of health regulations at the workplace as it
should be considered as a threat (Anaf, Baum, Fisher, Harris & Friel, 2017). Legislations
pertaining to animal welfare can be considered a threat as well as opportunity. Legislations
regarding the increase of the legal minimum wages are also a risk for the company.
For the Spoonbill under Political factors Tax reforms, as well as health regulations, are the direct
impact of the political factors. In order to keep up with the changing political scenarios, it is
necessary to keep the business up to date to receive the highest possible ratings.
The healths of the country’s economy, as well as the requirement of minimum legal wage, are
the two major economic factors to be considered for Spoonbill under economical factors.
Increasing awareness pertaining to healthy and organic food is the impact of the social as well

Running Head: Strategy, Changes and Leadership 5
as cultural factors which needs to be taken into consideration before deciding on a menu. Under
technological aspects Spoonbill makes use of the old as well as new technologies in order to
provide the consumers with a satisfactory service (Li & Luo, 2018). The sudden inflow of
competitive brands and food chains seem to be having a negative impact on the productivity of
Spoonbill. It is necessary to keep in mind the local legislation such as zoning permits and
changes in food and beverage licensing that may affect the day to day activities of Spoonbill
(Sung, Phau, Cheah & Teah, 2018).
Conclusion
In the current assessment, a very brief analysis of the strategic development undertaken by
McDonald's as well as Spoonbill has been conducted. McDonald's is an established traditional
firm while Spoonbill is recently established and emerging. In order to conduct the analysis
aspects of current strategy, internal and external factors along with an analysis of the
competitive environment have been undertaken.

Running Head: Strategy, Changes and Leadership 6
Bibliography
Aithal, P.S., (2017). A critical study on Various Frameworks used to analyse International
Business and its Environment. International Journal of Applied Engineering and
Management Letters (IJAEML), 1(2), pp.78-97.
Anaf, J., Baum, F. E., Fisher, M., Harris, E., & Friel, S. (2017). Assessing the health impact of
transnational corporations: a case study on McDonald’s Australia. Globalization and
health, 13(1), 7.
Camilleri, M. A. (2018). The marketing environment. In Travel Marketing, Tourism Economics
and the Airline Product (pp. 51-68). Springer, Cham.
Hashem, A. A. (2017, April). the effect of decision-maker characteristics on the selection and
utilization of strategic decision-making tools. In International Conference on Business
(CUCBS) Roadmaps for Sustainable Business (Vol. 23, p. 24).
Kaur, H., & France, A. (2018). Gaining a competitive advantage in the fast food industry.
Li, X., & Luo, C. (2018). Developing competitive advantage for a restaurant.
Sachdeva, A. (2016). Evaluation and selection of differentiation as a strategy for McDonald’s.
GRIN Verlag.
Sung, B., Phau, I., Cheah, I., & Teah, K. (2018). Critical success factors of public health
sponsorship in Australia. Health promotion international.