Business Strategy Analysis: A Report on McDonald's Performance

This report provides a comprehensive analysis of McDonald's business strategy, encompassing various aspects of its operations and strategic planning. The report begins with an introduction to business strategy, emphasizing its importance in adapting to market changes. It then delves into Task 1, assessing elements crucial for strategic planning, including McDonald's mission, vision, objectives, and core competencies. The analysis extends to factors considered in formulating strategic plans, such as internal and external factors, and evaluating techniques like stakeholder mapping and the BCG matrix. Task 2 focuses on McDonald's strategic positioning through organizational and environmental audits, including a SWOT analysis. It also examines the significance of stakeholder analysis and proposes a new strategy for the company. Task 3 explores the appropriateness of alternative strategies and justifies the selected approach. Finally, Task 4 assesses the roles and responsibilities in strategic implementation, resource requirements, and the application of SMART targets. The report concludes with a summary of the findings and provides references for further study.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Assessing the elements to inform a strategic planning.........................................................1
1.2 Analysing factors to be considered while formulating strategic plans.................................2
1.3 Evaluating effectiveness of techniques to develop strategic business plans.........................4
TASK 2............................................................................................................................................5
2.1 Analysing the strategic positioning of McDonald's by its organisational audit....................5
2.2 Carrying an environmental audit for McDonald's.................................................................7
2.3 Assessing the significance of stakeholder analysis while formulating a new strategy.........8
2.4 Presenting a new strategy for McDonald's............................................................................8
TASK 3............................................................................................................................................9
3.1 Appropriateness of alternative strategies .............................................................................9
3.2 Justifying the selection of strategy......................................................................................10
TASK 4..........................................................................................................................................11
4.1 Assessing the roles and responsibilities of personnels charged with strategic
implementation of plan.............................................................................................................11
4.2 Analysing the estimated resource requirement to implement a new strategy.....................12
4.3 Evaluating the concept of SMART targets.........................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
ILLUSTRATION INDEX
Illustration 1: BCG matrix...............................................................................................................5

INTRODUCTION
Business strategy is basically referred to the strategic management to execute certain
requisite activities into the organisation. It is an overall search operation of the firm where they
are primarily recommended analysing the existent state of their business. This is mainly to bring
certain mandatory alterations into it that significantly matches the upcoming changes into their
prevalent markets (Haley, Haley and Tan, 2012). It is however important for the firms to
primarily evaluate their recently ongoing functionalities by together scrutinizing any leading
modifications into the market. Business strategies largely serves the entrepreneurs to handle the
specified arenas of their business which directly regards to the modernised aspects of
globalisation. This is assumed to be amongst one of the main reason where the firms are facing a
rigorously challenging state of their business and hence requires a firmly planned strategy to
further commence their major business activities into a rectified manner.
The present report is to demonstrate the business strategies of McDonald's, where it is
notably executing its business activities at almost every corner of the world. It thence has a
renowned recognition all over the globe as a steadily growing industry of fast food where it has
covered over 36, 525 number of locations till the year of 2015 (Markus and Loebbecke, 2013).
With a foundation of almost 76 years, it is famously known to be the fastest chain of hamburgers
and other varied products to appease the taste buds of the consumers of almost all age groups.
TASK 1
1.1 Assessing the elements to inform a strategic planning
Business missions and visions play a vital role into considering the future prospectives of
a business where it together defines the goals and objectives of the firm. However, it is yet
another crucial demand of certain aptly build core competencies that directly recommends for a
strategic planning of business activities (Zaefarian, Henneberg and Naudé, 2013). Thus,
McDonald's mission, vision, objectives and core competent fields are as discoursed below- Vision- McDonald's vision is directly referred to the modern aspect of technology where
they want to become the chief leader into their respective food industry. It is where they
are implementing a mandatory inclusion of certain advanced technical approaches to
handle their critical operations. This primarily begins with the production of their food
products and ultimately with some contemporary methods of servicing their clients and
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users. Innovation is apparently seen to be a crucial enforcement of the industry where
they are purely focussed towards inheriting certain effective measures of intervention. Mission- The prior mission of the stated entity is to become one of the favourable place
for its consumers. It is where they have basically depicted their market position and
corporate social responsibilities (Demir and Gocer, 2011). For which, they are operating
at a leading position with an optimistic formulation of serving their clients. It is where
they have already gained a reputable image of their brand where it is amongst one of the
favourite eating zone for the people of all age groups. Objectives- McDonald's works upon both short term and long term objectives of their
business activities with a prior aim towards apprehending it into the components of
SMART objectives. The applied model of SMART objectives is where the company
could successfully achieve their stated organisational goals within a stipulated time
period. However, some major objectives of the stated entity is to primarily cater an apt
quality of goods and products to their consumers within a healthy and safe environment
of provisioning it. They are together focused towards their corporate social
responsibilities with a prior objective of maintaining a desirable surrounding of
operations as per the legal adherence of environmental laws. An amiable servicing to the
consumers within a valued price of products is yet another crucial objective of the cited
firm. This is where on acquiring a desirable amount of earnings they aim to render a good
return to their shareholders.
 Core competencies- This is to refer the strengthening constituents of McDonald's, where
they can significantly beat their contenders at almost every corner of the globe into which
they are significantly operating their business (Cockayne and Mears, 2011). Thus, a
major core competency of the stated entity is their diversified possession of their business
where they have significantly applied an innovated version of their business at about each
step of enlarging it.
1.2 Analysing factors to be considered while formulating strategic plans
McDonald's is the leading fast food restaurant chain of the world it was serving more
than 60 million customer on daily basis. McDonald's formulate the many strategic plans in the
market. It was come with pre decided objective or to achieve the pre determine goals. Firstly it
was plan to serve the dishes very quickly. Mission of the company was to give quality to
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customer or satisfy need to customer or to achieve the durable profit (Althonayan and Sharif,
2010). Vision to serve the customer with good food in a friendly environment and fun
environment. There are three major components of strategic plan include formulation,
implementation and evaluation of strategy that's carry information and plan. It was focus on the
cost leadership strategy the organisation cut its cost production hence it increases their profit
margins.
Strategy Formulation
Strategy formulation starts with the current situation of the organisation. Situation
analysis is important part of the strategic plan or gives the overview of the organisation.
McDonald's formulate the strategy tools I.e. SWOT analysis, PEST analysis etc.
Strategy Implementation
The next step in strategic plan is to implement the strategy of McDonald's. There are
many strategy like McDonald's promise to customer that it was give the best quality burger. It
was focus on the price and quantity also but there was very fast competitive between subways
and KFC (Grant, 2015).
Strategy Evaluation
After the implementation of strategic plan is completed then its time to evaluate the
strategy McDonald's focus on the loyalty of the company. It was thinking that if the concept of
burger is achievable then its time evaluate the loyalty from the customer.
Factor considered by McDonald's
Internal factor
The internal factor basically it includes the strength and weakness of the company.
Strength of the company is favourable impact on business. Weakness has harmful effect on the
firm (Amit and Zott, 2012). For example that McDonald's internal factor are physical resource of
the company are location, equipment. Access to natural resources, patents, copyrights and
trademarks.
External factor
In the external factor basically it includes the opportunities and threat of the company. It
is important to recognise the potential opportunities and threats means outside company
operations. However, managing the strength of internal operations is the key to business success.
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1.3 Evaluating effectiveness of techniques to develop strategic business plans
A strategic planning of business is basically to deal with the long term objectives of a
firm where their exists some requisite propositions to be included in it. This is with certain
mandate considerations to implement certain effective models that directly refers to some
variedly available assessment tools. It is fundamentally inculcated with a primary motive of
extracting certain efficiently build action plans from it (Bones and Hammersley, 2015). This is
where the enterprises are mainly recommended comparing their ongoing practices with some
external requisitions of their prevalent markets. This is to aptly fulfil the succeeding facets of the
market which in turn reflects a satisfied response from the clients and users. McDonald's is
always at the top most position of serving its customers within an enviable manner and it thus
implements some below listed measures, specified as- Mapping of Stakeholders- Stakeholders mapping is amongst one of the most effective
way of building some strategic action plans for the business. It is where McDonald's
strongly believes to engage their respective stakeholders to participate into such decision
making process where they can together inculcate their own intervened cognition. This is
basically to proceed towards a succeeding formulation of business activities where the
leading stakeholders of the stated entity reflects their shareholders, employees,
customers, suppliers, investors and some other major participants to provide their
valuable suggestions to significantly acquire a progressive business (Cuthbertson, Furseth
and Ezell, 2015). Along with an efficient contribution of the stakeholders, this together
assists the firm to acknowledge a liable interest of their stakeholders. This is to further
accomplish a desirable format of their business in all requisite terms and with an essential
cognition of generating an enviable level of income from the profitability point of view of
the organisation.
 BCG Matrix- It is yet another crucial model used to build some effective plans with a
strategic approach of dealing the business activities. This is commendably known to
study the growth matrix of the firm with its two leading constituents. It is basically to
acknowledge the growth rate of their respective industry and relative shares of their
operational markets with four further segregated factors, as specified into the below
depicted diagram-
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◦ Star- It is where the designated firm should comply with a high growth rate and an
equivalently high market share. This position can be aptly related to McDonald's,
where their respective products are presently leading at this particular position.
◦ Cash cow- It is where the firms are momentously dealing with a high market share bit
a relatively lowered rate of growth in their respective industry (James, 2015).
◦ Question mark- It is vice versa to cash cow where there is an evidently low market
share with a high growth rate.
◦ Dog- This is the most undesirable state into which the firms inevitably faces both low
rate of growth with a lowered share into the market (Krzyżanowska and Tkaczyk,
2015).
TASK 2
2.1 Analysing the strategic positioning of McDonald's by its organisational audit
An organisational audit can be done with an internal analysis of the firm where SWOT
model is a renowned tool. Such intrinsic evaluation plays a vital role in beating the extrinsic
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Illustration 1: BCG matrix
(Source: Hammad, A., 2015)

challenging factors of the business that directly influences their major business decisions. This
together assists the enterprises to compare its ongoing functionalities with some other mandate
deliberations of the existent market (Sharma, 2015). Through which, the respective enterprises
can inculcate into their own practices to meet the changing occurrences that directly impacts
upon the existing dioceses of consumers by subsequently modifying it. SWOT analysis is parted
into two major portions to distinctly define both internal and external strategic factors of an
enterprise. It is to fundamentally assess the four major components of McDonald's. It is in terms
of acknowledging its major strengths and weaknesses as the intrinsic factors of strategic
planning. However, opportunities and threats are imposed to be the extrinsic factors, as specified
below- Strengths- The above discoursed core competencies are referred as some signifiant
strengths of the cited entity where its existent brand image has largely enhanced their
present state of profits and revenues. However, its diversified products and services with
a standardised procedure of operating into the market are an equivalently compelling
properties of McDonald's. Weaknesses- McDonald's together possess some weaken attributes as some directional
drawbacks (Zailani and et.al., 2015). It is where its certain market forces have directly
resulted into an assailable state of its western market with an entirely declined state of
procedures. However, this together comprises with some of its existent procedures and
products. It is where their devalued flexible nature with some debased diversified product
relates to some other disadvantageousness factors of the stated firm. Opportunities- Some leading opportunities for McDonald's could be some more
diversified nature of its products with an expanded business operations. This is where a
Middle East market development could evidently result into some succeeding outcomes
for the designated firm. A prior and proper utilisation of product mix could largely serve
the firm where they can together relate it to their enlarged locations of newer market
arenas to finally acquire certainly desirable results.
 Threats- A major threat to McDonald's is in relation to the competent approaches of its
rivals where a healthy lifestyle is yet another major concern of today's people. The stated
entity in such case should together implement some safer and healthier approaches of
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servicing their clients wit some more inclusions into their existing policies of
provisioning goods (Slack, 2015).
2.2 Carrying an environmental audit for McDonald's
An environmental audit is basically referred to execute an extrinsic assessment of varied
factors that directly influences their major internal evaluations in terms of impacting their
ongoing business practices. It can however be done by implementing another vital assessment
tool of PEST analysis to comprehend its four leading components of political, economical, socio-
cultural and technological facets of environment (Rothaermel, 2015). This is basically to relate it
with the expansion procedure of a firm where they are rigorously recommended to primarily
analyse the penetrating environment of the market into which they are planning to enlarge their
business operations. Below description is to mainly apprehend the four ascertained factors of
PEST analysis- Political- These are some legal interventions of the regimental bodies with their
stipulated clauses upon the working of the organisations. It mainly relates to the political
aspects of governmental parties where they frame certain mandate policies for the
operational firms into a peculiar market. It is basically in terms of structuring the tax
rates, etc. where on relating it to the recent consequences of McDonald's, there exists
certain opportunities for the cited firm with a rising trade agreements for commencing an
international business (Morecroft, 2015). An amended form of tax is also at an unsettled
state is together considered to be a benefited formulation for McDonald's, where the
developing policies of public health could be referred as a significant ultimatum for
McDonald's. Economical- These factors are in terms of the prevailing rates of interest, exchange rates
and inflation rates of a market which in turn affects the economic decisions of the stated
firm. These are with a direct link to the financial aspects of their business activities that
could either result into an unstable financial state of the organisation. It together affects
the wage level of the employees with both affirmative and pessimistic outcomes. This is
where McDonald's is presently facing a steady yet speculative economic state into its
European market with a dilatory Chinese economy. However, its dilatory yet steady
growth of US economy is considered to be an optimistic possibility for growing the
business.
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 Socio-cultural- These factors are rendering some advantageousness platform to
McDonald's, where a rising diversity of varied cultures along with a broadening gap in
affluence could largely benefit the cited entity (Keršienė and Savanevičienė, 2015).
However, an increasing health concern with a tremendous change into the trending
lifestyle is proven to be yet another risky factor for McDonald's.
 Technological- These factors directly regards the contemporary aspects of technicality
where McDonald's has possessed a leading position into their existent markets. This is
basically referred to the average research and development (R&D) activities into the
industry with an enhanced mechanism in businesses. This together relates to the
encouraged sales of products via mobile devices where McDonald's too provides such
effective practice to the consumers to online order their food.
2.3 Assessing the significance of stakeholder analysis while formulating a new strategy
A strategic alliance of business operations is mostly an obsessed part of such postulation
where the active enterprises plans to attain the long term objectives of their business functions. It
thus plays a vital role in rendering a succeeding outcome to the solicitous firms where they
strategically accomplish their stated organisational goals. It is where they are highly
recommended acquiring a dynamic nature of their business functionalities which is to crucially
serve the constantly changing needs and desires of their customers (Johnson and Turner, 2015).
This can however be done with a generous endeavour of the involved stakeholders where the
customers can aid by connoting their preferences to the firm to frame and design some relevant
products and services for them. It is with yet another subsequent approach of the employees
where they can regard some effective methods of producing the above ascertained demands of
the consumers. Similarly, the shareholders can depict some effectual ideas of launching the
product into the market with some equivalently profound methods of broadcasting its existence
to the users. This is basically to get an enviable response from the clients that in turn enhance the
sales and revenues of the stated entity and serves the investors and other related parties.
2.4 Presenting a new strategy for McDonald's
McDonald's has immense brand image in their fast food operations and currently cited
organisation is dominating the sector by giving customers the best quality of the products at an
affordable price. Thus, in order to expand their market share, top management of cited firm is
planning to tap the Asian as well as middle east market because these regions have not been
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served much as compared to other market (Thomson, 2016). Therefore, firm is planning to open
more of their retail operations so that their profits gets enhanced and they seek to develop more
of their brand image in the eyes of customers.
Moreover, mentioned firm will also focus on introduction of some new products which
will satisfy the needs and demands of the customers in effective manner. Mentioned company
will seek to introduce English Brekkie Wrap and Spinach and Feta Brekkie Wrap. These two
products are most consumed projects in UK and now firm is planning to promote these products
in newly developed market. Firm is anticipating that the audience of middle east and Asian
market will give best of the response and firm will be able to gain more of the profits, revenue
and turnover.
Therefore, it states that mentioned company is focusing on market development strategy
where they will serve their existing product to a brand new market. The positive response from
the customers will increase their production from the initial start of the operations only and with
this, McDonald's will get competitive advantage over the rival competitors who are working in
the same industry (Kolowich, 2015). However, at the time of expansion, firm has to take care of
all the rules and regulations prevailing in the country and should abide the same in order to have
effective operations. Further, cited firm also has sound financial structure but Research and
Development (R&D) department should not take any wrong step because it will suddenly decline
their profit. Moreover, violating any of the rules and regulations will also result into hampering
of their goodwill and with their competitors will get a chance to be one step ahead in the
competitive market.
TASK 3
3.1 Appropriateness of alternative strategies
Generally a business venture take the help of these types of strategies for different
scenarios which can arise in the future. Further, these strategies, helps McDonald's to increase
their market share, brand image, profits, revenue, etc. Alternative strategies which is available
for cited venture are market entry strategy, substantive growth strategy and limited growth
strategy and retrenchment. The description of all these strategies has been given down under: Market entry strategy: Market entry strategy can be defined as planned method of
delivering right quality of goods and services to a new target market. With this, firm is
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