Business Strategy Report: Strategic Analysis of McDonald's and M&S

This report provides a comprehensive analysis of business strategy, focusing on McDonald's and Marks & Spencer (M&S). It begins with an introduction to strategic planning, emphasizing the importance of mission, vision, objectives, and core competencies. The report then delves into factors crucial for developing strategic plans, including employee engagement and innovation, followed by an overview of effective techniques like PESTEL, stakeholder, and competitor analyses. A significant portion of the report is dedicated to McDonald's, analyzing its strategic positioning, environmental audit using PESTEL, and the significance of stakeholder analysis. It proposes a new strategy for McDonald's, focusing on sustainability and employee retention. The report further examines alternative market entry strategies for M&S, justifying the chosen strategy. Finally, it discusses the roles and responsibilities in strategy implementation, required resources, and the contribution of SMART targets. The report concludes with a summary of key findings and recommendations.

Business Strategy
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TABLE OF CONTENTS
Introduction .....................................................................................................................................3
Task 1...............................................................................................................................................3
1.1 Assessment how mission, vision, objectives and core competencies inform the process of
strategic planing ..........................................................................................................................3
1.2 Factors to be considered at the time of developing strategic plans .......................................3
1.3 Effective techniques which are used at the time of developing strategic plans for business 4
Task 2 ..............................................................................................................................................5
2.1 Strategic positioning of McDonald's......................................................................................5
2.2 Environmental audit of McDonald's .....................................................................................6
2.3 Significance of stakeholder analysis at the time formulating new strategy ..........................7
2.4 New strategy of McDonald's .................................................................................................7
Task 3...............................................................................................................................................8
3.1 analysis of appropriateness of alternative market entry strategies.........................................8
3.2 Justification of strategy selected for M&S ............................................................................8
Task 4 .............................................................................................................................................9
4.1 Roles and responsibilities of person which are charged with strategy implementation .......9
4.2 Resources required to implement new strategy ....................................................................9
4.3 Contribution of SMART targets in strategy implementation .............................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
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INTRODUCTION
In present scenario, business strategy plays very important role in growth and success of
any organization. Further it can be defined as an action plan to achieve goals and objectives of an
business enterprise. This report explains how mission, vision objectives and core competencies
are important in the process of strategic planning. In addition to this, it also demonstrate some
factors which are required to be considered at the time of formulating strategic plans. Other than
this, the report reflects an analysis of McDonald's strategic positioning and environment audit of
the same.
TASK 1
1.1 Assessment how mission, vision, objectives and core competencies inform the process of
strategic planing
Strategic planning can be defined as the process in which organizations formulate their
strategies and make decision regarding how it is going to allocate resources. All these strategies
and decisions are made with an aim to achieve mission, vision and objectives of a business
enterprise (Teece, 2010). Further it can be also stated that strategic planning cannot be done
without mission, vision and objectives as these all things explains what business wants to
achieve. Different organization operates with different kind of mission, vision and objectives.
For example the objective of a business enterprise can be achieving 10% growth in next one
year. Its mission can be to attain high degree of customer satisfaction and vision can be to
become the leading brand in market. All these things are kept in mind at the time of strategic
planning and if these things are nor present then the plans are considered as senseless or of no
use. On the other side of this , core competencies are also essential as they determine how the
resources will be allocated (Olson, Slater and Hult, 2005). Further it can be defined as the
resources and skills which makes a firm differ from another. Therefore, effective plans and
decision can be made only after assessment of an organizations core competencies.
1.2 Factors to be considered at the time of developing strategic plans
Some of the important factors which are required to be considered at the time of
developing strategic plans are below mentioned as:
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 Employee engagement- At the time of strategic planning, organizations are required to
take care of the fact that all its employees are engaged in the process (Peng, Wang and
Jiang, 2008). It can be also stated that participation of workers from all level help in
developing most effective plans. Innovations- Innovation are considered as key to become successful in the stage of
intense competition. Organization are required to posses that courage to try something
different and risky.
 Combinations of resources and opportunities- At the time of developing strategy,
businesses are also required to combine all its available resources with opportunities
( Baye and Beil, 2006). Successful strategic plan are the one which takes good use of
firm resources and opportunities.
1.3 Effective techniques which are used at the time of developing strategic plans for business
Effective techniques which can be used to develop strategic plans are discussed below as: PESTEL analysis- As per this technique, business can develop strategic plans by
identifying can environmental trends which can have impact on activities of business.
The political, economic, social, technological, environmental and legal factors have
various kind of impacts on business strategies (Augier and Teece, 2009). Stakeholder analysis- The technique of stakeholders analysis can be also used in which
strategies can be developed on the basis of interest of internal and external stakeholders.
By conducting surveys with the help of questionnaire, analysis of stakeholders
requirements can be carried out and on the basis of analysis strategic plans can be
formulated.
 Competitor analysis- The technique of competitor analysis can be also used at the time of
developing effective strategic plans (Zack, 2009). In this technique, business enterprise
will be required to identify its major competitors and then it will need to become aware
about their products, services and strategies. On the basis of above mentioned assessment
strategic plans can be made.
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TASK 2
2.1 Strategic positioning of McDonald's
Strategic positioning is defined as the way in which a business enterprise competes and
serve customers in marketplace. In simpler terms it can be defined as the process of attracting
customers, making them satisfied and retaining them. Organization can position them
strategically by doing two things which are either by doing same thing in different ways or by
offering different kinds of products and services as compared to other market players (Ashton
and Morton, 2005). The competition among burger companies has become so intense that it is
not easy for business to achieve higher sales and profitability. McDonald's faces tough
competition from Burger king and Wendy's. In terms of strategic position, Burger King has
targeted young adult males whereas Wendy's has positioning is to satisfy people which are health
conscious. On the other hand, after carrying out organization audit of McDonald's, it can be
stated that the brand has developed itself as low cost family restaurant. The increasing level of
competition has made McDonald's strategic positioning to focus more on delivering burgers and
other products to at low prices. Further with the help of cutting down its delivery time and
lowering down its overall cost of operations, it has been able to serve products and services at
low cost (Montgomery, 2011). Along with this, the use of technology has played very important
role in cutting down the cost. Therefore, after carrying out the organization audit, it can be stated
that McDonald's strategic positioning is to deliver same products and services in different way
which is at low cost.
Organizational audit
Strengths
 One of the most successful chain of fast
food restaurant
 Strong customers base
Weakness
 Declining market share
 High degree of waste
Opportunities
 Intentional expansion
 Formation of joint ventures with
supermarkets
Threats
 Intense competition
 Changing trend of healthy lifestyle
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2.2 Environmental audit of McDonald's
The environment audit of McDonald's has been done with the help of model which is
PESTEL analysis. The audit in mentioned below as:
PESTEL analysis Political factors- McDonald's have an direct impact on any kind of change in political
environment of a country in which it operates. In government of UK has developed
policy regarding health and hygienic which has affected the operations of the brand to a
great extent. McDonald's is required to change its food practices and operations as per
polices which is costly and time consuming. Economic factors- Any kind of instability in the nation where McDonald's operates have
direct impact on the sales and profitability of the brand (Steurer and et. al., 2005). Further
the changes in exchange rats, tax rates and rate of unemployment have an affect on profit
margin of the restaurant chain. Social factors- The changing taste and preferences of people in market has emerged as
one of the biggest threat for McDonald's. Nowadays the need of more healthy and
nutritious food products among people is growing at very good pace (McDonald, 2015).
McDonald's is affected by the taste and preferences because it operates in more than 120
countries. Thus, it can be stated that people of different nations have different taste. This
is also affecting McDonald's operations and sales. Technological factors- It can be stated that technological changes do not have much
impact on the brand (Bryson and Lombardi, 2009). However, the of technology has
helped McDonald's to lower down the entire cost of operations and in making the overall
performance of the brand much more effective. Environment factors- In modern era, many businesses have being forced to improve their
operations and lower down their negative impact on environment. McDonald's has
affected by such kind of practices as it has been always criticized for its waste
production. More than 45 million customer buy food from the brand on daily basis and
this clearly explains how much amount of waste is generated during packing and
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production of food (Chesbrough and Appleyard, 2007). This has also crated sense of
dissatisfaction among customers and to a certain extent it has lower down the sales.
 Legal factors- At the time of operating in several countries of the world, McDonald's is
required to strictly follow their employment and labor related law. This has made the
overall management complicated of the brand.
2.3 Significance of stakeholder analysis at the time formulating new strategy
Stakeholder can be defined as those individual's or parties which have direct or indirect
impact of the operations and activities of a business. Further every organization have different
type of external and internal stakeholders. At the time of formulating any kind of business
strategy, businesses are required to carry out stakeholder analysis (Håkansson and Snehota,
2006). The process of analysis consist of three major steps which are identification of key
stakeholders, prioritizing them and understand their need and demand. It can be stated that at
internal stakeholder such as managers, employees and external stakeholder such suppliers and
customers play very important role in the success of any business enterprise. Therefore,
stakeholder analysis before developing any kind of strategy will help organization to develop
sense of satisfaction among all of them. It is also consider as significant because if the
stakeholders are satisfied and happy then businesses do not have any kind of difficulty in
achieving its aim and objectives (Olson, Slater and Hult, 2005). The analysis also helps in
determining the need and demand of each and every stakeholders. Business strategies based on
stakeholder analysis are considered as more effective and efficient.
2.4 New strategy of McDonald's
The new strategy for McDonald's will focus on lowering down two major element which
are its negative impact on environment and employee turnover rate. According to the new
business strategy more sustainable practices in overall operations will be used by the brand. The
brand will also lower down the use of polyester in its packing material and instead of this, bags
of cotton will be used (Baye and Beil, 2006). The customer wont be required to throw those bags
and they will be able to reuse the same. Along with this, the new strategy will also increase the
involvement of suppliers in the decision making process. The supplier will be encouraged to give
tier views and opinions regarding how waste production can be lower down. In addition to this,
the new strategy will be also help in lowering down employee turnover. Further techniques of
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performance measurement will be implemented and rewards will be also provided to employees.
McDonald's will also carry out employee survey at regular intervals in order to understand the
need and demand of employee and satisfy them.
TASK 3
3.1 analysis of appropriateness of alternative market entry strategies
Marks & Spencer (M&S) can use three major strategies which are limited growth,
substantive growth and retrenchment strategy. All these three strategies and their appropriateness
in context of M&S is mentioned below as:
 Limited growth- M&S can us the strategy for limited growth a this strategy aims at
bringing maximum amount of growth by taking very less amount of risk. Further this
strategy has its own advantages and disadvantages which M&S will be required to take
into consideration (Ashton and Morton, 2005). The advantage of this will be that this
strategy is not costly as compared to the strategy of rapid growth. On the other hand, in
case of aggressive competition, this strategy will leave M&S way behind all its
competitor (Marks & Spencer's, 2015).
 Substantive growth strategy- This strategy is also appropriate for Marks & Spencer
because it will help in getting competitive advantage and success in long run. Further it
will also support the company in making or prioritizing all its activities and task which is
important for the success of any business. On the other side, this strategy will limit the
ability of M&S to rake advantage all available economies of scale.
 Retrenchment strategy- M&S can also use the strategy of retrenchment and its advantages
will be improved effectiveness and efficiency of the brand along with cost reductions
(Teece, 2010). On the other hand, this strategy may limit the ability of the retailer to meet
the demand of customers.
M&S can use strategies such as mergers, acquisition , joint ventures and strategic
alliance.
3.2 Justification of strategy selected for M&S
The strategy which will be suitable for M&S is the strategy of Joint ventures which is
also termed as the strategy of Joint ventures. It has been observed that the challenges and issues
which M&S international business is facing is related to weakening of euro and macroeconomic
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factors. Therefore, it can be stated that in such situations, mergers and acquisition will not be that
effective. The rationale behind selecting joint ventures is that it is a limited growth strategy
which will help the brand to obtain maximum growth by taking very less amount of risk (Hagel
and Brown, 2005). This strategy has been selected on the basis of present market situations and
conditions.
TASK 4
4.1 Roles and responsibilities of person which are charged with strategy implementation
Implementing any kind of strategy in business is a very challenging task and it requires
lot of efforts. The person which perform function of strategy implementation posses various roles
and responsibilities. Further he is required to take care of the fact that the best possible strategy
has been adopted by the firm. At the time of implementation he needs to ensure that the best
platform is developed so that problems and issues do not occur at the time of implementation
(North and Macal, 2007). The person is also responsible to take care of all the stakeholders
which will going to have direct or indirect impact from the strategy. On the other side of this, the
role of person is to monitor the entire process of strategy implementation. In this process he will
be also required to ensure that the strategy has been implemented in best possible and desired
manner. The person needs to take care that the interest of each and very stakeholder is
maintained and there is satisfied at its best (Loeppke and et. al., 2007).
From beginning till the end, the person in charge of strategy implementation have various
kind of roles and responsibilities. He is responsible for developing strategy visions and mission
which are very important. In addition to this, vision is termed as heart of any kind of strategy.
Along with this, the person is also responsible for setting up the strategic goals and objectives. It
can be stated that if these objectives are not framed then all the efforts will be in different
directions. The person performs role of strategy developer and executor of the same. In addition
to this, he is required to evaluate the performance of people and need to reward the best
performers.
4.2 Resources required to implement new strategy
At the time of implementing strategy Honda will require some resources which are
mentioned below as:
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 People- One of the most important thing which will be required by Honda at the time of
implementing new strategy is support from people of every level of management. Right
people with right skills and competencies are necessary at the time of employing the
strategy.
 Financial resources- The organization will also require right amount of financial
resources in order to make sure that the strategy has been employed in best possible
manner (Peng Wang and Jiang, 2008). The true cost are required to be identified and
then financial resources should be arranged to meet those cost.
 Technological resources- At the time of implementation of strategy, organization will be
also required to arrange technological resources (Hagel and Brown, 2005). These
resources will make the entire process more effective and efficient.
 Physical resources- Along with human, financial and technological resources, the brand
will also require some sort of physical resources such as production facility, marketing
facility and information technology.
All these resources are required to be arranged on time so that the entire process of
strategy implementation do not have any kind of problem (Chesbrough and Appleyard, 2007).
This will help to eliminate the problem and issues faced at the time of employing strategy. It will
result in accomplishment of the aim and objectives of the organization.
4.3 Contribution of SMART targets in strategy implementation
SMART targets have played very important role achieving successful implementation of
the strategy bin Honda. The contribution is mentioned below as:
 Clear focus- SMART targets has helped Honda to focus clearly on all its targets and
objectives. This has helped in eliminating any kind of confusion during the process of
implementation. SMART targets also assisted in achieving what it was desired.
 Best use of resources- Setting up SMART targets also helped in making the best and
optimum utilization of all the available resources in Honda. Every firm has limited
amount of resources available and what makes it competent is its use of resources.
Setting up SMART targets resulted in prioritizing the things which further lead to best
utilization of resources (Bryson and Lombardi, 2009).
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 Clear decision making- SMART targets has helped Honda in making clear decision at
the time of strategy implementation. The brand was required to make a lot of decision
during the process. These targets resulted in clear decision because of clear focus.
SMART targets also assisted in eliminating issues and obstacles at the time of decision
making.
 Easy monitoring of progress- On the basis of SMART targets the monitoring of entire
process of strategy implementation became very easy for Honda. Further at regular
intervals, monitoring has been done and this has resulted in getting the best possible
outcomes (Peng, Wang and Jiang, 2008).
CONCLUSION
From the above report, it can be concluded that business strategy plays very crucial role
in the success of any organization. Further it can be stated that vision, mission core competencies
and objectives are required to be considered at the time of strategy formulation. Other than this,
it can be also conducted that there are various factors such as employee engagement, innovation
etc. are required to be taken into consideration at the time of formulating strategy. It can be
concluded that McDonald's has positioned itself as delivering same kind of products and services
in different ways.
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REFERENCES
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