Business Strategy: Analysis of McDonald's, Marks & Spencer, and Honda

This comprehensive business strategy report delves into strategic planning, evaluation, and implementation, using case studies of McDonald's, Marks & Spencer, and Honda. The report begins by defining key terms like mission, vision, objectives, goals, and core competencies, highlighting their role in strategic planning. It then analyzes factors influencing strategic plan formulation, including the impact on managers, targets, resources, and time. The effectiveness of techniques like the Ansoff Matrix is evaluated. The report then presents an organizational and environmental audit of McDonald's, including SWOT and PESTLE analyses, followed by a new strategy proposal. The report further explores strategic evaluation, analyzing alternative strategies for Marks and Spencer, and justifies the chosen strategy. Finally, it assesses the roles and responsibilities in strategy implementation, focusing on resource requirements and the contribution of SMART targets within Honda. The report provides a thorough analysis of the strategic planning process from multiple perspectives.

Business
Strategy
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TABLE OF CONTENTS
Introduction .....................................................................................................................................4
Task 1- Understand the process of strategic planning.....................................................................4
2.1 An assessment of how the missions, visions, objectives, goals and core competencies.......4
of a business inform the process of strategic planning (AC1.1).................................................4
2.2 An analysis of the factors that have to be considered when formulating strategic plans......5
(AC 1.2)......................................................................................................................................5
2.3 An evaluation of the effectiveness of the techniques which are used when developing.......6
strategic plans for a business......................................................................................................6
3.0 Task 2- Be able to formulate a new strategy..............................................................................7
3.1 Brief background on the company.........................................................................................7
3.2 Conduct an Organizational audit of McDonalds (AC2.1).....................................................8
3.3 Conduct an Environmental audit of McDonalds (AC2.2) ....................................................9
3.4 The significance of stakeholder analysis when formulating a new strategy (AC2.3).........10
3.5 Present a new strategy for McDonald's (AC2.4).................................................................11
Task 3- Understand approaches to strategy evaluation..................................................................11
4.1 Background on the company...............................................................................................11
4.2 An analysis of the appropriateness of alternative strategies related to market entry
substantive growth, limited growth or retrenchment for Marks and Spencer( AC 3.1)............11
4.3 A justification of the strategy that is selected for Marks and Spencer (AC3.2)..................13
Task 4- Understand how to implement a chosen strategy.............................................................14
5.1 Background on the company...............................................................................................14
5.2 An assessment of the roles and responsibilities of personnel who are charged with strategy
implementation (AC4.1)............................................................................................................14
5.3 An analysis of the estimated resource requirements for implementing a new strategy for
Honda (AC4.1)...........................................................................................................................15
5.4 An evaluation of the contribution from SMART targets to the achievement of strategy
implementation in Honda (AC4.3)............................................................................................15
Conclusion ....................................................................................................................................15
References......................................................................................................................................17
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Illustration Index
Illustration 1: Ansoof Matrix Model................................................................................................7
Illustration 2: Stakeholder mapping ..............................................................................................10
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INTRODUCTION
In the modern era, every enterprise is required to formulate effective business strategies
in order to accomplish its aim and objectives. Nowadays, the competition among companies in
almost every sector has become so intense that it is not easy for them to gain advantage over
other market players (Singh, Sharma and Chahal, 2011). Thus, development of potential
strategies results in increasing sales and profitability of a business enterprise by creating more
and more awareness among people in the market. The present research reports explores the
contribution made by vision, mission, objectives, core competencies in strategic planning of a
business enterprise. Along with this, it also highlights the key factors which needs to be
considered at the time of carrying out the process of strategic planning.
TASK 1- UNDERSTAND THE PROCESS OF STRATEGIC PLANNING
2.1 An assessment of how the missions, visions, objectives, goals and core competencies
of a business inform the process of strategic planning (AC1.1)
In the current scenario, formulation of strategic plans has become very important for
overall growth and success of an organization. Further, strategic planning is termed as a system
process in which companies determine how resources allocation will take place. Strategic
planning also involves formulation of action plan to accomplish aim and objective of a business
enterprise.
Key terms Definition Example
Mission It can be defined as the core
purpose for which a company
operates (Dimitrakopoulou,
2015)
The mission of McDonald's is
to become the favorite place
for customers in terms of
eating and drinking.
Vision It is defined as the statement
which reflects what a company
wants to achieve ultimately
To be a progressive burger
company by providing
customers with the best service
and product experience
Objectives These are the end points which To offer healthier alternatives
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a business enterprise wants to
achieve
to its customers within next
one year
Goal Goal of a company reflects
what particular things it wants
to accomplish over a specific
time
To provide customers with
products and services which
are of high quality and has
value for money
Core competencies These are the unique attributes
and things which make one
business different from other
market players
High quality products at low
prices is core competency of
McDonald's.
It can be expressed that in order to formulate effective strategic plans, it is required by
every business enterprise to consider its aim, objectives, vision, mission and core competencies.
The purpose behind development of strategic plans is to operate smoothly and gain competitive
advantages (Casadesus-Masanell and Ricart, 2010). Therefore, all the above mentioned elements
provides businesses with a clear direction regrading the fact what it wants to achieve. On the
basis if its core competencies, businesses can develop suitable plans to accomplish their aim,
objectives, vision, mission.
2.2 An analysis of the factors that have to be considered when formulating strategic plans
(AC 1.2)
At the time of formulating strategic plans, businesses are required to take care of different
factors. The rationale behind this is that these factors have direct impact on strategic plans and
can affect their effectiveness in negative sense. The key factors are mentioned below as:
 Impact on managers- In the present scenario, it is required by companies to determine
that what kind of impact will the formulated strategic plans will have on managers.
Nowadays manager are playing very important role in success of a business enterprise by
managing its operations ion effective manner (Zott, Amit and Massa, 2011). Thus, during
the process of planning, company needs to make sure that is the plans are feasible and do
not affect manager in negative sense.
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 Targets- It is another important factor which needs to be considered during the process of
strategic planning. The reason behind this is that all plans are being made with a purpose
to accomplish a particular thing. Thus, targets supports in developing more effective
plans as strategies are being develop with the help of a clear direction provided by those
targets.
 Resources- Companies also required to considered the major resources which they have
at the time of formulating strategic plans (Baden-Fuller and Morgan, 2010). On the basis
on resource available, businesses can determine how much financial and human resource
can be invested.
 Time- It is another major factor which needs to be considered during the process of
strategic planning. It is required by businesses to develop an appropriate and specific time
in which the plans can be accomplished.
Positive Negative
Taking care of the strategic plans impact on
managers will support in developing sense of
satisfaction among all managers
It will make the process of strategic planning
more complex.
2.3 An evaluation of the effectiveness of the techniques which are used when developing
strategic plans for a business
In order to develop effective strategic plans, here are various techniques which can be
used by a business enterprise. Some common techniques are Space, Boston Matrix and Ansoff
Matrix model which can be implement for carrying out the process of strategic planning. The
model of Ansoff matrix is considered as one of the most effective technique which can be used
by managers and businesses. Furthermore, the matrix consists of four major grid or quadrants
which is used in order to develop strategies to achieve aim and objectives (Astrachan, 2010). On
the basis of aim and purpose of a business enterprise can choose any one of all the available
strategy. For example if a brand aims at increasing its sales and profits in home market, it can
adopt strategy of market development. According to this strategy companies are required to
establish new sales channels and carry out strong marketing in order to increase sales in existing
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market. On the other hand, risk taking businesses can adopt the strategy of diversification where
new products and services are introduced to new markets.
Thus, it can be stated that the technique of Ansoof Matrix is more effective in terms of
strategic selection. The rationale behind this is that it provides businesses with more effective
and the best suitable strategy as per their need, objectives and nature.
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Illustration 1: Ansoof Matrix Model
(Source: Carroll and Shabana, 2010)

3.0 TASK 2- BE ABLE TO FORMULATE A NEW STRATEGY
3.1 Brief background on the company
McDonald's is one of the leading international chain of hamburgers restaurant which is
presently operating in more than 121 countries of the world. Furthermore, is operates with more
than 30000 restaurants and has employed more than 42000 employees. The brand was
established in the year 1954 and its core products includes french fries and hamburgers. It can be
stated that since its establishment, McDonald's has always followed the strategy of aggressive
expansion (McDonald, 2015). This means that irrespective of market conditions, it has always
looked forward to increase its number of store and expand in international markets. The key
concept behind selection of aggressive strategy was that more number of outlets will attract more
customers and this will directly results into increasing sales and profits. At present, McDonald's
is leading brand in fast food industry of the world and it has acquired high degree of customer
loyalty and satisfaction.
3.2 Conduct an Organizational audit of McDonalds (AC2.1)
Organization audit can be defined as the process in a systematic assessment is carried by
out in order to become aware of the methods, operations, strategic and processes of a business
enterprise. Furthermore, it is very beneficial for companies to carry out organizational audit as it
directly contributes in development of effective strategies to gain advantage over other market
players (Aaker, 2008). Value chain analysis, bench-marking and SWOT analysis are some
techniques which can be used for carrying out audit of an organization. It can be stated that
SWOT analysis is one of the most commonly used technique for organizational audit. It supports
in getting aware about the key strengths, weaknesses, opportunities and threats faced by
company (Baker and Hart, 2008). On the basis of this assessment, companies can become aware
the key areas where they are lacking. SWOT analysis of McDonald's is mentioned below as:
Strength
 One of the core strengths of
McDonald's is its brand name which is
highly recognized all across the world
 Quality of its food products and
Weakness
 McDonald's is very weak in terms of
new product development
 Declining market share in last few
years has emerged as another major
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services is another core strength of the
brand
weakness of McDonald's.
Opportunities
 The brand has opportunities to carry
out international expansion as there are
many markets which are not explored
by McDonald's.
 It also has opportunity to form joint
ventures with retail supermarkets
Threat
 High degree of competition in market
has emerged as the major threat in front
of McDonald's
 Another threat is that people have now
become health conscious and they are
now looking forward for healthier
products
3.3 Conduct an Environmental audit of McDonalds (AC2.2)
Environment audit can be termed as an effective assessment carried out with an objective
to become aware of external environment factors which can affect performance and operations of
a business enterprise. PESTLE and Porter five forces are the two common techniques used to
carrying out environment audit of a business enterprise (Hagel and Brown, 2005). Further
PESTLE analysis is a technique which assist companies to become aware of major external
factors and their relevant impact on business operations. The PESTLE analysis of McDonald's is
carried out below as:
PESTLE FACTORS
Political factor McDonald's is executing their chains in most of the countries therefore,
political factor mainly impact their activities in the different region. The
company need to abide various regulation and rules that are framed by
the government in order to maintain hygiene factor within their products.
Along with this, political factor also include different trade agreements
as well as tax reform that company must ensure to sustain its position
within different region.
Economical factor Another external factor that impact the operations of McDonald's include
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economical factor that assists the fast food company in taking effective
decisions regarding importing or exporting their raw material. The factor
also include tax rates, tariffs etc. that ensure calculations of Tariffs on the
raw material that is imported within the countries.
Social factor Another factor that exists in the external marketplace that directly impact
the performance of fast food chain is changing or evolving lifestyle and
preferences of the customers. In the present scenario, preferences of
customers get change as they are seeking to purchase healthier fast food.
Therefore, McDonald's must ensure change in their products that they
offer to satisfy the demand of customers.
Technological factor Another external factor that impact the performance and operation of
McDonald include technological factor. Implementing high
technological equipment will develop the activities of management as
well as it also improve the productivity of the fast food organization.
With the increasing technological factor it support the customers in
making payment of food in effective manner.
Legal factor In addition to this, another external factor that is key concern to fast food
company is adhering the legal requirement in the workplace. The legal
factor mainly include implementing labour laws, employment law etc. so
that they may not engage in any unethical activities. For instance,
company need to abide animal welfare regulation that support in
implementing the practices and policies to ensure proper welfare of
animals.
Environmental
factor
The last external factor that affect the operational activities of McDonald
include environment factor that ensure fast food company must engage
in conducting Corporate Social responsibilities activities for protecting
the surrounding or society.
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3.4 The significance of stakeholder analysis when formulating a new strategy (AC2.3)
Stakeholders can be defined as all people and parties which are indirectly or directly
affected by operations of an organization. Furthermore, external and internal are the two main
stakeholder of a business enterprise (Loeppke and et. al. 2007). Stakeholder analysis is a process
which is carried out with an objective to determine how major stakeholder will be affected by a
proposed plan. On the other hand, stakeholder mapping is an effective tool which is used to carry
out analysis of firm different stakeholders.
It can be stated that it is very important for businesses to carry out stakeholders analysis
at the time of formulating and implementing a new business strategy. Internal stakeholder such
as employees and managers are directly affected by operation of a company therefore, it is
required to carry out analysis of these stakeholders before implementing any strategy. On the
other hand, analysis of external stakeholder such as suppliers and customers help in getting
aware of the fact that whether the developed strategy will produce desired results or not.
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Illustration 2: Stakeholder mapping
(Source; North and Macal, 2007)

3.5 Present a new strategy for McDonald's (AC2.4)
On the basis of above carried out internal and environment audits, it can be stated that the
strategy of product development can be adopted by McDonald's. Further, the brand will be
required to develop new product as per chaining demands and taste of people in marketplace. As
it has been already discussed that the major threat which has been faced by McDonald's is related
to the fact that people now prefer to consume healthier food products instead of burger and fries
(Olson, Slater and Hult, 2005). This threat can be converted into potential opportunities by using
strategy of product development. Here the brand can introduce new range of burgers which are
healthier and do not contain any kind of fat or cholesterol. This will help McDonald's to attract
customers and increase it sales. Along with this, it will also support in getting competitive
advantages over other market players.
In addition to this, McDonald's must also focus on the framework that is Porter's generic
model that basically target on the three generic strategies that support the company in attaining
growth in competitive fast food industry. Basically this framework focuses on three growth
strategies that cost leadership, differentiation as well as focus strategy. The foremost strategy is
cost leadership through implementing this strategy company would attain superior profit through
offering their products in the lower cost. On the other hand, another strategy within the model is
differentiation strategy that focuses on creating unique product within the industry to attain
growth and target the large audiences. This new strategy must be focused by McDonald that
assists them in attaining the growth in fast food industry. The last strategy within the framework
include focus strategy under which company concentrate the specific area or segment within the
market so that they may sustain in the market. Therefore, the proposed new strategy according to
porter's generic strategy is differentiation strategy through which they can create unique fast food
product that keep attract customers towards McDonald's.
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