Business Strategy Report: Strategic Planning for McDonald's

This report provides a comprehensive analysis of business strategy, focusing on the case of McDonald's. It begins by defining key concepts like mission, vision, objectives, goals, and core competencies. The report then explores factors crucial for formulating strategic plans, including skilled employees, resource availability, and alignment with the organization's vision. Various strategic planning techniques are discussed, such as the Ansoff matrix and SWOT analysis, along with their effectiveness. The core of the report involves an organizational and environmental audit of McDonald's, utilizing SWOT and Porter's Five Forces to assess its strengths, weaknesses, opportunities, and threats. The significance of stakeholder analysis is examined, emphasizing its role in employee motivation, marketing strategies, supply chain management, and corporate citizenship. Based on these analyses, the report proposes a new strategic plan for McDonald's, including quick customer service, improved food quality, cost savings, and product innovation. The report also touches upon the appropriateness of alternative strategies for Marks and Spencer and the roles and responsibilities in strategy implementation.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Assessment of mission, vision, objectives, goals and core competencies of a business..1
1.2 Analyzing the factors to be considered while formulating strategic plans of a business. 2
1.3 Effectiveness of various techniques.................................................................................3
TASK 2............................................................................................................................................3
2.1 Organizational audit for McDonald..................................................................................3
2.2 Environmental audit of McDonald...................................................................................4
2.3 Significance of stakeholder's analysis during strategy formulation.................................5
2.4 New strategic plan for McDonald....................................................................................6
TASK 3............................................................................................................................................6
3.1 Appropriateness of alternative strategies in different conditions.....................................6
3.2 Selection of appropriate future strategy for the current business.....................................7
TASK 4............................................................................................................................................8
4.1 Roles and responsibilities of the personal who are charged with strategy implementation
................................................................................................................................................8
4.2 Resources required for implementing new strategy.........................................................8
4.3 Contribution of SMART targets in achieving the strategic implementation in Honda....9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategies are defined as the long term plans of actions that are designed to
achieve a specific set of goals of a firm. It can be described as the long term business planning.
Business strategies are concerned with the leading resource issues of business. For instance,
increasing finance to set up a new business is a kind of strategy that businesses adapt to make the
new start up a success (Adner and Levinthal, 2004). This report is based on the process of
strategic planning and various approaches to strategy evaluation. Further, it covers case study
related to three firms namely McDonald, Honda and Marks and Spencer. It includes the
alternative strategies which are used in market entry and responsibilities of the personal who are
charged with strategy implementation.
TASK 1
1.1 Assessment of mission, vision, objectives, goals and core competencies of a business Mission: Mission is defined as a statement that is used as a mode of communicating the
purpose of organization. It is a purpose by which a business intends to serve its
stakeholders (Banker, Chang and Pizzini, 2004). Moreover, mission describes the reason
for which an organization is running their business, identifies their customers and
assesses the range of their products along with the way to serve their customers and
firms. Vision: After determining the organization's mission, a vision reflects the ideal image of
organization for future to achieve the mission. Vision shows the growth and expected
benefits of business to the stakeholders and investors. It incorporates a shared
understanding of nature and purpose of business and holds this understanding to take the
business towards greater purpose (Baye and Beil, 2006). Organization’s effective vision
provides a sense of belongingness to the stakeholders, which help them in attaining their
goals. Objectives: Furthermore, an objective of an organization is described as the overall
purpose and mission of a business which is established by the management and pass on to
its employees to work towards achieving it. Company’s objective typically focuses on its
functioning and its overall business philosophy that can provide helpful guidance for
employees.
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 Goals: Organizational goals are predetermined and describe the future results for which
present business efforts are directed. Goals can be of two types, that s, official and
operative. Official goals are the basic aim of a business which can be seen in the
corporate charts, annual report and public statements (Bell, Crick and Young, 2004).
However, operative goals indicate the actual purpose of an organization.
 Core Competencies: Core competencies are the special belongings which help the
business to become superior from the competitors such as specific products, quality,
brand image or skills. However, core competencies also help a business to have a strong
reputation between customers.
1.2 Analyzing the factors to be considered while formulating strategic plans of a business
Factors that have to be considered while formulating strategic plans of a business are as
follows: Team of skilled employees: It is an essential factor of organization to have the team of
skilled employees to formulate the strategic plans. If the employees are not
knowledgeable to work effectively in order to achieve the organization’s goals and
objectives then it can be difficult for a business to formulate the business strategies
(Caloghirou, Vonortas and Ioannides, 2004). For instance, if a manufacturing company
does not have employees who can handle the machinery then they will be failed to
achieve the organizational goals and it will be difficult to formulate the business
strategies as well. Availability of resources: Moreover, availability of resources is also an important factor
to formulate the strategic plans. While formulating business strategies, it is necessary for
the business owner to receive input from all the members of management team. Each
employee of the organization contributes with his knowledge and wisdom to make the
strategies effective.
 Consideration of vision and mission of organization: It is essential for organization to
consider the mission and vision of it while formulating business strategies. Firm develops
the business strategies on the basis of mission and vision of a business (Chesbrough and
Appleyard, 2007).
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1.3 Effectiveness of various techniques
There are many strategic plans which a firm can follow. Following are the various
strategic planning techniques that possess certain effectiveness which can be considered while
planning in different firms. They include: Identification of various options – With the help of Ansoff matrix, organizations with
different management teams will be able to identify different options that are available to
them and selecting the best one in accordance with their vision. Setting target accordingly – Once they identify the risk factor and to determine the
possibility of strategy implementation in market, the management team of firms will be
able to set their targets accordingly that prove to be very effective for the firm (Cinquini
and Tenucci, 2010). Analyzing the risk – Under each available option, they can analyze the risk elements that
are associated with them in order to minimize these and to work with greater efficiency to
get the desired results.
 SWOT analysis: This type of technique is involved in the organization with constituting
the factors like weaknesses, strengths, opportunities and threats (Doole and Lowe, 2008.).
Firms will be able to take advantage through this analysis as they will be able to identify
their strengths and through these strengths, they will be able to overcome their weakness.
TASK 2
2.1 Organizational audit for McDonald
It is essential for the firm to conduct the organizational audit as it allows company to
identify their internal capabilities while commencing business (Fleisher and Bensoussan, 2003).
In context to McDonald, the organizational audit can be done by identifying its weaknesses and
strengths with the help of SWOT analysis. It is as follows:
Strengths:Has the largest market share for
food
 Brand valued to be $40 billion
 Advertising budget $2 billion
 Targets are children and youth
Weaknesses:
 Unhealthy food menu
 False publicity
 Competitors
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Opportunities:
 Providing healthier food
 Home delivery
 Adapting new practices
 Adopting new schemes
Threats:
 Fluctuations in currency
 Lawsuits against McDonald
 Local restaurants for fast food
2.2 Environmental audit of McDonald
Use of Porter's 5 forces for business environment and strategic positioning:
Porter's five forces are very simple but powerful tool which helps to understand the business
situation. It helps in knowing the strength of competitor’s positions. These forces will be helpful
for knowing external factors which influences McDonald (Jermias, 2008). Intensities of the five
forces are as follows:
Threat of competition (High)
 High competition for fast food
 High competitors advertising capability
 Major competitors like YumBrand INC. and Burger King
Threat of New Entrance (High)
 Low start up cost and easy access market
 Example, Market penetration of SubWay
Threat of substitutes (Low)
 Availability of McDonald products
 Introduction of local products
Power of suppliers (Low)
 Large number of suppliers(weak force)
 High overall supply(weak forces)
Power of buyers (Low)
 Less changes of switching
 Low quality purchase
In addition to it, through this analysis, McDonald will be able to determine their rival firms and
focus over their strategies to be overcame. They will formulate plans by considering the business
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practices of competing organizations that will allow them to position themselves more strongly.
Another usefulness is they will be able to understand the business environment by identifying the
degree of substitute products and threats substitute products that are available in the market and
try to make their range of services and products more innovative and unique (John, 2005).
Moreover, McDonald will be able to determine the requirements and needs of the customers and
could formulate strategies accordingly to meet the demand and supply in market.
2.3 Significance of stakeholder's analysis during strategy formulation
Stakeholder analysis refers to the process of determining the interest of stakeholder as
who should be considered while formulating strategies by the firm. It carries vital role during the
planning process which is stated below concerning management: Employees motivation – It has to be determined whether there is an important role of
employees in any particular strategy formed by McDonald so that they can be encouraged
to give the best performance (Montgomery, 2011). These employees should be provided
with all the requirements so that they may participate actively in formulation of
strategies. Marketing strategies – While making any strategy for the firm customer stakeholder
must be taken into account as they are the key respondent who adopt product of the
company (Olson, Slater and Hult, 2005). With the help of stakeholder analysis, their
degree of influence can be identified by analyzing their role in planning process. Firm
should consider all the needs and requirement of the customers and accordingly they
should develop new strategies. Supply chain management – At the time of major planning, the impact of supplying
agencies should be identified. This will help in developing close relationship with
suppliers at the time of material requirement under developed plan. In applying new
strategies firm will require materials, considering these stakeholders firm will be able to
get the required materials ion time (Peng, 2002).
 Corporate citizenship – Being a large scale enterprise, McDonald has to focus over
corporate citizenship by analyzing the social factors. It is done by the help of stakeholder
analysis to determine the social responsibilities that company have to fulfill while
planning a certain strategy.
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2.4 New strategic plan for McDonald
Considering the organizational audit as well as stakeholder's analysis, there are certain
factors that have been addressed. McDonald is facing certain weaknesses that they have to
overcome along with some market threats, but with their existing brand image and range of
products, they are expected to lead the market for longer time period (Peng, Wang and Jiang,
2008). Following are the new strategy which McDonald can adopt: Quick customer service: Firm should try to find out ways to speed up the services
provided to customers. This will be helpful in satisfying the customers quickly and they
will get loyal feeling that what they desired is in front of their eyes. Improving food quality: The products which this firm provides should be of high quality.
By providing high quality product firm should be able to develop confidence among their
customers regarding the products quality. Saving through reducing promotion: McDonald spends almost $2 Billion for
promotional activities. By saving through promotional activities firm will be able to use
that amount on other useful activities (Ritter and Gemünden, 2004).
 Innovating new products: McDonald does have a vast variety of products. But it has to
develop more innovations so that new customers can be attracted. Providing large scale
of product line would help in attracting customers and in fulfilling all their required
demands (Rosenbloom and Dimitrova, 2011).
TASK 3
3.1 Appropriateness of alternative strategies in different conditions
There are different conditions in which Marks and Spencer have to make appropriate
selection of alternative strategies which they can apply. Before selecting the best alternative, the
different strategies that can be followed have to be discussed that is presented under:
Market entry: It is the strategy that is formed when the firms aims to enter into the entire new
market with their existing products along with some new range of services in which they deal
with. There are different types of strategies which a firm can adopt (Salaimeh, 2008). There are
many factors which affects in selecting the market entry strategy like transportation cost, tariff
rates, etc. few market entry strategies are: Direct Exporting, Licensing, Franchising, Partnering,
Joint Ventures, etc.
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Substantive growth: It is done to reduce the degree of competition by providing wide range of
current type of product. Firm will have to introduce innovative products which will help in
attracting customers. Through this the value of competitor product will come down. Strategies
which can be adopted in this are horizontal and vertical integration (Simerson, 2011). Horizontal
integration means, consolidation of firms which provides same kind of products. Vertical
integration is one firm providing different products. In addition to this diversification is another
type of strategy where the firm develops product different form the products of other firms.
Limited growth: When the company plans for limited growth in the entire market and satisfied
with their current strategies. Strategies which can be adopted in this type of market entry strategy
is market penetration. In this strategy the firm focuses on their existing products and tries to
develop new strategy to increase their sales (Teece, 2010). Example, a product with many
substitutes sells their product at almost same price. By reducing the actual price of the product
will help in increasing the share of the market.
Retrenchment: It is the situation when the firm plans to wind up their business from market of
any particular area or complete closure of the business. This can be done through strategies like
disinvestment and liquidation.
3.2 Selection of appropriate future strategy for the current business
Considering the brand image of Marks and Spencer with their long term vision, the best
strategy that can be adopted by this firm is Substantive growth. As it a specialist in home
products, clothing, and luxury food products they should focus on their products which will help
them in competing effectively with their competitors (Dahl, 2015). The major competitors for
Marks and Spencer are Tesco, NEXT plc and Asda group limited. These competitors adopt
different strategies to attract customers. Similarly, Marks and Spencer should adopt market
penetration strategy which will help them in adopting new methods in attracting customers and
in competing effectively with their customers. It is recommended that being the largest retail
firm in UK, they must try to grow into European nations as well. It will eventually raise their
market share which is an ultimate objective for gaining long term success. It will provide
opportunity to company to enter into new market and deliver their services to gain customer
loyalty for long term sustainability.
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TASK 4
4.1 Roles and responsibilities of the personal who are charged with strategy implementation
In implementing any strategy Honda have to emphasize over certain issues related to
roles and responsibilities. Following are the responsibilities and roles which emphasized by
Honda: Involvement: When applying any kind of new program or policies requires active
participation form all the departments. Managers should understand these departments
and develop an implementation team which will consists of each members form different
department. These selected member will look after the implementation of new policy or
programs are followed properly. Interest: Implementing new strategy or change requires a feeling of urgency among all
the members of the firm (Baye and Beil, 2006). It is the role of management to develop
urgency among the employees by making them understand the benefits of improvising
new strategy.
 Monitoring: Implementing any strategy within any firm is not enough as new strategy
has to be monitored to know its effectiveness. It is the responsibility of manager to
monitor the strategy so that drawback can be found out and steps can be taken to improve
them.
4.2 Resources required for implementing new strategy
Resources are very important in implementing new strategies. Following are the
resources which help in implementing new strategies: Financial resources – For implementing any type of policies fund is very essential.
Honda has to make arrangements of huge amount of funds to fulfill their recurring
demands (Banker, Chang and Pizzini, 2004). In addition to this, before implementing any
kind of program or policies firm should have an estimate amount which will be incurred
in applying the policies. Human resources – In order to implement the new strategies human resources are very
important in implementation. Manager will allocate duties to the employees which will
support in achieving the goals through new policy. Material – The material that has to be procured and available with Honda has to be
identified. Firm should always use their own resources or materials in implementing
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strategies as it will help them in reducing the cost. Further, they should know the material
which will be used in adopting the new strategy (Adner and Levinthal, 2004). This will
help the firm to know the need for further purchase for which they have to make contact
with their suppliers for materials.
 Time availability – The time limit has to be set by company along with the prediction of
correct time at which they have to implement strategy. By setting time restriction, Honda
will be able to get quick results. It will help in knowing the appropriate time by which the
firm will be able to adopt their strategy fully.
4.3 Contribution of SMART targets in achieving the strategic implementation in Honda
In order to determine the feasible output, SMART objectives are identified and associated
with the strategy of the firm. They are formed to determine whether it will be possible to create a
plan and obtain outcome or not (Our strategy, 2015). They must be compared with the past
policies in order to evaluate the success of plan. After considering all these factors, a strategy is
implemented. In relation to the strategy by Honda, they are as follows:
Specific: The goals that are set by Honda are specific that they want to increase their market
share by entering into new corporate environment of other nations.
Measurable: The goals are measurable in terms of quantitative results by identifying the outputs
and customer share that they have earned in the foreign market.
Achievable: The objective of Honda is achievable as they tend to increase their market share
which is possible by applying different strategies.
Realistic: Vision of the company to enter into the foreign market is realistic as it is possible and
is attainable in the business environment.
Time constrained: Time limit is set by Honda so that the goals can be obtained in relatively less
time period with efficiency.
CONCLUSION
From this report, this can be articulated that mission, vision, objectives and goals are very
important as it helps in setting up target which has to be achieved by the firms that also in a
given time span. Further, SWOT and Porters five forces are very important in knowing were the
firm stands. In addition to this it also helps in knowing the strategies which an organization adopt
with accordance with the results found from this analysis. Moreover, in applying any strategy
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human resources are very important in adopting any new strategy as they are the one through
which new strategy can be implemented.
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