McDonald's has achieved success through strategies that attract and retain customers. The company aims to meet diverse customer needs through affordable prices, a global presence, and a wide variety of products. However, McDonald's also faces weaknesses like past scandals and public relations issues. Going forward, McDonald's can capitalize on opportunities in growing markets and lower labor costs in some regions. Threats include increased government regulations and commodity price rises. Overall, McDonald's balanced scorecard shows financial progress and many satisfied customers, demonstrating that its strategies have been largely effective.

1. Running head: STRATEGY
1
STRATEGY
3
Strategy
Student’s Name
University Affiliation
The market of contender advantage is extreme and muddled
where to pick up esteem related position about the item assumes
the characterizing part. When I addressed the General Director
(Advertising) of Delegate and Gamble, I found the present
observation about this example that he could see through his

2. experience of the occasions. I got some information about the
marketing methodology of the organization to which he reacted
speedily and said that they are concentrating on increasing
decent amount in the market without neglecting to give quality
administrations to the clients. I vitally centered then around the
subject of significant worth extent to which, he answered that
the organization was anticipating distinct or consubstantial
advantages together, which could enable them to get to the
general execution in the market. My consideration and interest
made me solicit him that what is a technique from the
organizations for increasing most extreme upper hand. He
answered decidedly that the team is looking forward keeping up
its most extreme market scope and additionally guaranteeing
that the items were available advantageously and to give a
feeling of feeling significant factor to the clients about the
issue.
Part II
Among the different units of the items, I chose Global BABY
FEMININE and FAMILY CARE unit. In such group there are
numerous excellent, dependable best items sort like,
Dependably, Abundance, Luvs, Naturella, Spoils, Dodot, Puffs,
whisper and the sky is the limit from there. Such things are,
particularly for infant and females. This unit is additionally
particularly vital because it related with the newborn children or
little children. The objective clients of this unit are kids (0-3
years) and females (13 years or more) at that point the duty of
association increment. The organization must confirm that they
are giving reliable, clean and agreeable item classification to
their clients (Hanson, Hitt, Ireland, & Hoskisson, 2014).
Items profile depiction for such unit is that such item is having
the second position a piece of the overall industry. Their
primary rival is Johnson and Johnson, Unilever. Item class of
this unit is including child scoops and jeans, clean cushions,

3. paper towel, tissues and bathroom tissues. According to the
BCG Grid, such products are on the star position, where a piece
of the overall business of the organization is large with high
picking up.
Target Customers
The objective clients of these products are kids (0-3year),
women (above 13 years) and can be entire family. Child scoops
and jeans, paper towel, tissues are epically for kids, the entire
family can use sterile cushions for women and tissue, a paper
towel. Entire classes of items give a delicate and delicate taste
to its clients. Elements keep the sterile feel and are high
quality, and haphazardly used. Such products can be used
whenever anyplace at whatever point required. Their conveying
is simple, and practice of using it gives a decent impact.
Analyzing customer need
According to the discourse of GM promoting, I found that
organization adequately perceived the need of its clients. All
guardians need to give a solid and clean condition to their
children or family. Children are not ready to inform their folks
concerning the nature call (Pee and Potty) guardians need to
deal with them, which protect them by some skin infections. Be
that as it may, they cannot take care of them. For such reason,
the organization is giving infant scoops and jeans, which keep
them safe and give sterile wellbeing. This is likewise because of
the female when they utilize clean cushion. All items intended
to give a delicate and sound understanding to its clients (Kim,
& Mauborgne, 2015).
Such question is especially vital that why they buy our item?
For what reason not contender's items? Keeping the view of
clients require our methodology isn't regarding our self as an
organization yet we regard ourselves as relatives of the clients

4. who are mainly mindful of their health and security. Our goal is
to give a decent administration, uniqueness, the advantageous
and moderate cost to our clients with the organization vision,
"to give to give super nature of items and administrations with
the considerable value".
Position of Products
The organization's primary rivals are Johnson and Johnson,
Unilever who are otherwise called world best organizations.
According to advertise position P&G having the 11 most
prominent groups on the planet abandoning Johnson and
Johnson, Unilever. The Organization is having the most
significant pieces of the pie in the market. Our item separations
drop by perceiving its image, bundling, administrations,
advertise accessibility and its quality. Our goal is not to offer
the item we are making relations, sharing the feeling and giving
them sound and cheerful condition. An organization has several
class items brands, which are accessible in the entire market,
and the cost of such items, are exceptionally bona fide as
pressure to its rivals. We are not offering cost arranged items
we are offering client situated items (Osterwalder, & Pigneur,
2013).
Exchange with GM advertising and pick up information from
their experience I go to the outcome that the primary wellspring
of getting the upper hand is to be picking up client put stock in,
their dedication and receiving a place in their heart. Such can be
a win just by demonstrating excellent quality trust, exceedingly
fulfilling worth and client arranged system. We should center
on long-haul client require and prepared continuously to
perceive their need effortlessly.
References
Hanson, D., Hitt, M., Ireland, R. & Hoskisson, R.

5. (2014). Strategic management:
competitiveness and globalisation. South Melbourne, Victoria,
Australia: Cengage
Learning.
Kim, W. & Mauborgne, R. (2015). Blue ocean strategy: how to
create uncontested market space
and make the competition irrelevant. Boston, Massachusetts:
Harvard Business Review
Press.
Osterwalder, A. & Pigneur, Y. (2013). Business model
generation: a handbook for visionaries,
game changers, and challengers. Hoboken, N.J: Wiley.
Compare and contrast strategic controls and financial controls.
Provide specific examples of how each may be used to best
serve a corporation.
As a strategic leader, determine if you would feel ethically
responsible for developing your firm’s human capital and state
why. Discuss whether or not you believe your position is
consistent with the majority or minority of today’s strategic
leaders.
Running head: STRATEGY 4
1
STRATEGY 4

6. 8
Strategy 4
Student’s Name
Institution
Date
Part I: Internal Environmental Scan
Mission, vision, and values
McDonald’s has a mission of becoming a burger company which
is progressive and provides contemporary customer experience.
The desire for the company to make sure that the needs of the
customers are taken good care of is what drives it. The vision of
the company is to become the global organization that provides
quick services which are in line with the needs of the customers
(Meyer, 2017). It is apparent that the mission and vision
statements of McDonald’s are in line with its strategies.
McDonald’s believes in the value of having a good relationship
with the customers, and that is only established through services
which are outstanding. The company has the desire to reach
different types of customers in the world and provide
contemporary experience, and this aspect is present in its
strategy to make sure that it reaches as many customers as
possible by opening outlets in different parts of the world.
Strategy clarification
McDonalds’ is an organization that makes sure that its services
and products are in line with the needs of the customers. When
it comes to the value proposition, McDonald’s has made sure to
have a wide variety of products, and that makes sure that
customers who come to the restaurants are diverse because they

7. know that what they need is available at the restaurant (Meyer,
2017). When it comes to the aspect of the market position, the
interviewee confirmed that the company had positioned its
products in the market in a way that people from different walks
of life can afford. The company covers the low-income earners,
the medium income earners, and middle class. Having different
outlets in different parts of the world has worked perfectly as a
competitive advantage for McDonald’s.
Cultural assessment
McDonald’s believes in the culture of assisting the employees
to attain their goals. The culture has made the company
successful though there is a barrier of directly impacting the
lives of the employees (Meyer, 2017). The company has failed
to motivate the employees enough as far as their salaries and
payments are concerned. However, when it comes to giving the
employees the power to take control, the company has done a
tremendous job.
Value chain analysis
McDonald’s restaurants are owned by the company, and at the
same time, they are operated by independent franchisees. The
company uses this strategy to make sure that it reaches a wide
variety of customers and also works with local investors to
increase the market share. However, the company still retains
the right to the brand, and it receives a specific percentage of
the franchisees (Meyer, 2017). When it comes to marketing, a
universal advertisement is made by the company where it
assumes the total cost. The competitive disadvantage is evident
in the case of franchisees. Some of the franchisees might
deviate from the mission and vision of the company, and the
effect might be on the whole company.
Summary of findings
It is apparent that the mission and vision of McDonald’s have

8. been accompanied by a strategy that helps the company to attain
its goals. The company has put in measures and strategies which
attract more customers than most of the competitors (Meyer,
2017). The culture and the value chain supply help the company
to meet the needs of the customers.
Part II: SWOT Analysis
Strengths
1. Friendly prices
McDonald’s is one of the restaurants which have a strong brand
and have products which accommodate the low-income earners
as far as price is concerned (Krull, 2010). The prices act as
strength because they attract more customers who feel like other
restaurants charge more than they can afford.
2. Global presence
McDonald’s has different outlets in more than 120 nations.
Because the company covers a bigger market share, it has the
advantage of reaching more customers than most of its
competitors.
Weakness
1. Scandals
McDonald’s has been involved in a scandal that almost damaged
its reputation. The company was accused of tampering with the
expiry dates of meat and at the same time selling rotten meat
(Krull, 2010). The scandals are a weakness because the
company is in the food industry where it is expected only to sell
products which are fit for human consumption.

9. 2. Public relations
The issue of underpaid employees has affected the reputation of
the company, and that is likely to force the customers out
(Krull, 2010). At the same time, there have been complaints of
the complicated menu, and that has played to the disadvantage
of the company putting it in a position where it would likely
lose the customers to the competitors.
Opportunities
1. Growing markets
The cultures of eating fast food and in restaurants are growing,
and this comes along with the growth of the markets. Tourism is
growing as well, and it affects the hotel industry (Krull, 2010).
Also, there are nations which need the services of some of the
advanced organizations because their local investors have not
established restaurants which fit a global level. Because
McDonald’s is a global organization, it has the opportunity to
utilize such opportunities and make more profits.
2. Low cost of labor
Cost of labor in some of the developing nations is low, and that
means that organizations which invest in such nations benefit
(Krull, 2010). The company has an opportunity to extend its
business to such nations, and by doing so, it will increase its
profits.
Threats
1. Government’s regulations

10. Some governments have plans of regulating the local food
industries. Government regulations are likely to affect the
company negatively. At the same time, there are governments
which believe in protecting the local markets (Krull, 2010).
When a government starts protecting the local markets, it does
so by discouraging the international organizations. Because
MacDonald’s is an international organization, it is likely to be
affected by the move by the governments to protect the local
investors.
2. Commodity price increase
Markets are different in different countries. When the raw
materials of a specific nation where the company invests
increase, the company is exposed to high costs, and that affects
the business negatively (Krull, 2010).
Part III: Balanced Strategic Scorecard
a) Financial
Regarding finances, McDonald’s is listed as one of the
successful organizations. The success of an organization can be
seen it its net worth or the price of a share. The price of a share
at McDonald’s is $117 and that only means that the company is
doing well in the financial markets (Whitten, 2017). In 2017,
the shareholders earned $1.70 per share, and it is the same year
that the price of shares went to the highest level they have ever
been (Caplinger, 2016). The company collected $6.05 billion in
revenue (Whitten, 2017). Therefore, looking at the figures, it is
apparent that McDonald's has been making financial progress
and that means that its strategies are successful.
b) Customer (external stakeholder)
Looking at the number of the customers that McDonald’s serve
in a day, it is no doubt that the company is successful. In just

11. one day, McDonald’s serves more than 69 million customers in
its different outlets (Whitten, 2017). The number is huge, and
that only shows that the company has been able to convince
most of the customers to buy from the company. The
relationship between success and the number of customers
comes in because an organization has to have strategies which
attract customer and therefore if they work, then the company is
successful.
c) Learning and growth
Learning is a continuous process at McDonald’s. The reason
why the company has a menu which is different and unique
from other companies is because it promotes learning and
growth among the employees (Whitten, 2017). McDonald’s
provides the employees with all resources they need to grow.
The company is still opening outlets in different parts of the
world, and that shows that growth will never stop at
McDonald’s.
d) Internal process
The leadership at McDonald’s has made it easier for the
employees to showcase their talents. This has been made
possible through initiatives by the company to empower the
employees to come up with outstanding menu and recipes. The
culture at the company is friendly, and McDonald’s has only
been involved in a few issues. With this in mind, it is apparent
that the strategy of the company is successful.
References
Caplinger, D. (2016). How Much Is McDonald's Really Worth?
Retrieved from
https://www.fool.com/investing/2016/09/07/how-much-is-
mcdonalds-really
worth.aspx
Krull, R. (2010). McDonald's: Strengths, Weaknesses,

12. Opportunities, Threats. Retrieved from
https://www.fool.com/investing/general/2010/08/25/mcdonalds-
strengths-weaknesses
opportunities-threa.aspx
Meyer, P. (2017). McDonald’s Vision Statement & Mission
Statement Analysis. Retrieved
from http://panmore.com/mcdonalds-vision-statement-mission-
statement-analysis
Whitten, S. (2017). Bet on pricier burgers pays off, sending
McDonald's shares to all-time
high. Retrieved from
https://www.cnbc.com/2017/07/25/mcdonalds-earnings-q2
2017.html
Running head: STRATEGY 3
1
STRATEGY 3
14
Strategy 3
Student’s Name
Institution
Date
Executive summary
McDonald’s is one of the successful organizations in the world,
and that has been made possible by its strategy. The paper will
be looking at how McDonald’s has been able to stay relevant for
a long time without being overtaken by the competitors. The

13. paper will also be analyzing the strategies of the company and
how they have helped the company stay successful. The external
forces, which might affect the company, will also be looked
into. It is important to understand how an organization presents
its products and image to the customers and it is for this reason
that the paper will be looking into how McDonald’s presents
itself to the customers. To add on that, strategic issues which
the company is going through will be analyzed, and
recommendations of how to deal with the strategic issues will
be provided.
Table of contents
Introduction to
company…………………………………………………………….5
Value
proposition…………………………………………..………………
……….5
Set
up………………………………………………………………………
..5
Distinctive
products…………………………………………………………5
Pricing and
offering…………………………………………………………6
A broad range of
products………………….……………………………….6
Consistent
quality……………………………………………………………6

14. Fast and efficient
services……….……..……………………………………7
Market
position……………………………………….………………………
……..7
Geographic………………..…………………………………………7
Demographic…..…………..………………………………………..8
Behavioral…………………,……………………………………….8
Psychographic…….…………..…………………………………….8
Competitive advantage…………..……………….………………..8
External environmental scan/five forces
analysis…………….……………………9
Competitive
rivalry………………………….…….……………………….9
Threat of new
entrants………………………………..……………………9
Bargaining power of
suppliers….…………………….……………………9
Bargaining power of
buyers………..………………….…………………..9
1. Threats of
substitutes……………………………………….……………..10
Current
environment…………………………………………….…..………
…….10
Strategic
issues…………………………………………………..……………
…..10
Public Relation and
Reputation……………………..….…………………10

15. Food
safety…………………………….…………………………………..1
1
Complicated
menu…………….……………………….………………….11
High price of
burger………….………………………..………………….11
Losing customers to
competitors…………………………………………12
Operational
complexity…………………………………...………………12
The real estate
problem……………………………………………………12
Summary/key findings and
recommendations……………………………………12
References……………………………………………………………
……………14
Introduction to company
McDonald’s company was found in 1940 as just a restaurant
that served the people of San Bernardino, California. The
company was found by Ray Kroc. Today, the company is one of
the largest organizations in the food industry. The company
believes in delivering quality services and food to all its
customers. McDonald’s operates in one hundred and twenty
countries, serves at least sixty-eight million customers in a day,
has 36,899 restaurants in different parts of the world, and has
employed more than 375,000 employees. The company has been
able to reach such high levels of success because of its
strategies as well as experience in its line of work.
Value proposition
McDonald’s is an organization that does not say too much about
its products but rather presents them to the customers and
leaves the customers to judge (Barney, 2014). The company has
been able to attract more customers every day because of what

16. it presents in the market. The value proposition of McDonald’s
includes the following;
a) Set up
When it comes to hotels and restaurants, the setup of the
premises might attract more customers or repel more customers
(Barney, 2014). McDonald’s has designed seats which are
attractive and comfortable and that attracts customers who love
comfort.
b) Distinctive products
Customers are different, and there are those who would love to
try something new time after time. McDonald’s comes up with
distinct foods, which are not available in other restaurants. A
good example can be seen in the case of the Big Mac (Barney,
2014). Introduction of foods, which are not popular in the
market, puts the company ahead of its customers.
c) Pricing and offering
McDonald’s makes sure that customers are served in line with
their financial ability. Sometimes, the company introduces
attractive offers, which attract more customers to purchase
(Barney, 2014). The prices at McDonald’s are not exaggerated,
and that has played a significant role in attracting customers
who cannot afford to buy in some of the bigger restaurants.
When customers get products at a reasonable price, they are
likely to be loyal to the company because it has demonstrated
that it understands their needs and it is willing to meet the
needs as well.
d) A broad range of products

17. An older adult and a young person can enter into any
McDonald’s restaurant and have food of their choice (Barney,
2014). The reason behind it is because the company prepares a
wide variety of dishes and that makes sure that there are no
customers who are left behind. Accommodating all customers
helps in increasing profits and customer loyalty.
e) Consistent quality
When it comes to consistency in quality, McDonald’s is one of
the best organizations. The company has not opened its business
in some countries, and this is because the market in the
countries might affect the consistency of the company (Barney,
2014). A good example can be taken from the case of shelf life.
Food at McDonald’s cannot be allowed to stay on shelves more
than the stipulated time, and that means that the company does
not compromise on its quality.
f) Fast and efficient services
Services at McDonald’s are always fast. The company has
employees in place, which have been taught about the need to
make sure that customers do not wait for long (Barney, 2014).
The food industry is sensitive especially when it comes to
delivering services at the restaurant. The strategy to make sure
that services are fast has worked to the advantage of the
company, and it has increased the number of customers.
Market position
McDonald’s presents itself as an organization that serves people

18. from all walks of life. The market position at McDonald’s can
be divided into four different parts;
a) Geographic
McDonald’s operates in more than 120 countries, and that
makes the company an international company (Barney, 2014).
The company targets people from the rural and urban areas.
b) Demographic
McDonald’s targets people who are from the age of eight years
to the age of forty-five years. The company targets both males
and females (Barney, 2014). At the same time, the company also
targets people from all life cycle stages, and it does so by
presenting products, which suit people from different age
groups and social classes.
c) Behavioral
When it comes to the behavioral aspect, McDonald’s targets the
switchers, careless, time efficient, regular customers, potential
customers, and easy going (Barney, 2014). The company does
so by making sure that the quality of services is always at its
best.
d) Psychographic
McDonald’s targets lower class, working class, and middle
class. The company does so by working on the menu and the
products it presents to the market (Barney, 2014). At the same
time, the prices of its products play a significant role in this
aspect. In short, all consumers are covered at McDonald’s.
e) Competitive advantage
McDonald’s concentrates on two aspects to outshine the

19. competitors, and they are price and expansion. The company
sells its products at a reasonable price. Considering that
McDonald’s is a renowned brand, people would expect that the
company would sell its products at a higher price even though
that is not the case. When customers realize that such a famous
and classy company sells its products at a reasonable price, they
choose to buy from the company (Barney, 2014). When it comes
to expansion, McDonald’s is one of the organizations which are
almost everywhere. Therefore, the company has a bigger market
share compared to its customers, and that keeps it ahead of the
competitors.
External environmental scan/five forces analysis
2. Competitive rivalry
The food industry is very competitive. There are many
multinational organizations, which are venturing into the
markets, and there are local restaurants venturing into the same
market as well (Gregory, 2017). With this in mind, it is
apparent that rivalry is strong and McDonald’s is given no other
choice but to make sure that it holds its top position.
3. Threat of new entrants
The threat of new entrants in the market is weak. Establishing
global outlets needs a lot of capital, and there are many
organizations, which have tried but have failed (Dudovskiy,
2016). McDonald’s has its roots deep in the international
markets and taking the company out is a big challenge.
4. Bargaining power of suppliers
The bargaining power of suppliers is weak. McDonald’s buys
raw materials from different suppliers (Dudovskiy, 2016). The
company is well known, and there are many raw material
suppliers who would be willing to supply it if the current

20. suppliers choose not to supply for the company.
5. Bargaining power of buyers
The buyers have a strong influence when it comes to bargaining.
The company has different restaurants in the world; therefore,
customers can protest against the prices of the products and that
might influence the company to reduce its prices (Dudovskiy,
2016). Considering that the company has no middlemen, it is
directly affected by the reactions of the customers.
6. Threats of substitutes
McDonald’s faces the threat of substitute meals from homes and
other restaurants like KFC, Chicken Inn, and Pizza Inn
(Dudovskiy, 2016). Switching to these products can be dictated
by numerous aspects and cost might not be one of them.
Sometimes people might just opt to eat at home. With this in
mind, the threat of substitutes is strong.
Current environment
Currently, McDonald’s is doing well in the market, and it has
clinched to the top position in the food industry. The company
has been facing stiff competition from other local and
international organizations, but it has managed to maintain the
lead (Dudovskiy, 2016). Expansion to other nations is still one
of its strategies, and the company has invested in research to
identify the good markets that it has not yet explored.
Strategic issues
1. Public Relation and Reputation
A company cannot be alienated from its reputation because its

21. actions affect its reputation. McDonald’s is facing an internal
problem where the staff complains to be underpaid. Considering
that the organization has been doing well in global markets, it is
unexpected to hear that the customers are complaining about
payments (Monaghan, 2015). Having a good payment structure
goes a long way in making sure that an organization does not
enter into disagreements with the employees.
2. Food safety
In China, McDonald’s faced an issue with the safety of food. In
China, McDonald’s was accused of falsifying the expiry date of
meat and supplying meat that is already rotten. Such scandals
have an effect not only on the outlets in China but also in all
outlets (Monaghan, 2015). Food is sensitive and supplying food
that is already rotten is an issue that must be addressed with all
seriousness and urgency.
3. Complicated menu
The issue of the complicated menu is not new to customers of
McDonald's. However, the problem is affecting the customers.
Choosing what to eat should not be made a challenge (Sharma,
2015). The menu at McDonald’s is complicated, and this affects
customers who seek the services of the restaurants for the first
time. A simple menu, which is straightforward, is likely to work
to the advantage of the company because it makes the decision-
making process of the customers easier.
4. High price of burger
Though McDonald’s is known for its fair and lower prices, the
company has not done enough to make sure that burger
customers are taken good care of (Sharma, 2015). The company

22. is losing some of the burger customers. Considering that some
customers buy a burger, another product, losing burger
customers affects the company, and that might lead to an
increased number of customers who are leaving McDonald’s.
5. Losing customers to competitors
McDonald’s is losing its customers to the competitors. The
company needs to go back to the drawing board and identify
some of the reasons, which are forcing its customers out
(Sharma, 2015). It is the responsibility of the management to
come up with a strategy that makes sure that customers do not
seek the services of the competitors.
6. Operational complexity
The issue of operational complexity has been carried forward
from one year to another. Customers need to seek the services
of an organization that is not complicated and hard to deal with
(Sharma, 2015). McDonald’s has complicated services and
operations, which could be made simpler to meet the
expectations of the customers.
7. The real estate problem
McDonald’s has chosen to invest in the real estate business. The
real estates and the McDonald’s restaurants operate as one
entity, and some of the shareholders in the real estate have been
pushing the company to run the real estate business as a
separate entity (Sharma, 2015). The reason for stating so is
associated with the fact that the real estate business is doing
well but some restaurants are not performing well, and that
means that the capital from the real estate is used to boost the
under-performing restaurants.

23. Summary/key findings and recommendations
It is no doubt that McDonald’s has done a recommendable job
by staying on top of the list of the global organizations
performing well. However, the company must take some
measures. The first measure is cleaning its house. The issues of
rotten meat and low paid employees are a shame to a big
organization like McDonald’s. The company must have an
internal team in place, which is aimed at making sure that sanity
at the organizational level is maintained. The team should also
look into matters of complexity. There is no need to complicate
operations and menu while something can be done about it.
Making operations simple and reducing, the side of burger
would go a long way in attracting more customers. In addition,
the company should separate real estate and restaurants
businesses and let each entity be independent. Doing so will
make sure that the activist does not have something to complain
about and it will give each entity an opportunity to grow.
References
Barney, J. B. (2014). Gaining and sustaining competitive
advantage. New York: Pearson
Higher Ed.
Dudovskiy, J. (2016). McDonalds Porter’s Five Forces
Analysis. Retrieved from
https://research-methodology.net/mcdonalds-porters-five-
forces-analysis/
Gregory, L. (2017). McDonald’s Five Forces Analysis (Porter’s
Model). Retrieved From
http://panmore.com/mcdonalds-five-forces-analysis-porters-
model
Monaghan, A. (2015). The 7 Biggest Challenges Facing the New

24. McDonald's CEO.
Retrieved from http://www.businessinsider.com/the-7-biggest-
challenges-facing-the
new-McDonalds-CEO-2015-1?IR=T
Sharma, R. (2015). 3 Big Problems Facing McDonald’s New
Change Agent. Retrieved from
https://www.cheatsheet.com/business/3-big-problems-facing-
mcdonalds-new-change
agent.html/?a=viewall.
Running head: EXTERNAL ENVIRONMENTAL SCAN
1
EXTERNAL ENVIRONMENTAL SCAN
2
External environmental scan of McDonald’s
Student’s name
Course number
Instructor’s name
Date
External environmental scan of McDonald’s
Introduction
McDonald's Corporation is the world biggest chain of fast food
eating place and franchises system in the globally. The
organization was found or established in 1940 east of Pasadena,
California by two brothers Richard and Maurice McDonald.

25. Presently the organization has 35,000 braches across the world
in 125 countries with an estimated daily customer of 69 million.
In the year 2013 the organization recorded an operating income
of approximately US$ 9 billion which is a clear indication of
the success since the establishment in 1940. Due tot hat fact
that its the biggest food chain across the globe its gets affected
by all the external factors such as political situation in the
countries, economical circumstance, local competition, buyer
behavior, legal rules and regulation across the nations and
societal factors.
The organization faces two major external factors including the
substitution of new products that are healthier as compared to
fast food and the entrant of new competitors in the market. This
essay does the study of these external aspects that are affecting
or can affect the McDonald in a constructive or unconstructive
manner. The paper also comprises five force examination of
fast food analysis to cover all features of external factors
impacting this commerce.
Porter's Five Forces Analysis
Porter's five force analysis is a type of structure that is utilized
by the organization to determine the competition levels in the
market and provided vital information that will be used to
developed strategies that leads to competitive advantages
(Burks, 2015). This analysis provide the evaluation or
information that can be used by new entrant or existing
organization as the negative and positive market current and
future conditions are exploited. Higher competition levels are
presented in the industry of fast food.
Threat of New entrant - At the present time there is no much
competition due to new entrant in the market that can have the
significant effects to McDonald as they have already established
brand name in the market. Due to that fact that McDonald has
invested more on their employees and the products hence
providing acceptable standards in the market there has been a
barrier blocking some of the new small entrant to the market.
Creating a good image and provision of better services to the

26. client is one of the main aspects to consider in the food industry
to win the customer loyalty.
The existing major competitors of McDonald are Burger King
and KFC. However individuals are having high preference to
McDonald products as they are high quality and within the
affordable prices. So at this time for McDonald there is no new
admission threat for McDonalds in the fast food market. The
existing competitor and the small entrant are trying to other
product differentiation to the customer but this strategy is also
embraces by McDonald to the diverse branches across the globe.
Threat of Substitute Products or Services – The availability of
healthier food substitutes in the market has been a major threat
to McDonald as new organization are providing more healthy
products at an affordable cost. But in the fast food industry the
main criteria that are used to choose the most effectual product
from the customer point of view are the time of preparation,
conveniences in eating or take away and the health benefits to
some extent. In order to achieve this, McDonald is frequently
introducing new products that are differentiated, high end
services and have some healthy aspects to the customer in order
to ensure that they remain competitive and maintain the
customer loyalty. According to Mourdoukoutas (2012)
McDonald’s in the past few years has constantly expand and
developed its product portfolio by offering high quality coffee
and healthy drinks.
McDonald ensure the faster and good service to their client
which facilitate the customers to stick to their products in the
menu including McDonalds Burgers, Beverages, dairy products
and many more which comes at an affordable prices.
Bargaining Power of Customers (buyers) - in any given industry
it’s within the supply ability to choose the competitor that they
wish to purchase from in the market. Within the fast food
industry there is room for differentiation of the products but not
to bigger extent therefore most of the products are almost the
same. This competitors organization control the pricing

27. mechanisms in the market hence this limits the bargaining
power of the client. Therefore, there is a very low bargaining
influence of buyers in the industry.
Bargaining power of Suppliers - Due to that fact there are
dominance of not many suppliers in the fast food industry there
is high bargaining power by the suppliers. For instance like soft
drinks are dominated ands supplied by coca cola and PepsiCo
which provide them with high bargaining power in the market.
This industry is directly depended on the providers as they are
responsible to provide the necessary products or gears for the
fast food companies.
Intensity of Competitive/Industry Rivalry - The fast food
industry is highly competitive market with various competitors
that are developing strategies to ensure that hey provide high
quality services, innovation and affordable prices to the
customers. Brands like McDonald, KFC and Burger king are
unswerving competitors (McDonald & Wilson, 2016). The
geographical settings, advertising and branding of the
organization also provides some pointers to the competitors in
the market. Even though McDonald is far ahead of other two
major competitors but along with these two McDonald also has
to face the local completion across all countries. Cost
competition is the main completion category in the industry.
Consequently, McDonalds ought to progress strategies and be
aware of client taste and preferences to compete with this
gigantic restaurant industry.
Key Factors and Trends in any other areas affecting your
industry (PESTEL)
Economic condition of the countries that the organization
operates affects the general operational functions of the
organization like increase or decrease of customer purchasing
power, interest rates of finances among others. The social
setting in the countries across the globe provides McDonald
with a better environment to attract the large customer based via
strategic social joints developments. The use of technology in

28. improvement of customer service like Wi-Fi enabled fast food
restaurant, online order and delivery service, online payment
options, new equipment for quick and effective food
preparations are the major other factors that are affecting this
industry. The government regulation and other legal provision
among the diverse nation also posses some threats to the
organization operations. Political condition of the countries
especially in African nations affects the operation of majority of
the McDonald braches.
External Factors as either Opportunities or Threats
Some of the external factors that affect McDonald operations
positively by providing adequate opportunities are advancing
technological incorporation, changing customer needs, new
geographical location diversity, high end services and healthier
development of products (Barra, 2012). The use of technology
platform like social media in advertisement and provision of
orders will provide the effective online operation that can boost
the organization productivity.
Some of the threats that affect the organization include the
introduction or people shifting to products that are healthier and
affordable in the market. On the other hand the unstable
economic condition and political status in the diverse
geographical location affects the operations significantly.
References
Barra, D. (2012, May 19). How does McDonald’s use
technology development to lower cost of production? Retrieved
from
https://economicsofmcdonalds.wordpress.com/2012/05/19/how-
does-mcdonalds-use-technology-development-to-lower-cost-of-
production/
Burks, F. (2015). Types of Economic Factors That Can Affect
the Fast Food Industry. Retrieved from
http://smallbusiness.chron.com/types-economic-factors-can-
affect-fast-food-industry-36923.html

29. McDonald, M., & Wilson, H. (2016). Marketing Plans: How to
prepare them, how to profit from them. John Wiley & Sons.
Mourdoukoutas, P. (2012, April 20). McDonald's Winning
Strategy, At Home And Abroad. Retrieved from
http://www.forbes.com/sites/panosmourdoukoutas/2012/04/20/m
cdonalds-winning-strategy-at-home-and-abroad/
In this assignment, integrate all the pieces of work you have
drafted and formally turn it into the capstone strategy audit.
In previous assignments, you performed multiple, specified
analyses of your company (or any company of your choosing).
Those individual analyses provide the needed research to
successfully complete the following LASA.
Part I: Strategy Audit Report
Using the tools and framework throughout the program, prepare
a 15-page strategy audit of your company with a companion
presentation.
The strategy audit is a comprehensive analysis of the company’s

30. business strategy and operating performance, and culminates in
a series of recommendations for improving your company’s
performance based on the findings and conclusions of your
analysis.
A strategy audit involves assessing the actual direction of a
business and comparing that course to the direction required to
succeed in a changing environment. A company's actual
direction is the sum of what it does and does not do, how well
the organization is internally aligned to support the strategy,
and how viable the strategy is when compared to the external
market, competitors, and financial realities. These two
categories, the internal assessment and the external or
environmental assessment, make up the major elements of a
strategy audit.
In your strategy audit:
· Provide a high-level analysis of the company’s business
strategy and operating performance. Be sure to complete the
following:
· Analysis of the company value proposition, market position,
and competitive advantage
· External environmental scan/five forces analysis
· Internal environmental scan/organizational assessment
· SWOT Analysis
· Balanced scorecard/strategy scorecard
· Recommend specific tactics for improving your company’s
strategic alignment and operating performance.

31. · Recommendations can include but are not limited to tactics in
marketing, branding, alliances, mergers/acquisitions,
integration, product development, diversification or divestiture
and globalization (if you recommend your company go global,
you must include a supply chain analysis and an analysis of
your firm’s global capabilities).
· Explain how the recommendations will help the company
achieve its strategy and vision.
You are to write this report as though you are a consultant to
your company, and are addressing the executive officers of this
company. You will collect and analyze a large amount of data in
producing your report, but your final product will be condensed
and focus on presenting your analysis findings and conclusions.
Your report should consist of the following sections in the
given order.
1. Executive summary (1 page): A concise and insightful
summary of the significant findings of your analysis and the
recommendations you have for your executive team.
2. Strategic issues and recommendations (5 pages): Identify 5–7
most important strategic issues facing your business unit.
Strategic issues arise from a mismatch between internal
capabilities and external trends such that important
opportunities are not being pursued or significant external
threats are not being addressed under the current strategy.
The strategic issues list should integrate your SWOT analysis,
your Five Forces analysis, and the organizational assessment
and external environmental scan completed earlier during the
course. These detailed analyses are the foundation for your final
set of findings and recommendations presented to the executive
team.

32. In developing your recommendations for addressing each
strategic issue, consider misalignments that might be apparent
in different operating areas:
i. Product portfolio: Are there changes to the target market
segment, value proposition, or positioning of the product or
service line needed?
ii. Structure: Are the organizational roles and responsibilities,
decision-making authority, skill requirements, and work
assignments properly configured and aligned to support the
strategy?
iii. Organizational culture or behavior: Does the organizational
culture inspire behaviors that support the strategy? Are the
mission, vision, and values clearly articulated and aligned with
the strategy? What new behaviors are needed?
iv. Value chain activities: Does the organization value chain
fully align with the strategy? Are their activities that should be
added, eliminated, or modified significantly?
v. Performance measures: Do the organization’s performance
measures focus on the key drivers of strategic success? Is there
a strategy scorecard that ties the main elements of the strategy
to specific operating capabilities, including goals and key
performance indicators (KPIs) that give an indication of
incremental or predictive progress toward reaching strategic
goals?
Your recommendations should fall into these general categories,
but should be specific in terms of scope and expected impact.
These sections have been completed earlier in the course, and
should appear as appendices:

33. 3. SWOT analysis (2 pages—completed in Strategy 4): SWOT
matrix illustrating strengths, weaknesses, opportunities, and
threats.
4. Balanced strategy scorecard (4 pages—completed in Strategy
4): Develop a Balanced Scorecard for your business unit that
reflects the key drivers for your business strategy.
5. Organizational assessment (3 pages—completed in Strategy
3)
6. External environmental scan and five-forces analysis (3 pages
completed in Strategy 2)
7. Market position analysis (3 pages—completed in Strategy 1)
Use information from your previous assignments to support
your conclusions and recommendations and conduct additional
research when needed. Make sure you properly reference and
cite so that the location of information is clear.
Submit your 15-page report in Word format. Apply APA
standards to citation of sources. .
Part II: Companion Presentation
Finalize the companion with a 10-slide Power Point
Presentation that summarizes the audit and recommendations in
a compelling manner that persuades senior management to
explore and possibly implement your recommendations. The
elements of the presentation should include the following:
· Title
· Agenda
· Summary of audit
· Recommendations

34. · Key measurements
· Risks and benefits
· Call to action
· Next steps
Submit your 15-page report in Word format. Apply APA
standards to citation of sources. .
Finalize the companion with a 10-slide Power Point
Presentation that summarizes the audit and recommendations
Due Friday 03/09