Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

i am working on my strategy formulation draft on mcdonalds below is my matrices EFE Matrix The mechanism approach of External Factor Analysis (EFE) is

  • i am working on my strategy formulation draft on mcdonalds below is my matrices

EFE Matrix

The mechanism approach of External Factor Analysis (EFE) is mainly used in corporate management to assess business dynamics. The EFE matrix is a valuable tool for imagining and measuring the challenges and prospects that a business face. The EFE Matrix is a type of analytical tool equivalent to a SWOT analysis. According to Porter, Companies should keep a close watch on their rivals in general. He also urged them to look past their rivals' behavior to see if other forces could be affecting the market climate.

Key external factors

Opportunities

weight

rating

Weighted score

People are being forced to sell down i.e., to select less expensive alternatives due to the economy.

0.15

3

0.45

Children's demand for nutritious choices: Happy Meal themes

0.05

3

0.15

Competitors (Wendy) lack of options like McCaf

0.15

4

0.60

57% McDonald's outside the USA and company losses in USA

0.7

2

0.14

Expand in USA and around the world

0.9

3

0.27

Brand loyalty and repeat buyers are influenced by economics and competitors.

0.5

2

0.10

demand for free Wi-Fi and the costs charged by competitors.

0.9

3

0.27

more 'natural' menu options.

0.9

3

0.27

Subtotal

2.25

Threats

weight

rating

Weighted score

Healthy eating necessitates a reduction in revenue

0.6

3

0.18

The media's emphasis on fast food and its negative consequences.

0.4

2

0.8

Price wars

0.3

2

0.6

Unemployment in the United States

0.3

2

0.6

Costs are on the rise

0.3

2

0.6

Calorie counts and nutritional benefit

0.9

3

0.18

1.00

Subtotal

2.97

Porter's 5 Forces analysis

Porter's Five Forces Analysismodel is useful for strategic management, particularly when it comes to solving problems in the business's external climate. The influences are mostly inside the fast-food restaurant market, according to McDonald's. As the world's largest restaurant chain, the organisation is a model of successful strategic management, especially in dealing with competition in various markets around the world. McDonald's is subjected to the influence of global influences of differing degrees, depending on consumer differences across the world. The economic situation in the United States, for example, is distinct from that in Europe. The corporation must develop plans to deal with these external influences and mitigate their negative consequences.

Rivalry among competing firms - Strong power

Potential entry of new competitors - Moderate Power

Potential development of substitute products - Strong Power

Bargaining power of suppliers - Weak Power

Bargaining power of consumers - Strong Power

IFE Matrix

The Internal Factor Analysis (IFE) Framework is a scientific method for determining a company's internal environment and demonstrating its advantages and disadvantages. An internal factor analysis looks at the company's internal environment to see its capabilities, competencies, and competitive advantages. You will classify the organization's strengths and weaknesses by conducting an internal review. This information then assists management in making strategic decisions as they carry out the plan development and implementation process. In addition, depending on the structure of the firm, the IFE may be used as a strategy instrument for internal assessments of different company fields of activity, such as financing, IT, communications, accounts, processes, and human resources, among others (Jurevicius, 2014).

Strenghts weight rating weighted score strong image, repuatation and brand name 0.12 4 0.48 large market share 0.1 4 0.4 strong global presence 0.04 3 0.12 trianing for managers known as the hamburger university 0.04 3 0.12 mcdonalds plan to win on people, products, place, price and promotion 0.12 4 0.48 strong financial performance and position 0.08 4 0.32 introduction of new products 0.06 4 0.32 customer focus 0.06 4 0.32 strong performance in the global marketplace 0.08 4 0.32 Weaknesses unhealthy food image 0.08 1 0.08 staff turnover including top management 0.04 1 0.4 customer losses due to fierce competition 0.04 1 0.04 legal actions related to health issues: use of trans fat and beef oil 0.04 1 0.08 total 1 3.16 Strenghts weight rating weighted score

strong image, repuatation and brand name 0.12 4 0.48

large market share 0.1 4 0.4

strong global presence 0.04 3 0.12

trianing for managers known as the hamburger university 0.04 3 0.12

mcdonalds plan to win on people, products, place, price and promotion 0.12 4 0.48

strong financial performance and position 0.08 4 0.32

introduction of new products 0.06 4 0.32

customer focus 0.06 4 0.32

strong performance in the global marketplace 0.08 4 0.32

Weaknesses

unhealthy food image 0.08 1 0.08

staff turnover including top management 0.04 1 0.4

customer losses due to fierce competition 0.04 1 0.04

legal actions related to health issues: use of trans fat and beef oil 0.04 1 0.08

total 1 3.16

SWOT Matrix

SWOT analysis is a method for analyzing these four business facets since it exposes strengths, threats, rewards, and weaknesses. SWOT analysis is a method for evaluating a company's success, competition, risk, and potential, as well as parts of a company like a product line or division, a market, or another organization. Using both internal and external data, the technique will guide companies into more effective strategies and away from those that have been or are likely to be less successful. They may also get advice from independent SWOT analysts, investors, or competitors on whether an organization, product line, or industry is strong or poor, and why.

Strengths of McDonald's

The company's strengths are its market-focused strategy and broad range of product growth. That is the single most crucial factor leading to the company's growth and positioning them as an industry leader. McDonald's SWOT Analysis strengths are as follows:

Its name is recognised in more than 120 countries around the world. After subway, it is the most recognised brand in the industry.

It offers a diverse range of products, including burgers, smoothies, shakes, ice cream, and snacks, which differ by location.

Regardless of whether you are dining in America or Europe, the flavour of the food would be the same.

One of the world's biggest fast-food stores.

McDonald's revenue is distributed through 120 countries. That does not imply that they can depend solely on one source of income.

Weakness of McDonald's

McDonald's vulnerability stems from internal competitive considerations as well as industry rivalry. They will be dealt with if the business takes a comprehensive approach to them. McDonald's SWOT Analysis strengths are as follows:

McDonald's products have received critical press because they are fast food with a high fat, carbohydrate, salt, and sugar content. As a result, there is an obesity epidemic in teenagers.

The burger outlet market in the United States is almost saturated. As a result, McDonald's would consider exporting its goods to other nations, which presents cultural and economic problems.

Since the pace of dividend growth has slowed, there is a chance that buyers will abandon McDonald's.

Opportunities of McDonald's

McDonalds has a plethora of business opportunities that it can take advantage of in order to achieve long-term growth. The below are McDonald's SWOT Analysis opportunities:

McDonald's has the potential to expand internationally.

Will begin offering luxury goods at any of its franchise locations to see whether there is a shift in consumer demand.

Will begin to build the supply chain for similar goods on the market in order to extract sales from other segments.

It is possible to begin marketing goods that provide consumers with health benefits.

There is a lot of interest in creating a customer-centric strategy to increase the brand's value proposition.

Concentrate on ways to invest in developing countries.

Using corporate social responsibility and environmental stewardship to gain a comparative edge in attracting consumers.

In the caffeinated drinks market, the company has the potential to grow further and become a direct rival to Starbucks.

Propose a partnership with retailers to sell the franchise in their stores.

Threats of McDonald's

The industry is very competitive, the market is more saturated, and the strength of competition is strong.

The group would negotiate with industry giants such as Starbucks and Subway in emerging product categories.

Customers today are more environmentally conscious, and they gravitate toward nutritious goods.

Since McDonald's generates the majority of the sales in the United States, there could be a trickle-down impact of revenue during the crisis.

BCG Matrix

The need for a plan to grow its current offering in a very promising McDonald's market is extremely important. The Americas and beyond is dominated by McDonalds and other big fast-food chains. In 119 nations, McDonalds has served 47 million customers every day and has been the leading fast food supply chain in restaurants since 1940. McDonalds serves many fast foods, including sandwiches, chicken, salads, chips and ice cream. ice cream. McDonalds use the BCG matrix to assess the company's present status and recognize the company's fast-food success.

STAR: We have found that McDonalds Mc Flurry is the company's star commodity, due to its strong market share and the greatest growth rate in the market. With high investment in commercialization, promotion and advertising of the product, the corporation makes money in this specific product. In order to turn the commodity into cash cow, the company can spend more money in this product.

Cash Cow: Wecananalyse thatMcDonalds Mc Chicken, Fish-o-Fillet burgers and Fries are the corporate cash cow, since the enterprise benefits from this commodity to the fullest but consumes less cash in its commercialization and in other areas of the business. This product has already shown demand growth such that the company may not have to spend too much capital, but that the company must be alerted if the cash cow product loses its appeal.

Dog: McDonalds Coffee is the company's dog food with a lower relative demand and a lower rate of market growth. This product is essentially the brand's appealing product, since the company does not spend too much capital to sell its market share. The company only hopes to make this product a star if it cannot do so it would shelter this product off the product's life cycle and liquidate it on the market.

Question mark: McDonald's Ice Cream Cone has a minimum market share and a high market growth rate. The result is a breakneck commodity of the business. We can conclude that, as we understand this argument, this product is good for the consumer, so that it does not make that lot of sales. But once the business starts invested more money in this particular product, we will be able to turn it into a star product.

  • i need answer according to below objective
  • Strategic direction choice and rationalization: choose one (or two) of the strategic directions as defined in Chapter 5 that you feel will be best for your organization to pursue in the coming 3 years, and develop a rationalization for this choice. Ensure that the choice is driven by the matrices developed above.

chapter 5 business strategy

market development

product development

market penetration you can choose from these strategy please references.......

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business and Administrative Communication

Authors: Kitty o. locker, Donna s. kienzler

10th edition

77830105, 978-0077830106, 978-0073403182

More Books

Students also viewed these General Management questions