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Unit 3 Organisations and Behaviour Assignment Solution- McDonald
Diploma in Business
Unit Number and Title
Unit 3 Organisations and Behaviour Assignment Solution - McDonald
LO1: Process of Strategic Planning
1.1 Explain strategic contexts and terminology-missions, visions, objectives, goals, core competencies
Definition - Mission is the short term strategic goal which the company intends to achieving few coming years.The Mission statement defines the purpose of the organization as well as most important goals. Mission is meant for internal stakeholders which defines the key measures of the success of the organizational behavior.
Corporate statement - McDonald's mission is to be our customers' favorite place and way to eat with inspired people who delight each customer with unmatched quality, service, cleanliness and value every time . We invite you to be the part of this winning team and give yourself an opportunity to grow with the family of people striving to create smiles on the faces of millions of people everyday (http://www.mcdonalds.com.html).
Definition- Vision is the long term goal which the company sets for itself in terms of the organization's values.
Corporate statement - McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.
Definition - Organizational objective is the short terms goals which are communicated strictly to the internal stakeholders of the company.
Corporate statement - McDonald's main aims are to serve good food in a friendly and fun environment, to be a socially responsible company, and to provide good returns to its shareholders.
Definition - Goals are the subset of objective in which the short terms objectives are broken down in smaller goals.
Corporate statement - The company aims to provide its customers with food of a high standard, quick service and value for money.
Definition - The core competencies of any company are two or three specific fields which are strengths of the company and the company can do better than the rival companies.
Corporate statement - Serving quality food that our customers can trust is McDonald's number one priority. But McDonald's is about more than just the number of restaurants we operate. It's about our suppliers, franchisees and employees working together. It's about the investment we are making together in our restaurants
1.2 Review the issues involved in strategic planning
Strategic planning can be defined as the process through which the organizations can define the strategy of it as well as the directions which it wants to pursue. The process of strategic planning also takes care of making various decisions with respect to the allocation of the internal resources of the company with the intention of pursuing the decided strategy (Edström, 2007).
There are a number of problems which are faced by the companies at the time of strategic planning. McDonalds is also not an exception, The problems which are faced by the companyat the time of strategic planning are as following:
- In a huge organization such as McDonalds a significant number of people are involved in the strategic planning process and development. As a result of this the process sometimes lacks clear accountability for specific persons.
- Scale of Operation of the company: As we have already discussed, the company is present in a vast number of companies and as a result of it is very difficult for the company to decide on a particular plan which can accommodate the variation in the socio eco cultural background of the various customers in different nations. It is also difficult to take care of the various business environments in various nations in a single strategic plan.
- Strategic planning and the implementation of it require a certain level of involvement of internal resources including time and money. In view of the fact that these resources are hard to implement in a competitive company like McDonalds, this can lead to serious pitfall for this planning.
1.3 Explain different planning techniques
The planning techniques which can be implemented in McDonalds are BCG Matrix and Stakeholder Analysis. The BCG matrix or the growth share matrix is highly relevant for the company since it is present in a number of countries. This matrix defines the relative position or the market share of the company with respect to business growth potential. Since the strategic position of the company is not similar in all the countries of its operation, McDonalds can utilize this model to understand the markets in which it should be stopping the operational activities due to low or negative profit.
As far as the stakeholder analysis is concerned, it is a technique which can be utilized for identification of the most talented and important people in the organization who need to be prepared for the higher management roles in coming years. In view of the fact that the company is a huge one the number of employees in the company is also as high as 440,000 the company needs to have this strategic approach for identifying the important resources. This can also help the company in the long run with a better group of managers and employees.
LO2: Be able to formulate a new strategy
2.1 Produce an organisational audit for a given organization
Name of company -
McDonald’s is the largest fast-food chain in terms of world sales, bringing in around 8% of total fast-food sales.
McDonald’s is currently present in as much as 119 countries in the world and serves a huge 68 million customers on a daily basis
The brand of the company is one of the most highly coveted in the global basis
The company with its pricing can act as the preferred option for the people belonging to various socio economic classes
A number of new developing economies in the Asian continent can act as the new markets for the company which will act as the opportunity for the company.
The company can also extend the product range and thus catering to a larger base of customers. The company has been able to introduce coffee and smoothies under the McCafe brand. With the introduction of various new menu items the company can tap markets which were previously untapped.
The health as well as environment related controversies due to which the company has been facing constant negative press, can cost potential customers for the McDonald’s.
As far as the developed nations are concerned the market for fast food companies already suffer from sever competition as there are a number of successful companies in this segment.
Due to the size of the company it is difficult for McDonald’s to achieve double digit growth in the markets.
Pestel analysis for McDonalds
Company example i.e. how your organisation is affected by this factor
Political factors indicate the extent to which the government of the nation interferes with the business as well as the economy of the country. This factor includes labor law, tax policy, environmental law, tariffs, trade restrictions, and political stability.
McDonalds is not very affected through this factor.
This factor includes growth of the economy, rates of interest, inflation rate and the exchange rates. These factors can hugely impact the way the businesses operate in a particular country apart from making decisions.
Since the pricing of the company is a moderate one, it is benefitted through this reason.
This factor includes various aspects of the cultural background of the region as well as the consciousness regarding health, growth rate of the population, age and gender distribution, attitudes towards career and emphasis on safety.
In view of the fact that this factor includes consciousness regarding health of the customers, it is a very important aspect for the company.
Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change.
Since the fast food industry is one of the major differentiator in the fast food industry due to the presence on internet as well as the supply chain facilities, the effect of this factor on the chosen company is quite high.
This factor includes ecological and environmental aspects. These aspects include climate, weather and the changes in it which particularly affects farming, tourism, and insurance industry.
McDonalds have been facing a lot of difficulties due to the waste production which is being done by the company.
This factor includes consumer law, discrimination law, antitrust law, health and safety law as well as employment law. It is possible for this factor to affect operation of the company as well as the costs and the demand for the company.
As a company in fast food industry, there are many legal requirements that McDonald should achieve in different countries, such as the labor and employment law, company law and tax requirement.
2.3 Explain the significance of stakeholder analysis
Stakeholders can be defined as the people or entities which may have direct or indirect interest in the company or the projects of the company. The primary stakeholders for the company include the employees, investors, consumers, as well as suppliers. However, as per the modern theories which go beyond the traditional definition of stakeholders include additional stakeholders such as the government, community, as well as trade associations.
As far as the stakeholder analysis is concerned, it is a technique which can be utilized for identification of the most talented and important people in the organization who need to be prepared for the higher management roles in coming years. In view of the fact that the company is a huge one the number of employees in the company is also as high as 440,000 the company needs to have this strategic approach for identifying the important resources. This can also help the company in the long run with a better group of managers and employees. Following are the benefits of this analysis:
- This can be used to gather the opinions of the most powerful stakeholders for shaping the projects of the company at an early stage.
- Through this the company can expect the reaction of the people towards the project may be, and build into your plan the actions that will win people's support.
LO3: Understand Approaches to Strategy, Evaluation & Selection
3.1 Analyse possible alternative strategies relating to substantive growth, limited growth or retrenchment
As we have already identified in the previous sections of this report, McDonalds is a multinational company which is present in a huge number of nations in the world. Due to this factor the company faces different business scenarios in different countries and it is of utmost importance that the company creates new strategies as well as alters the existing ones with the intention of increasing the profitability as well as the sustainability of the company. In this section we are going to look into 4 such scenarios or strategies which may be implemented by the company (Egelhoff, 2004).
Market Entry: It is possible for the company to expand the business by entering into the markets early where the market is not yet saturated. Bangladesh in South Asia is one such country. With a franchisee model the company can enter into the market which possesses less risk for the company.
Sustainable Growth Strategy:This can be used for the saturated markets where the company needs to diversify to attract a new base of customers. Since the company is already into the business of restaurant, it can get into the business of opening cafes and ready to eat food joints.
Limited Growth Strategy: This can be used for the markets where the company is already present but is not fully saturated. An example for this is China where the company has not been able to fully utilize the market. With a market penetration strategy with high visibility campaigns can help this scenario.
Retrenchment:If in this case, in some country is not being able to make any profit or is making negative profit, the company needs to sell the liquid assets in the country and stop operating.
3.2 Select an appropriate future strategy for a given organization
In view of the fact that the company is present in various countries, it can implement different strategies for different markets. The strategy and the market that has been chosen for this section is the market entry strategy for which Bangladesh has been chosen as thecountry in which the company will enter and expand.
The model which can be used is the franchisee model, which has been used by a number of similar companies in the past in this part of the world. Dominos as well as Pizza Hut which are in the same industry as McDonalds operate through this model in this part of the world and they have been successful in these countries with this model. Hence the chance is higher that McDonalds will also get benefits out of this model.
This model is beneficial for both the parties. These include: higher possibility of success; preliminary trainings as well as continuing support; less time taken for starting the operation; assistance in finding an optimal site; national and regional advertising campaigns etc.
However there are some serious disadvantages for this model as well. These include: less independence for the company; mandatory company-wide promotions that may not work in their market (price cuts, new products or services), yet cost money to implement etc.
In spite of all of these factors it can be suggested that McDonalds use the franchising model which can help the company in the long run. In view of the fact that the market is new this will also keep the risk at minimum level for the company.