Assurance of Learning Exercise 1a

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Assurance of Learning Exercise 1A, Step 4
Using the Cohesion Case, the www.finance.yahoo information, the 2009 Annual Report, and the Industry Survey document, on a separate sheet of paper list what you consider to be MCD’s three major strengths, three major weaknesses, three major opportunities, and three major threats. Each factor listed for this exercise must include a %, #, $, or ratio to reveal some quantified fact or trend. These factors provide the underlying basis for a strategic plan because a firm strives to take advantage of strengths, improve weaknesses, avoid threats, and capitalize on opportunities.

Strengths:
S1: Highly successful and recognized advertising (I’m loving it) S2: Strongest Brand Image as the number-1 fast-food company by sales, with more than 32,478 restaurants in 117 countries. S3: Consistently solid financial performance.

* Gross margins (36.7%) and net profit margins (18.2%) above industry averages. * Sales revenue up 3.8% in 2009, global comparable sales up 6.9%. * Net income up 9% from 2008.

Weakness:
W1: 80% of restaurants are franchise owned, placing image and reputation in other’s hands. W2: Core product line out of sync with trends toward healthier lifestyles for adults and children. W3: Struggles with fluctuations in operating and net profits: * Operating profits $4,433M (2006), $3,879M (2007), $6443M (2008). * Net profits $3,544M (2006), $2,395M (2007), $4,313M (2008).

Opportunities:
O1: Low fat, low calorie, healthy hamburger – Could be first on market. O2: Increased beverage options (Gourmet coffees) have been shown to increase customer visits in Europe (+7.2%) and takes advantage of faltering Starbuck’s. O3: Joint ventures with retailers (Walmart, etc.) can place new locations in high traffic areas at lower capital cost.

Threats:
T1: More health conscious customers.
T2: Intense price pressure from competitors like Burger King, Taco Bell, Wendy’s, KFC and any mid-range sit-down restaurants. T3: Global economic recession causing consumers to spend less

Assurance of Learning Exercise 1B

The Ethics of Spying on Competitors

Purpose
This exercise gives you an opportunity to discuss in class ethical and legal issues related to methods being used by many companies to spy on competing firms. Gathering and using information about competitors is an area of strategic management that Japanese firms do more proficiently than American firms.

Instructions
On a separate sheet of paper, number from 1 to 18. For the 18 spying activities listed as follows, indicate whether or not you believe the activity is ethical or unethical and legal or illegal. Place either an E for ethical or U for unethical, and either an L for legal or an I for illegal for each activity. Compare your answers to those of your classmates and discuss any differences.

1. Buying competitors’ garbage: U
2. Dissecting competitors’ products: U
3. Taking competitors’ plant tours anonymously: E but at the same time U 4. Counting tractor-trailer trucks leaving competitors’ loading bays: E 5. Studying aerial photographs of competitors’ facilities: E 6. Analyzing competitors’ labor contracts: U & I

7. Analyzing competitors’ help-wanted ads: E
8. Quizzing customers and buyers about the sales of competitors’ products: E 9. Infiltrating customers’ and competitors’ business operations: U 10. Quizzing suppliers about competitors’ level of manufacturing: E 11. Using customers to buy out phony bids: E

12. Encouraging key customers to reveal competitive information: U 13. Quizzing competitors’ former employees: E but I (if the former employee signed a privacy clause) 14. Interviewing consultants who may have worked with competitors: E 15. Hiring key managers away from competitors: E & L

16. Conducting phony job interviews to get competitors’ employees to reveal information: E, U, L, and I. 17. Sending engineers to trade meetings to quiz competitors’ technical employees: E 18....
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