Strategic Management Analysis

Topics: Leadership, Strategic management, McDonald's Pages: 15 (4030 words) Published: April 25, 2013
strategic management skills for MacDonals'

SM 0374 Assignment

Tutor: Tony Purdie
Date: 09/05/2012
Word count: 3233 words

1.0 Part A: Question 12
1.1 The Successful of McDonald’s Corporation2
1.2 Reasons Underpinning Success4
1.2.1 High Research and Development Group4
1.2.2 Hamburger Universities5
1.2.3 Talent Management System5
1.2.4 to Satisfy Different Area of Customers’ Demand5
1.2.5 Strong Brand Name6
1.2.6 Franchising6
1.2.7 High Performance and Low Price Products6
1.2.8 A Clear Competitive Strategy7
1.2.9 Success of Suppliers7
1.3 Analysis the Key Successful Reasons through VRIN and Value Chain7
1.3.1 VRIN7
1.3.2 Value Chain9
1.4 Recommendation for Future Success11
1.4.1 Threats11
1.4.2 Recommendation12
2.0 Part B: Question 213
2.1 Theory about Strategic Drift and Leadership13
2.2 Case Analysis about the Relation of Failure Leadership and Strategic Drift14
2.2.1 RIM15
2.2.2 Marks & Spencer16
2.3 Recommendation for Avoid Strategic Drift17

1.0 Part A: Question 1
1.1 The Successful of McDonald’s Corporation

McDonald's is the leading global foodservice retailer, which has more than 33,000 local restaurants in 119 countries (McDonald, 2012). In addition, the aim of McDonald's is not to be the biggest fast foodservice restaurant chain. However, they committed to being the best fast foodservice retail chain (GEP, 2012). It made them to be the world’s most successful chain of fast foodservice restaurants. In the best global brands ranking, McDonald’s is the sixth most valuable brand in the world (Interbrand, 2011).

Figure 1: Comparable Sales Growth of McDonald’s

Source: McDonald’s Annual Report (2007-2011).

Comparable sales are one of the significant performance indicators in the retail industry. It was used to confirm how many new sales comes from actual sales growth or just comes from new store openings (McDonald’s Annual Report, 2011). The long-term of McDonald’s targets is average annual sales growth 3% to 5% (Gilmartin, 2012). As we can see clearly that it has exceeded their strategic aim. This is because that the corporation focus on driving operating efficiencies and effectively managing restaurant. Furthermore, it proved adequately that the McDonald’s manager in every area of the world execute their strategies successfully due to the good sales growth. A good strategy implementation is one of the significant elements of successful business (Analoui & Karami, 2003, p.217). That is why McDonald’s is the successful company.

Figure 2: The chart below shows the fast food market share percentage in U.S 2005-2010:

Source: IBISWorld (2010). (Appendix A)

Figure 3: The picture below indicates that the fast food industry market share in Latin America and Caribbean for 2010:

Source: Euromonitor (2010). (Appendix B)
In above charts, it is clearly illustrated that McDonald’s has strong market share in different area. This is because that McDonald’s has superior products, and a wide variety of food. The McDonald’s Corporation pay attention to provide the quality and value of safe products and healthy surrounding for customers (McDonald’s Annual Report, 2011). Nowadays, more and more people want their meal in comfortable environment. Furthermore, the wide variety of food is to suit local markets due to it is a multi-national company. Different food can satisfy different flavours. In addition, the low prices keep McDonald’s has advantage to share the market. These advantages make McDonald’s become an incredible success global company.

1.2 Reasons Underpinning Success
1.2.1 High Research and Development Group

Although the characteristics of consistency and innovation seem to contradict one another, they work together to promote McDonald’s growth (McDonald’s Annual Report, 2011). This is because that McDonald’s pay attention to innovation for new...
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