Assurance of Learning Exercise 1a
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
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
References: American School Search (2009-2012). Liberty University - Review & Ranking http://www.american-school-search.com/review/liberty-university Liberty University (2012) 18, 2012 from Web site: http://www.liberty.edu/index.cfm?PID=6905 Liberty University (2012) 18, 2012 from Web site: http://www.liberty.edu/index.cfm?PID=21240 Liberty University (2005, May 13) Retrieved October 18, 2012 from Web site: http://www.liberty.edu/media/1616/Strategic%20Plan.pdf Skinner, J. (2010). Annual Report 2009. Retrieved October 18, 2012 from, Web site: http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/C-%5Cfakepath%5Cinvestors-2009-annual-report.pdf Standard & Poor 's (2011) October 18, 2012 from, Web site: http://img.en25.com/Web/StandardandPoors/SP_CreditRatingsGuide.pdf Q1 Labs (2010). Dramatic growth creates need for advanced detection of threats and minimizing risks (2012)