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STRATAGIC MANAGEMENT PROCESS

Strategic Management is a process that includes defining the business; performing
environmental scan; redefining mission and vision; formulating the strategies; developing
organizational goals for converting strategy into measurable actions; implementing and then
evaluating the strategies

 BUSINESS OVERVIEW

o Business territory:
The Company essentially works and establishments McDonald's cafés in the
nourishment administration industry. These cafés serve a changed, yet restricted,
esteem valued menu above 100 nations around the globe. The Company likewise
works Boston Market and Chipotle Mexican Grill in the U.S. what's more, has a
minority proprietorship enthusiasm for U.K.- based Pret, A Manger. In December
2003, the Company sold its Donatos Pizzeria business.

o Products and Services:

McDonalds is a business. However, it is a business that provides a service, and that
service is to sell u fast food products that are of good quality.

 Services:
Every fast food restaurant is operating whether as a corporation or private business is
purposed at generating a new upsurge in service operations  Product quality and customer
satisfaction are the basis that enables McDonald's to create the exceptional fast food
service Most importantly, the service concept is facilitated by the employees who reveal
positive attitudes and commitment aimed to customer satisfaction. In this case,
McDonald's restaurants concentrate on attracting and employing the best and at the same
time offer the finest place to work. McDonald's aims to offer distinctive service quality
and high value to its customers 
  Product:

McDonald's has made a progression of the exacting menu to keep up the unmistakable
newness and taste of its item. During assembling, the item experiences numerous quality
checks to ensure it accomplishes the top-notch viewpoint. As McDonald is providing fast
food to the customers the products are:
 Hamburgers and sandwiches
 Salads
 Beverages
 Desserts and shakes
 Chicken and fish
 Fries
 McCafé
 Breakfast all day.

o TOTAL ANNUAL REVENUE

McDonald's reported earnings of US$5.9 billion, with an annual revenue of US$21.0
billion.

o PROFITS

 McDonald's net income for the twelve months ending December 31, 2019, was
$6.025B, a 1.71% increase year-over-year.
 McDonald's annual net income for 2019 was $6.025B, a 1.71% increase from 2018.
 McDonald's annual net income for 2018 was $5.924B, a 14.1% increase from 2017.
 McDonald's annual net income for 2017 was $5.192B, a 10.79% increase from 2016.

BLANCE SCORE CARD OF MCDONALD

Yes there is a balance score card available for the MacDonald’s company

Reason

McDonald’s offers new and existing customers different products and a whole different
experience that will set them apart from their competitors.
McDonald’s wants to encourage consistency among restaurants.
McDonald’s
relies on their suppliers to give them the highest quality products
  ENVIRONMENTAL SCANNING
Environmental scanning include three things:
 Swot analysis
 Pest analysis
 5 poster forces

SWOT ANALYSIS:
. A SWOT analysis -- a look at strengths, weaknesses, opportunities, and threats -- can help
assess whether the fast-food giant can keep the growth on a high-calorie diet.

 STRENGTHS
McDonald's has effectively turned out new things like espressos, and Angus burgers,
extending the scope of menu decisions.
 With a solid item offering, the organization has developed a salary all through the
downturn, scoring solid increments in same-store deals.
 Tasks are spread the world over, which means the organization isn't presented to only
one money or economy.
 In any event, exchanging close to its highs, McDonald's presents sizzling profit yields
that top the 10-year Treasury. The yield accompanies a side request of yearly profit

 WEAKNESS
 It will be increasingly hard to track down prime areas to assemble a lot of brilliant
curves. The U.S. is immersed with its cafés, so development should happen
universally, presenting potential social difficulties.
 While the yearly profit climbs are probably going to proceed, the profit development
rate has been easing back and will likely keep on easing back or level off.

 OPPORTUNITIES
 There are open doors for new eateries outside the United States, and McDonald's has
been exploiting them. China is an incredible open door for the organization, as is quite
a bit of Asia.
 Menu developments are restricted uniquely by a creative mind.
 Low loan costs give modest money to development. Notwithstanding dollar-named
obligation, McDonald's as of late turned into the principal outside organization to give
Yuan-designated bonds in Hong Kong.
 THREATS
 Governments are thinking about guidelines focusing on inexpensive food.
 McDonald's faces rivalry from solid companions, for example Stock pick Yum!
Brands and Burger King.
 New item rollouts regularly need to clash with set up players like Starbucks espresso
or Jamba smoothies.
 Item cost increments could build costs while a feeble economy confines the capacity
to pass the value climbs through to buyers.

PEST ANALYSIS
PEST Analysis (political, economic, social, and technological) is a management
method whereby an organization can assess major external factors that influence its
operation to become more competitive in the market.

 POLITICAL FACTORS

Political factors play a vital role in the operations of a business. This relates to many
factors that are politically influenced. 
For McDonald's' situation, the political elements include: increment in universal
exchange understandings, which is a chance; the pending assessment changes which
additionally is a chance and the changing general wellbeing rules and approaches,
which represent a danger to activities in the business. The political components have
empowered McDonalds to grow in numerous global markets because of political
stability
There is a risk of the general wellbeing arrangements which are progressively
demoralizing individuals from devouring garbage and cheap food. In any case, the
organization gets an opportunity to change and improve its items to be sound. In this
investigation, the political components openings exceed the dangers that are presented
by the approaches.

 ECONOMIC FACTORS
 Economic factors address the wider economy. The economic factors include the
growth rate of the economy, inflation, unemployment, costs of raw materials, and
energy costs among others. Changes and shifts in these factors affect the operation of
an organization
McDonalds working conditions since it works in various markets. The moderate yet
consistent nature of the US economy offers a chance to the organization. McDonalds
can develop on account of the idea of the economy of the state.
 In Asia there is a rapid growth of the economy and it is offering opportunities to the
local population. This is also a threat to McDonalds’ expansion in the Asian market

 SOCIAL FACTORS

The analysis of social-cultural factors refers to the social conditions that favor or limit
the business of the company. Socio-cultural factors involve shared or common
attitudes and beliefs of a population. They also refer to how the population reacts to
trend changes
McDonalds, the outer social components include: First, the enlarging riches hole. This
carries open doors for the organization to build income because of an expanded client
base. Since the organization focuses on the center and the low salary workers, this
makes the extraordinary potential for development. Also, social assorted variety offers
the organization a chance to improve the item blend to suit the different market
The analysis gives the company more opportunities than threats and hence an
increased chance for future business

 TECHNOLOGICAL FACTORS

The technological factors also play a vital role in the success of a company. The ever-
changing technological techniques offer opportunities to those companies that also
grow with the technology while the ones that do not improve their technologies are
threatened
McDonalds, innovative work exercises help the organization to think of upgrades that
improve productivity. Likewise, computerization by the organization helps in
expanding creation and consequently a bigger market is effortlessly fulfilled. Also,
web-based promoting and deals increment the market base for the organization
Self-service creates efficiency for both the organization and the customers. Also
automation makes the production of different products easy and faster. This improves
the general performance of the organization.

5 POSTER FORCES
Five Forces analysis of McDonald’s, the forces are mainly within the fast food restaurant
industry. As the leading restaurant chain business in the world, the company is an example of
effective strategic management, especially in dealing with competition in different markets
worldwide. This status shows that McDonald’s strategic direction is appropriate to the
external factors
 Following is a detailed Porter Five Forces Model Analysis of McDonald's:
 Competitive Rivalry – Strong. ...
 Threat of New Entrants – Moderate. ...
 Bargaining Power of Suppliers – Weak. ...
 Bargaining Power of Buyers – Strong. ...
 Threat of Substitutes –Strong. ...

Competitive Rivalry or Competition with McDonald’s (Strong Force)

McDonald's faces tough competition because the fast-food restaurant market is saturated.
This element of Porter's Five Forces analysis model tackles the effects of competing firms in
the industry environment. In McDonald's case, the strong force of competitive rivalry is
based on the following external factors:

 High number of firms – Strong Force

 High aggressiveness of firms – Strong Force
 Low switching costs – Strong Force

The fast-food restaurant industry has many firms of various sizes, such as global chains like
McDonald's and local mom-and-pop fast food restaurants. This external factor strengthens
the force of rivalry in the industry. Also, the Five Forces analysis model considers firm
aggressiveness a factor that influences competition. In this business case, most medium and
large firms aggressively market their products. This factor increases the intensity of
competitive rivalry that McDonald's Corporation experiences. Also, low switching costs
make it easy for consumers to transfer to other restaurants, such as Wendy's and Burger King.
This external factor adds to the force of competition. Thus, this element of the Five Forces
analysis of McDonald's shows that competition is among the most significant external forces
for consideration in the strategic management of the business.

Bargaining Power of McDonald’s Customers/Buyers (Strong Force)

McDonald’s must address the power of customers on business performance. This element of
the Five Forces analysis deals with the influence and demands of consumers, and how their
decisions impact businesses. In McDonald’s case, the following are the external factors that
contribute to the strong bargaining power of buyers:

 Low switching costs – Strong Force

 Large number of providers – Strong Force
 High availability of substitutes – Strong Force

Forces analysis model, this external factor strengthens the bargaining power of customers., on
account of market immersion, purchasers can look over many drive-through eateries other
than McDonald's. This condition makes the bartering intensity of purchasers a solid power in
influencing the organization's outer condition.
 Bargaining Power of McDonald’s Suppliers (Weak Force)

Suppliers influence McDonald's in terms of the company's production capacity based on the
availability of raw materials. This element of the Five Forces analysis model shows the
impact of suppliers on firms and the fast-food restaurant industry environment. In
McDonald’s case, the weak bargaining power of suppliers is based on the following external
factors:

 Large number of suppliers – Weak Force

 Low forward vertical integration of suppliers – Weak Force
 High overall supply – Weak Force

The large population of suppliers weakens the effect of individual suppliers on McDonald’s
Corporation.

Threat of Substitutes or Substitution (Strong Force)

Substitutes are a significant concern for McDonald’s Corporation. This element of Porter’s
Five Forces analysis model deals with the potential effects of substitutes on firm growth. In
McDonald’s case, the following external factors make the threat of substitution a strong
force:

 High substitute availability – Strong Force

 Low switching costs – Strong Force
 High performance-to-cost ratio of substitutes – Strong Force

There are many substitutes to McDonald’s products, such as products from artisanal food
producers and local bakeries. Also, consumers can cook their food at home

Threat of New Entrants or New Entry (Moderate Force)

New entrants can impact McDonald’s market share and financial performance. This element
of the Five Forces analysis refers to the effects of new players on existing firms. In
McDonald’s case, the moderate threat of new entry is based on the following external factors:

 Low switching costs – Strong Force

 Highly variable capital cost – Moderate Force
 High cost of brand development – Weak Force

The low switching costs allow consumers to easily move from McDonald’s toward new fast
food restaurant companies

 MCDONALD VISION
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
they make every customer in every restaurant smile
  McDonald MISSION STATEMENT
McDonald's brand mission is to be their customer's favorite place and way to eat.
The mission statement of McDonald's fast-food restaurants around the world is not much
different from any restaurant chain. That broad and common mission statement is more
clearly defined by the McDonald's Values, which reflects the experience that customers can
expect when walking into a McDonald's fast-food restaurant no matter where it is located.

RECRUITMENT PROCESS
Recruitment is the name of attracting required candidates for announced job openings of an
organization. Sometimes it involves the organization itself getting attracted towards the
suitable people when there is a shortage of required person/s in market for particular job/s.

PROCESS IN MCDONALD
McDonalds often goes for external recruitment though they mostly prefer internal
recruitment or internal promotion. External recruitment of McDonald's involves recruiting via
the internet, advertising, and college recruitment. Recruiting via the internet has become very
common.
McDonalds often goes for external recruitment though they mostly prefer internal
recruitment or internal promotion.
 External recruitment of McDonald's involves recruiting via the internet, advertising, and
college recruitment. Recruiting via the internet has become very common.
Mc Donald’s has its own site where they publish jobs and ask people to send their cv s
through online process and often hire employees from there.
.the advantage of hiring the college students for jobs ie internships at McDonald is that they
don’t have to pay them much and they are temporary.

COOPERATE STRATAGY OF MCDONALDS

 Cooperate level strategies (globalization)

MacDonald’s currently operates about 32000 stores worldwide in 120 countries.

McDonald use the growth strategy. McDonald’s grown-up thinking about design is
part of its "Plan to Win" growth strategy

Business strategy:
Business strategy is defined as it is a long term planning of a business with specific goals and
target within a specific time with the available resources. It is a management plan constructed
by the top level of management in order to make the business runs in profit.

 Differentiation

McDonald’s has “Broad Target” and it wants to achieve competitive strategy adopted by
McDonald’s is “Differentiation” i.e. Mc Donald’s wants to a make its products unique and
highly differentiated In differentiation strategy, fast food chains need to be more selective in
which products to offer & more creative in their promotion strategy

McDonald’s offers specialized (Regionalized) version of its menu. This leads to differentiate
the products from other competitor products as well.Mc Grilled sandwiches in US &
Canada.Mc Chicken Premiere & Zesty chicken in UK, France, Italy & Belgium.To overcome
their healthy issues Mc Donald’s added salads & other lighter options to its menu &
encourage people to visit more often.Product adaptation in India- Vegetarian selections
 No beef or pork items,
 McMasalaWide variety of menu items according to the Indian menu items
 Vegetable & non vegetable products
 .Health conscious items
 .Local flavors.

 Cost leadership strategy of McDonald:

A leading cost strategy for McDonalds is the ability to purchase the land and buildings of its
restaurants. McDonalds also developed a strong division of labor for its production processes,
tight management control and product development strategy. Creating a strong top-down
style of management is another leading cost strategy for McDonalds. Using fewer in-store
managers allows the company to hire lower-wage workers to complete tasks. Limiting
autonomy is also central to avoiding costly and unnecessary restaurant expenditures like
improvements or altering business processes.

ORGANIZATIONAL STRUCTURE

An organizational structure is a system that outlines how certain activities are directed in
order to achieve the goals of an organization. These activities can include rules, roles, and
responsibilities.
 ORGANIZATIONAL STRUCTURE OF MCDONALD

McDonald’s Corporation’s organizational structure was reformed in 2015 to improve the

company’s handling of its global operations. A firm’s organizational or corporate structure
defines the organizational design and system through which organizational components
coordinate to achieve business objectives. McDonald’s corporate structure facilitates the
management of food service markets based on performance levels. As the largest fast food
restaurant chain in the world, the company keeps evolving to address current and emerging
market issues. Through this structure, the company rolls out new products to maintain its
performance in satisfying customers, especially in the presence of other food service firms,
such as Dunkin’ Donuts, Burger King, Starbucks, and Wendy’s.

TYPE
McDonald’s Corporation has a divisional organizational structure. Conceptually, in this
structure type, the business organization is divided into components that are given
responsibilities based on operational requirements. Each division handles a specific
operational area or set of strategic objectives. One of the aims of this corporate structure is to
support autonomy and organizational flexibility in satisfying business needs in different
organizational aspects and markets. McDonald’s organizational structure has the following
characteristics, arranged according to significance in affecting food service business
operations:
 Global hierarchy
 Performance-based divisions
 Function-based groups

HR HIERARCHY IN MCDONALDS
The organizational structure of McDonald is very common among fast food chains. First
there are board of directors or known as the top management which include the CEO and the
owners followed by different departments such as human resource, audit and accounting
department, operations department and information technology department. The company has
also operations manager which handles the daily tasks of the service crew
In McDonald, there appeared to be a product controller and crew leader who were non-
managerial employees and there are managers who are always present. The managers are
responsible for controlling every aspect of the whole operations and service process. Since
McDonald is a fast food chain, there is a hierarchy of commands. Further there are also
regional manger and store manager all the way to the CEO of the company

EXTERNAL RECRUITMENT PROCESS OF MCDONALD

 Online application form

The first step starts right here in the form of an online application form and quiz. You can
apply to up to 10 restaurants within one application. As part of the application process you
will be asked to complete a short quiz made up of multiple choice questions. This is to help
McDonald's understand the position in our team that suits you best.
If you have not turned 16 years old yet, you will need a parent or guardian’s consent. Consent
can be given either electronically or via a signed paper form. Parental consent must be
provided before or during your interview.

 Interview

If your application looks good you will be invited to an interview via email. The interview
normally takes place at the restaurant, and will either be an individual interview that will take
approximately 15 minutes or a group interview that may take up to an hour.

The interview gives both you and McDonald's the chance to see if we are right for each other.
Here are some tips to help you get started.

 Checks
We may conduct a reference check to confirm any information that may assist us with your
application. This could be with your previous employer, school teacher or parent/guardian.
At McDonald's the safety and wellbeing of all of our employees is paramount, therefore
offers of employment for applicants over the age of 18 will be conditional upon the
completion and satisfactory outcome of a criminal background check. If you are over the age
of 18 you will be requested to complete the criminal background check at the reference check
stage of the application process.

SELECTION AT MACDONALDS
The McDonald’s selection is directt based on which job you wish to do in the company. For
example, if you to work as a trainee manager the process lasts around four to eight weeks and
consists of a four-step process:
1) Online application
2) Personality questionare
3) On-job evaluation
4) Interviews
The online form asks for personal details, two references, educa!onal history and some short
answers (no more than 500 words) to six competency questions such as
“What appeals to you about Restaurant Management and what qualites make you suitable for
the position?’’ or “Which of your past jobs have you enjoyed most and why?’’.
The second step is the personality ques!onnaire where candidates are asked to
complete a personality test, designed to evaluate their personal values and suitability for the
role. Its main focus is on leadership qualites and the ability to work well in a team.
Then, the third step is “The on-job evaluation (OJE)”. It is a day-long assessment in which
candidates try out various tasks on the shop 8oor. Candidates join a restaurant crew for the
"rst part, learning about customer service, cash-handling, equipment maintenance, food
hygiene and health and safety. Later on candidates learn about complaint handling
management. Candidates are observed while they take part in a series of group exercises to
overcome various problems. Finally, the fourth step is an interview with an opera!ons
manager. This may cover eductional and work history, motivation to join the
company and basiccompetencies. It’s also an opportunity for candidates to ask ques!ons
about the job and future prospects. The company usually contacts candidates within ten days
regarding job o(ers once the assessment process is complete

 Competetive advantage
Recruitment and selec!on are the key to achieving a compe!!ve advantage for a company like
McDonald’s. McDonald’s believes that the success of the restaurants and the company is
achieved through their people. The company aims to recruit the best people, to retain them by
o(ering ongoing training relevant to their posi!on and to promote them when they are ready.
The recruitment policies, procedures and prac!ces re8ect the company

TRAINING AND DEVELOPMRNT PROCESS AT MCDONALD

In enhancing the Human resource management of McDonald, the management should also
consider the context of employee training and development. The new and strategic human
resource management approach of McDonald should highlight the value of providing regular
training and development programs for the improvement of the technical, technological skills
and knowledge of the employees and the crew members
The training and development initiative should be conducted in the purpose of achieving
growth for the employees and the corporate objectives. Accordingly, training and
development refers to the acquisition of skills and knowledge that specifically adhere to the
technical and intellectual requirements of the company, in this case, McDonald.
Trainings are characterized with learning through practical as well as experiential
developments within the bounds of the working environment. At present, training and
development programs for professional development offered by business organizations to
their employees encompass the aspects of morals and principles, work attitude and behavior,
field and technical know-how, and leadership potential.
All these should be taken into account by McDonalds based on the requirements of the
company in order to foster productive aptitude among qualified workforce in the fast food
chain.

COMPENSATION AND BENEFITS- MCDONALD

The company has invested in approaches to, flexible working, training and compensation
program has not only retained workers, ensured the growth of profits but also won awards.
That the company invests in skills and training is a major contributor.The company through
their people profit plan gives competitive packages to employees. Most employees feel
respected and motivated to work with McDonald. While others feel satisfied with their
growth and personal development. McDonald’s model breaks employee contributions into
two components: confidence and competence. It has engaged in a lot of skills training to
ensure the employees are competence enough to carry out their duties. While confidence is
realized by employs looking forward to coming to work, feeling motivated and feeling proud
to work for the company. According rt by working for McDonalds increased young workers
confidence and communication skills.To sustain trust and competence throughout its
franchisees, McDonald, offers competitiveand innovative packages to its staff from the
hamburger guy ton senior managers. These benefits include higher pay and benefits, private
healthcare packages for all employees, comprehensive product discount scheme covering
over ninety companies and products varying from swimming lessons to cars to iPod among
others.On top of that, shift managers enjoy the management bonus plan and also an increased
target level bonus. Store employees bonus are high with extra 50% per hours for stuff for
quality,cleanliness, and customer service

PERFORMANCE MANGEMENT SYSTEM

Performance management (PM) system is an internal organization system which the
organization used to manage its employees' work performance.. According to McDonalds,
PM is the process the managers ensure that their employees' activities and outputs are
consistent with the organization's goals.
The performance management system that is used in McDonalds is annual appraisal system.

 PERFORMANCE APPRASIAL
McDonald’s management should recognize the hard work and effort of their employee by
means of giving those rewards and other benefits. However, the company must also consider
having a well-established performance systems or indicators which would evaluate and
measure the performance of their employees in terms of quality. After considering and
implementing the new Human resource management for McDonald, it is expected that the
working behavior of their employees will be enhanced within 3 to 6 months of employees.
After the implementation of the said changes in the Human resource management of
McDonald, the management should be able to regularly appraise and evaluate the
performance of the employees to determine any performance gap which could be detrimental
to the operations of the company.  Upon the completion of this evaluation, performance gaps
should be noted to come up with systems which will meet the goals and objectives of the
company. Performance appraisals aim on achieving two basic objectives.
The evaluation purpose aims on letting the employees know where they stand relative to the
performance of their co-workers and the objective of the standards of the company. On the
other hand, the development purpose aims on assessing the training knowledge needs of the
service crews for both the personal and professional development

 REFRENCES AND LINKS

 https://apply.mcdonalds.com.au/public/index.cfm?
action=showPublicContent&assetCategoryId=4310

 https://www.scribd.com/doc/23239397/HR-Structure-Of-Mcdonald-By-
Farhan-Abid

 https://en.wikipedia.org/wiki/McDonald%27s

 https://www.coursehero.com/file/p4kqq5e/COMPENSATION-AND-
BENEFITS-MCDONALDS-CASE-STUDY-3-The-company-has-invested-in/

 https://www.bartleby.com/essay/Performance-Management-System-Of-
Mcdonald-s-FKDFV