Part Two: Summary of the Idea (ILOs 3.1; 3.

3)
I. Describe Your Capabilities
A. Setting out your resources and capabilities helps to differentiate your company
from competitors.
a. Explain the competitive advantages that will make your business a
success.
Tangible Resources:
Tangible resources are the easiest to identify and evaluate: financial
resources, human resources, physical resources and organizational.
Physical
The physical resources of McDonalds include the restaurant location
which will be at UCTI building with an average sitting capacity of 50
persons. The restaurant is equipped with the latest cooking and storing
equipment. The restaurant has the facility of Play Place for students and
has one television.
Human resource
Human resource is most important resource of any business unit
wherever in the world. The strength of any organization is not the
machine, equipment or its cash flows; rather these are employees that
make an organization great and competitive.
McDonald’s recognizes that employee satisfaction is a critical component
in its goal of achieving 100 percent customer satisfaction. Its employees
are offered world-class, award-winning training and the opportunity for
career development.
Hiring Personnel
There is no criterion as such for the selection of employees, what is
important is integrity, motivation and some educational qualifications.
In the workforce, qualities, which are sought, are anatomy, motivation
and ability to work more hours. While for manager the characteristics
required are leadership, energy and attraction
Financial
McDonald’s is concerned, now information is available about its financing
activities. McDonald’s is working with two banks namely CIMB and
Maybank. These two banks are taking care of any financial activity for
McDonald’s inside and outside the country and also provide short-term
loans to the company.
Organizational
McDonald serve as training center where day-to-day coaching and
shoulder-to-shoulder interaction between managers and crew are
emphasized. Training begins with one-on-one instruction before a crew-
person cooks the first French fries and for new entrants to the workforce,
the company offers an important foundation:
Teaching interpersonal and organization skills.
Crew-members can also learn the importance of teamwork. Discipline
and responsibility.
Intangible resources:
Capabilities
McDonald applied an essential step in translating directions and
operating practices into capabilities. The successful firms used the
knowledge as part of the fundamental transformation in their
enterprises. Moreover, the McDonald pioneered the transformation
through systematization which is appropriate in their processes.
The idea of systematization presumes that the firm can more fully
articulate the processes as part of its capabilities.
With concern of knowledge management, McDonald Company is
primarily implementing the McDonald’s system. The essence of
systematization of knowledge is followed by every outlet with a detailed
set of rules. Therefore, the operating practices became part of every
employee and given a thorough attention from the management through
the training programs.

Capabilities are highly essential in the following areas:

Capabilities
Inbound Logistics
Organizing the supply of food and materials to restaurants through
approved third party logistics operators.
Production huge plants denoted exclusive to McDonald control food
Operations
R&D in field research needs of end users.
Quality development in collaboration with good suppliers
Forward integration through franchisees with control over store
presentation, menu items etc. and enhance participation in process
improvement.
Outbound Logistics
It is the concern of the franchisee.
Outbound logistics are growing as a part of McDonald recycling system
integrating in the logistics of distribution center.
Sales & Marketing
Long term marketing objectives are broken down into short term
measurable targets, which McDonalds uses as milestones.
Country teams are given autonomy in marketing mix decision.
Services
Services provided by the companies’ enrollment standards
McDonald’s Marketing Mix (4Ps) Analysis
product in McDonald’s Marketing Mix
As a food service business, McDonald’s has a product mix composed
mainly of food and beverage products. This element of the marketing mix
covers the various organizational outputs (goods and services) that the
company provides to its target markets. McDonald’s product mix has the
following main product lines:

Hamburgers and sandwiches

Chicken and fish
Salads
Snacks and sides
Beverages
Desserts and shakes
Breakfast/All-day breakfast
MacAfee
Place/Distribution in McDonald’s Marketing Mix
This element of the marketing mix enumerates the venues or locations
where products are offered and where customers can access them.
Restaurants are the most prominent places where the company’s
products are distributed. However, the business utilizes various places as
part of this 4P variable. The main places through which McDonald’s
distributes its products are as follows:

Restaurants
Kiosks
McDonald’s mobile apps
Post mate’s website and app, and others
 McDonald’s Promotion (Promotional Mix)
This element of the marketing mix defines the tactics that the business
uses to communicate with customers. Among the 4Ps, this variable
focuses on marketing communications with target customers. For
example, the company provides new information to persuade consumers
to purchase new products. McDonald’s uses the following tactics in its
promotional mix, arranged according to significance in the business:

Advertising (most significant)

Sales promotions
Public relations
Direct marketing
McDonald’s Prices and Pricing Strategies
This element of the marketing mix specifies the price points and price
ranges of the company’s food and beverage products. The aim is to use
prices to maximize profit margins and sales volume. McDonald’s uses a
combination of the following pricing strategies:

Bundle pricing strategy

Psychological pricing strategy

b. Are there experts on your team?

Yes, there are experts in the team
c. Have you found the perfect location for your store? Your company
description is the place to boast about your strengths.
Yes, and it is significant

1. The Location: Egypt,

Alexandria Stanley
 2. The Address: Alexandria 253 El Guish Rd. stanly, Alexandria.

3. Location On Map:

B. Describe the skills and experience of your workforce and your management
team, referencing any training and management development programs you
run.

ComponentsofSalesPeopleTraining Program
Factors Yes/N
o
Essential yes
sales skills
The yes
customer
experience
Your yes
products
and market
Your sales yes
process
CRM yes
training
Team- yes
building
exercises
Assessmen yes
t
C. Explain how your investment in manufacturing facilities ensures quality,
capacity and productivity.

McDonald’s (MCD) operates over 38,000 restaurants that require a

variety of ingredients. McDonald’s doesn’t make any of its products.
Instead, it contracts with suppliers to meet this massive requirement.
Suppliers are part of McDonalds’ three-legged stool. The other two parts
are the owner or operators and the company employees.
McDonalds’ suppliers include Tyson Foods (TSN), Lopez Foods, 100 Circle
Farms, Gaviña Gourmet Coffee, Hildebrandt Farms, and many more.
These companies supply bakery supplies, meat, poultry, fish, produce,
and dairy products.

Each day, McDonald’s serves almost 1% of the global population.

Moreover, the company sells over 75 hamburgers a second. With its
large-scale operations, McDonald’s suppliers are also numerous.
McDonald’s supply chain is a complex web of direct and indirect suppliers
that are held to clear standards for quality and efficiency. The company
uses direct suppliers that coordinate purchasing and distributing to
restaurants. In comparison, indirect suppliers operate facilities such as
grain mills and abattoirs. Farms and ranches raise cattle or grow wheat,
lettuce, and other essential ingredients.

Similarly, distribution centers coordinate purchasing and distribution to

restaurants. Products are transported to restaurants by special vehicles
equipped with temperature-control mechanisms. McDonald’s only accept
products transported in ideal conditions.
McDonald’s works with its suppliers to ensure the health and safety of
people, as well as the health and welfare of the animals in its supply
 chain. As an example, McDonald’s endorses animal production practices
that reduce the use of antibiotics in food animals.
D. List any quality or industry accreditation and highlight any industry awards.
McDonald's Corporation, Finalist in the Best Achievement in Operational
Excellence to deliver Digital Transformation, selected by the independent judging
panel, for the 2020 Business Transformation & Operational Excellence Industry
Awards program.
During the March 2017 Velocity Growth Investor Event everyone in the industry
took notice when McDonald’s publicly committed to our investors that it would
deploy Mobile Order and Pay to over 20,000 restaurants by the end of year.
Suddenly, McDonald’s was changing the narrative, with headlines highlighting
our customer focus, ambition and strategic moves outlined in our Velocity
Growth Plan. To support accomplishing this strategic initiative, McDonald’s
established the Global Technology PMO (GTPMO). Reporting to Daniel Henry,
Executive Vice President and Global Technology Chief Information Officer, the
team quickly operationalized and immediately set out establishing PMO
processes, standards and a governance framework to prioritize and operationally
manage this massive global effort.
E. Point out anything that is unique about your firm, for example, a commitment
to carbon-neutral manufacturing.
Mott MacDonald is the first company in its class to be independently certified
carbon neutral. The Carbon Trust certified the global engineering, management
and development consultancy to the international standard for carbon
neutrality, PAS 2060, at the end of September. It is a major milestone on Mott
MacDonald’s journey towards both net-zero carbon emissions and net-zero
greenhouse gas emissions.

Mott MacDonald filed carbon data from its entire global business* for validation
by the Carbon Trust, and received certification to ISO 14064, the international
standard for carbon reporting. This is another first among the company’s peers.

Mott MacDonald has reduced its global carbon footprint by 45% per employee in
the last five years. It is on track to reduce the figure by 25% in total by 2024,
measuring from a 2018 baseline. It has offset residual carbon emissions using a
carefully selected peatland restoration programmer in Sumatra, Indonesia, that
the company itself has helped design.

Mike Haigh, Mott MacDonald’s executive chair, said: “I am incredibly proud we

are the first among our peers to have achieved carbon neutral certification. Our
colleagues worked hard to make this happen. In playing our part, we believe it is
important to show leadership and that there will be benefits to our business in
making the transition.”

Mott MacDonald’s reductions are guided by climate science, which shows that

emissions of all greenhouse gases must be cut to net-zero by 2050 across
developed economies, and by 2070 by the rest of the world. Its 25% reduction
target has been approved by the Science Based Targets initiative, which is a
 collaboration between carbon disclosure charity CDP, the United Nations Global
Compact, the World Resources Institute and the World Wide Fund for Nature.

II. Set Out Company Performance

A. Provide a brief statement of financial performance, including information on
turnover, profitability and share value.
MCD Financial Summary
For the nine months ended 30 September 2020, McDonald’s Corp revenues
decreased 13% to $13.89B. Net income before extraordinary items decreased
25% to $3. 35B.Revenues reflect International Operated Markets segment
decrease of 20% to $6.86B, U.S. segment decrease of 3% to$5.72B, International
Lead Markets segment decrease of 20%to $6.86B, U.S. segment decrease of 3%
to $5.72B.
B. Describe your company’s growth record and include information on future
prospects, such as entry to new markets or a strong portfolio of new products.
McDonald’s statistics & facts
The quick service behemoth operated and franchised by far the largest
proportion of restaurants in its home country. In 2019, the number of
McDonald’s restaurants in the U.S. reached 13.8 thousand. When looking at the
countries with the most McDonald’s in Europe, France (including Monaco) took
the top spot, accounting for almost 1.5 thousand units. Meanwhile, China had
the most McDonald's restaurants in the Asia Pacific and Middle East regions. The
United States was also one of McDonald’s biggest markets in terms of revenue.
In McDonald’s regional revenue breakdown, the U.S. accounted for nearly eight
billion U.S. dollars in revenue in 2019. Meanwhile, internationally operated
markets such as Australia, France, Canada, and the UK made the largest overall
contribution to McDonald's total revenue, with a sum of 11.4 billion U.S. dollars.
In total, McDonald's revenue reached 21.08 billion U.S. dollars in 2019.
 Revenue from 2005 to 2019

III. Organization Management Functions

A. In what ways did Planning, Organizing, Leading & Controlling contribute to the
company’s success (or failure)? “Management function”

Effective management process has contributed to the company’s success

over the past ten years. Today, the company is the leading food retailer
with over 32,000 restaurant branches in more than 100 countries. The
management functions of the company ensure that all restaurants work
towards achievement of common goals and objectives . The reputation of
the company is greatly associated with innovation and strong customer
relationships, which are maintained by management functions.

The planning function

ensures that the organization identifies and selects appropriate goals and
measures for achieving the objectives. McDonald’s considers this a
principal function of management because it ensures that all restaurants
share and work towards shared objectives. The managers of the
restaurants also benefit from this function by ensuring the resources
available are effectively utilized towards the achievement of set goals.
According to Rai, McDonald’s planning function assists in developing
strategies to implement decisions made regarding organizational goals
that the company wishes to pursue (466). The company’s vision is to be
the best quick service restaurant in America and Europe. To achieve this,
McDonald’s carefully plans actions to take and attempts to maximize
available resources.

Organizing

involves the establishment of the organizational structure of the company.

Under this function, emphasis is mainly on the division, coordination, and
control of tasks and information within the organization. Managers rely on
this function to distribute or delegate authority to other employees. Any
successful organizational structure acknowledges that customers and
employees are the most important assets in the organization. McDonald’s
has successfully built an organizational culture, which improves
employees’ creativity and motivation. Organization of operations within
the company promotes empowerment and delegation within the
franchise, enhancing its competitive advantage. The collaborative
management approach used by McDonald’s ensures that all retail centers
of the franchise located in different regions operate smoothly and
collaboratively. In addition, the company’s organizational structure has
also been enhanced by the existence of a common company name and
consistent quality standards across all retailers operating under the
franchise

Leading

 is the fourth function in management, which also contributes to

achievement of organizational goals. It entails the formation of a clear
vision and an empowering organizational culture to ensure every
stakeholder of the organization understands how their individual roles
contribute towards the achievement of organizational objectives.
McDonald’s company uses power, influence, persuasion, and
communication strategies to effectively implement this function. The main
activities under this function at McDonald’s include the coordination of
employee behavior to ensure all activities are in harmony and the
maintenance of employee motivation and commitment. To improve
coordination and motivation, the company encourages employees to work
in groups and organizes events to facilitate interaction of employees in
different centers, especially for those located in the same regions. In
addition, majority of accounting and marketing documents are stored
online to facilitate evaluation and correction by company managers.

Planning

coordinating, organizing, and leading can effectively assist an

organization to select the right goals, maximize available resources, and
achieve set goals. McDonald’s has successfully managed to ensure
effective and efficient performance through the four principal functions. I
agree with how the company current implements the planning, controlling,
and organizing activities because they help the company improve
employees’ motivation and customer satisfaction. The organization’s
planning strategies, which rely on a decentralized decision making
system, encourages more people to participate. This ensures that all
franchisees are aware of the company goals and fully understand them. I
also believe it is easier for the company to ensure employees maintain
 the same quality standards because organizing and controlling
management functions focus on building an effective organizational
culture in all franchises.,. However, the company can improve its
strategies on leading to enhance its openness. Currently, the function
emphasizes on ensuring the employees follow the laid down policies and
rules, which discourage creativity and lower employee motivation.
Therefore, I recommend that McDonald’s maintains its current policies on
planning, organizing, and controlling, but improve its policies on leading.
This can be achieved by making franchisees more independent, which
will enhance the ability of the employees in each franchise to come up
with ways to meet needs and demand of respective markets.

Part Three: Conclusion (ILOs 3.1, 3.2, 4.1)

I. What do you see as major challenges facing this company in the next five years?
(Long-term plan)

Perceptions matter
For starters, there is the perception problem. The restaurant chain became popular
with consumers during a fast food era. The convenience of fast food fit perfectly into
a post-industrial society, where time was a premium commodity.
UT, the Oakbrook, Ill.-based company seems to have missed the memo about
changing consumer preferences. Even as competitors gained popularity with
millennials with their fast casual food, the McDonald’s menu remained unchanged
and, to a certain extent, quaintly unhealthy and old-fashioned.

For McDonald’s, the emphasis on fresh and locally sourced ingredients and artisan
sandwiches is a radical paradigm shift in operations. This is because, much like any
other large organization, the company’s supply chain is complex and depends on
mass production and supply. Changing it overnight would disrupt entire product
economies.
The baggage of operational complexity
Like most other large organizations, McDonald’s has collected a large amount of
baggage over the years. That baggage ranges from an overly complex menu that
confuses customers, to a clamorous set of investors intent on unlocking value from
its real estate holdings.
 The rapid growth of fast casual eating places (such as Panera and Chipotle)
happened recently; but, McDonalds has been wary of alienating its core customer
constituency. So, it adopted a middle path by catering to multiple customer
segments simultaneously; the result is a complex menu that dissuades rather than
encourages customers from ordering items. The transition has also resulted in
internal operational issues and increased wait times.

The real estate problem

Truth be told, this is a nice problem to have. Over the years, McDonalds has faced
down activist investors intent on spinning off its real estate holdings into a separate
entity. Their enthusiasm to generate profits from the company’s real estate holdings
is understandable: McDonalds is a real estate behemoth with property holdings
worth at least $39 billion reported in the last quarter.

But, they are locked in complex financial engineering. Back in 2005, activist investor
Bill Ackman’s Pershing Capital acquired a stake in McDonalds and lobbied the
restaurant chain to close down its corporate (or, company-owned) stores, which
have historically under-performed. The argument makes sense when you consider
that franchisees, who rent their locations from the company and also pay 5% of their
sales in lieu of rent if they are doing well, have greater incentive to increase footfalls
at their stores.

II. Overall measurements of success for this company. Standard

measurement

Management buy-in before all else

Set achievable and actionable metrics
Outsource the feedback gathering
Tap technology – don’t undertake it all yourself
Don’t skip the training
Review and review again
Jerry Calabrese was responsible for a global restaurant measurement
system that evaluated and helped to significantly improve the
performance of 32,000 restaurants in 100+ countries in the period from
2002 to 2008. As VP of Restaurant Measurement at McDonald’s
Corporation, his leadership and implementation of tools and processes
were a key enabler and significant factor in the financial and operational
 turnaround of the company during his tenure that helped McDonald’s
improve its performance and brand image during that time period.
III. What are your conclusions about the management based on your
research?
None were as successful as McDonald’s at maximizing profit and minimizing
cost. The rapid growth of McDonald’s from one small store in 1948, to its first
restaurant in 1955, to its worldwide dominance and market saturation at the
turn of the twenty-first century, is a story of capitalist enterprise, sometimes at
its worst and (to its shareholders) sometimes at its best.
IV. Be free of new information (not mentioned above).

The business practices of McDonald’s are, to put it kindly, slightly

suspect. By keeping employee wages low and refraining from hiring full
time workers, the company was able to save money on health care
packages and employee benefits.
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