Opportunities Weight Rating Weighted Score

1 Expansion in other sectors like coffee and bevarage industry 0.03 3 0.09
2 The company can rebuild their brand image by providing 0.02 1 0.02
healthier options as well
3 Become more customer centric which improves the brand image 0.10 3 0.3
4 Targets young people from the age group of 20-39 which are 0.03 3 0.09
largest consumers of fast food
5 More innovation in kids product line 0.03 3 0.09
6 Fast food industry is becoming more convenient for people due 0.05 3 0.15
to busy lifestyle
7 Offer new deals and discounts on special occasions like Eid, 0.03 3 0.09
Independence day etc
8 Focusing more on sustainability 0.04 1 0.04
9 New technological innovations can reduce time and save costs 0.05 2 0.1
1 Standardized process and secret ingredients diffrentiates it from 0.09 4 0.36
0 other competitors

Threats Weight Rating Weighted Score

1 Low market share due to high saturation in the market and 0.09 2 0.18
increasing number of competitors
2 No barriers to entry, which results in a huge number of 0.09 2 0.18
competitors
3 Social influence , as people are becoming more health conscious 0.02 1 0.02
and moving towards healtheir alternatives
4 McDonals have to adapt to every region which might result in 0.01 2 0.02
them losing their unique taste
5 They face critiscm as producing beef at farms, leads to a lot of 0.01 1 0.01
deforistation
6 Compared to its substitutes, the switching cost is very low 0.02 3 0.06
7 Few of the competitors provide the same item at lower price 0.09 1 0.09
8 Dine ins were closed due to pandemic, which decreased their 0.07 3 0.21
sales
9 Inflation has lead to higher costs and lower revenues 0.08 2 0.16
1 Cost of production has risen due to duties on imported raw 0.05 2 0.10
0 materials
Total EFE Score 1.00 0 2.36

Chosen Opportunity:
Become more customer centric which improves the brand image

Chosen Threat:
Dine ins were closed due to pandemic, which decreased their sales
Analysis of EFE Matrix:
For Chosen opportunity: McDonald's is overhauling its customer support procedures. In 2013, the firm
saw a drop in customer loyalty and revenue. As a result, the brand's increased consumer experience had
to become a top priority. Based on consumer reviews, the fast-food giant embarked on a series of
reforms aimed at improving customer satisfaction:

 With quality ingredients, you can customize your burger.

 Request performance can be improved by using self-order kiosks.
 Mobile-ordering systems have been improved.
 In certain cities, table service is available.
 Ensure that you are easily available.
 Proactively assist customers.

For Chosen Threat: Since March, the government's appeal for social distancing has been adopted. Of
necessity, this culminated in a substantial drop in McDonald’s productivity. To delay the spread of the
coronavirus, MacDonald’s is no longer open for business, and several outlets have been temporarily
closed.

 McDonald’s would take the following steps to counteract the measures:

 Increase the visibility of your food takeaways and deliveries
 Improve the management of food inventories
 Prioritize digital marketing.
 Customers should have access to healthy food options.
 Effectively Manage Your Shift Employees

The EFE score is recorded 2.36 which is below the average score and it is considered weak.
This implies that McDonalds is externally weak and is not at par in terms of performance with
respect to external factors. It neede to get at least a score of 2.5 in order to be ranked as average.
It can be concluded, that the company’s performance is weak due to a highly saturated market,
and the lack of differentiation in the products. The effect of social factors are prominent too. The
company should work on being more and more customer centric as well.
The company should work on the opportunities as they can lead them to be externally strong.

Some of the competitive opportunities and threats that need to be seriously addressed are the
threats increasing number of competitors and decreasing market share as customers are also
switching to substitutes. This can be dealt by encouraging more brand loyalty by introducing
healthier options for customers so they will not switch to other competitors with better options or
substitutes.

Another opportunity that can be addressed is expansions of healthy beverages and fresh fruit
smoothies, which again will save the switching customers. McDonalds can also use advertising
as a tool to launch some healthier menus which will help the, catch customers’ attention.

Another opportunity that can work well for McDonalds in Pakistan is to update their technology
in Pakistan, they have already some really good technological services in other countries but
expanding them to Pakistan will help them catch the youngsters attention who are highly techno
savvy nowadays.
With entering different countries and globalizing, McDonald’s faces a threat of different cultural
taste and acceptance. They can change the table and work this in their benefits by being more
creative and launching different product-lines to meet the needs. Its launching of McWrap has
been an unsuccessful attempt. For this, McDonalds should conduct an adequate research and
development to understand the current generation’s needs and preferences

Space Matrix

    Ratings
Financial Position (FP)    
Return on Investment (ROI)   4
Leverage   4
Liquidity   5
Working Capital   5
Cash Flow   5
     
Industry Position (IP)    
Growth Potential   4
Financial Stability   4
Ease of Entry into Market   3
Resource Utilization   4
Profit Potential   5
     
     
    Ratings
Competitive Position (CP)    
Market Share   -3
Product Quality   -1
Customer Loyalty   -3
Technological know-how   -2
Control over Suppliers and Distributors   -2
     
Stability Position (SP)    
Rate of Inflation   -3
Technological Changes   -2
Price Elasticity of Demand   -2
Competitive Pressure   -3
Barriers to Entry into Market   -3
     
Your firm's X-axis   1.8
Your firm's Y-axis   2.0
Competitor 1 KFC  
     
Estimated FP   5
Estimated IP   5
Estimated CP   -2
Estimated SP   -3
     
Competitor 1's X-axis   3
Competitor 1's Y-axis   2
     
Competitor 2 Burge  
r King
     
Estimated FP   4
Estimated IP   4
Estimated CP   -3
Estimated SP   -3
     
Competitor 2's X-axis   1
Competitor 2's Y-axis   1

Internal Analysis Ratings External Analysis Ratings

Financial Position Stability Position
(FP) (SP)

Return on Investment 4 Rate of Inflation -3

(ROI)
Leverage 4 Technological -2
Changes
Liquidity 5 Price Elasticity of -2
Demand
Working Capital 5 Competitive Pressure -3
Cash Flow 5 Barriers to Entry into -3
Market
Average 4.6 Average -2.6

Internal Analysis Ratings External Analysis Ratings

Competitive Industry Position
Position (CP) (IP)
Market Share -3 Growth Potential 4
Product Quality -1 Financial Stability 4
Customer Loyalty -3 Ease of Entry into 3
Market
Technological know- -2 Resource Utilization 4
how
Control over Suppliers -2 Profit Potential 5
and Distributors
Average -2.2 Average 4

7.0

5.0

3.0

1.0 1

1.0 1

-7.0 -5.0 -3.0 -1.0 1.0 3.0 5.0 7.0

-1.0

-3.0

-5.0

-7.0
Grand Strategy Matrix

First Quadrant:
If the company is in the first quadrant, you have a good competitive advantage and the
competition is growing rapidly. This is arguably the best quadrant to be in, with plenty of
opportunities and a solid place.
Second Quadrant: 
If the company is in this quadrant, you have a comparatively poor competitive position as a
company, but there are plenty of prospects and growth to be found in the industry. The tactics in
this job are all about why you aren't making the most of your situation. If you're in this quadrant,
you know there are things you can do to boost performance.
Third Quadrant:
Being in the third quadrant indicates a poor competitive situation as well as a sluggish economy.
This is a difficult situation when you are still struggling and there isn't a big chance that the
second quadrant offers. If you find yourself in this situation, you must make significant
improvements to boost your strategic advantage. Think about cost savings, differentiation, or
diversification.
Fourth Quadrant:
If you're in the fourth quadrant, you've got a lot of competition, which is awesome, but the
demand isn't or declining. This lends itself to diversification plans so you have the funds to
experiment in a variety of areas until the industry downturn becomes unsustainable. Keep an eye
out for lower-cost rivals that would want to dethrone you as the industry leader.

McDonald's has a strong competitive presence, with its biggest rival being KFC, and both firms
compete hard in costs, promotion, positioning, and so on. But McDonald's current business
growth is sluggish and there is not room for fast food franchises to expand on the market because
of many economic factors. The reason for the slow sales performance is that there has been little
related or unrelated market diversification, which has made McDonald the fourth quadrant.
This indicates a diversification strategy for the business, including the entry into the drinks
market, smoothies, juices, or irrelevant diversification, for example in the hotel industry. Today,
McDonald's still focuses on retaining its solid competitive advantage by emphasizing its
offerings on fast meals. If, though, it was to diversify to join more product categories, it may
have been very likely to have extended the risk to more than just a few goods. While this would
help it win market share, loyal customers, and make it profitable, there would be no way to
diversify the risk in the longer term.
 Rapid Market Growth

Quadrant II Quadrant I

Strong
Week Competitive
Competitive Position
Position

Quadrant III Quadrant IV

I
Slow Market Growth