Name: MOR 497-163 — Strategic Management Final Examination — Version A PLEASE TURN OFF ALL ELECTRONIC DEVICES AND PUT AWAY EVERYTHING NOT ALLOWED FOR USE DURING THIS EXAMINATION. PLEASE TURN IN ALL PAPERS TO RECEIVE CREDIT FOR THIS EXAM ‘The work submitted to specifically answer the questions in this exam is entirely my own. | have not consulted with, discussed, or collaborated with anyone in any form, or manner, in writing the answers to the questions in this exam. | understand the penalty for not fully complying with these requirements is receiving zero credit for this examination. Please print your name: Signed: Part 1: McDonald's Corporation ‘The McDonalds case allows you to apply many (not all) of the frameworks and thinking processes we have discussed through the semester. Consider yourself as the decisionmaker (Steve Easterbrook) OR as a consultant who needs to make sense of the situation and develop plans for improvement moving forward. Stay focused. Time invested in analyzing the problems will lead you to a well considered plan for rescuing this company. Please read all the questions before you commence to answer any questions. There is a beginning to end sequence or flow to the question order: Analysis, Formulation, Implementation. Instead of lengthy, verbose prose you may utilize bullet points, diagrams, lists, etc. in presenting your response to each of the questions. Demonstrate your understanding and analysis with insight and accuracy.1. External Environment (15 Points) Which elements in McDonald's external environment are likely to have the greatest impact on the company’s ability to sustain a competitive advantage? What is the impact on profitability? Why? Which external element{s) is/are McDonald's able to mitigate or resolve?2. Strategic Group Map (10 points) Select a couple of dimensions (variables) which illustrate the comparisons between McDonald's and each of its competitors. Include any mobility barriers which may exist. Please label each axis and represent each firm with a circle containing its name.cAym pue pauonisod jjam asow AnuassN9 S) OUN, ‘Snuog upqung, syonquers essed spodio ‘Aemans au Je8ing s,ApuaM S,pIeUOG2W | _21511012e1e49 YO aInqINIY ‘aynqune yee uo aed ayy SS0.3 Swuay ay JO Y>eD a1edwoD UaYy “(ULUN]O9 ysoU! ya] a4) UI “219 ‘NUAL UO Sula} ‘az}s J@yJeUI ‘sJa;INO Jo JAqUINN :se Y>ns) arnquNe Ue aM “aseo ay} Ul pauoUaW (UMOG 11S Jense9 3Se4 — a2Iniag 21ND) sjUaUIBas aya Jo YDeE 104 sIskJeUY JOadWOD “¢4, Business Level Strategy (15 points) What business level strategy does McDonald’s employ (differentiator or low cost)? Is their approach effective? Do they have a competitive advantage? Please explain?5. International strategy (10 points) ‘To what degree does McDonald's standardize its vast global enterprise versus adapt to local conditions? ‘What is common versus what is different worldwide? Common to all markets Different in various markets 1n of McDonald's international Based on your analysis: What is the most accurate term / desc strategy? ‘re the management changes made by Easterbrook consistent with the implementation of this type of international strategy?6. Challenges & Recommendations (20 points) ‘What are your recommendations for McDonald's going forward to return this company to profitability? Please be specific.Part 2: Ethics and Governance (10 points) ‘The following questions on are drawn from the reading in the textbook and not from the LEGO case study. Circle the best answer among each set. 1. Which of the following is true of stakeholders in a public stock company? A. They directly supervise and coordinate the manufacture of products and delivery of services. 8. They are granted a charter of incorporation by the state and legally own company stock C. They are the centerpiece of corporate governance. D. They are appointed by a board of directors to oversee the company’s management. 2. According to Michael Porter, which of the following is a problem with may publicly traded companies? A. Shareholders of publicly traded companies do not have a legitimate claim on profits. 8. Many publicly traded companies have defined value creation too narrowly in terms of financial performance, . There is no transferability of stock ownership in publicly traded companies. D. The legal owners of publicly traded companies also make management decisions for the company. 3. Which of the following perspectives best supports the Shared Value creation framework? ‘A. Markets are more often than not defined by societal needs rather than economic needs. 8. Failing to create value for society almost always reflects on the bottom line ._Afirm’s competitive advantage depends on pitting economic and societal needs in a trade-off D. Externalities such as pollution, wasted energy, and costly accidents usually create internal costs. 4, Why does Michael Porter recommend expanding the customer base of an organization in terms of the Shared Value framework? ‘A. Doing so could yield significant business opportunities that could improve the standard of living of the poor. B. Doing so is the best way to ensure that shareholders have the most legitimate claim on profits made by the organization C. Doing so could be the only way to meet shareholder expectations in a highly competitive market. D. Doing so will help to prevent the inclusion of more nontraditional partners into internal firm value chains. 5. The informational advantage that agents possess over principals is often based upon the fact that ‘A. The information is extremely secure and protected from exposure to anyone outside the company, B. Public stock companies are characterized by information symmetry. Insiders are the first to learn about important developments before the information is released to the public. D. Agents are legally permitted to freely trade the information in exchange for benefits, unlike principalsth of the following is true of business ethics? Certain notions such as fairness, honesty, and reciprocity are universal norms. Business ethics is an agreed-upon code of conduct in business, based on laws. The perception of what is ethical and what is not is similar across different cultures. Business ethics needs to be codified into law in order to be followed, ones 7. Ethics is: ‘A. Not synonymous with law. B. Impossible to codify into law. €. Always universal and cannot differ between cultures. D. The minimum acceptable standard in business practice. 8. Which of the following is true of the codes of conduct of an organization? ‘A. They detail how the organization expects an employee to behave and to represent the company in business dealings. B. They are a reiteration of the laws pertaining to business dealings in a corporate environment. C. They are a guide to determine what is lawful and what is unlawful. D. They help the board of directors and the CEO implement shareholder capitalism, 9. One of the ways to foster ethical behavior in employees is to: A. Avoid codifying organizational culture. 8. Create a contro! system that encourages desired values, C. View clients as counter parties to transactions. D. Align the vision statement of the organization with its informal culture. 10. Which of the following is an implic and a company’s success? A. Very few and specific corporate governance mechanisms can be effective in addressing the principal-agent problem. 8. Effective corporate governance and solid business ethics are critical to gaining and sustaining competitive advantage. Leading by ethical example often has a less strong effect on employee behavior than words. D. A firm that restricts its responsiveness to stockholders (and no other stakeholders) and keeps them committed to its vision will be successful n for the strategist in the context of corporate governance