McDonald’s Strategic Plan

Submitted to:
Dr. Naseem Bukhari
Submitted by:
Muhammad Azeem - 07
Arshiya Arif - 20
Zoya Batool - 25
Subject:
Strategic Management
Semester:
BBA Hons. (Morning)
7th Semester
Submitted on:
October 12, 2023

Institute of Business Administration, Lahore

Contents
Introduction ................................................................................................................................ 4
Vision ......................................................................................................................................... 4
Mission ...................................................................................................................................... 4
Critique on Mission and Vision Statements ................................................................................ 4
Criticism ................................................................................................................................. 4
Suggested Mission and Vision Statements ................................................................................ 5
Vision Statement: ................................................................................................................... 5
Mission Statement: ................................................................................................................. 5
Internal Factor Evaluation (IFE) Matrix ....................................................................................... 7
External Factor Evaluation Matrix..............................................................................................10
Competitive Profile Matrix (CPM) ..............................................................................................12
Analysis .................................................................................................................................12
SWOT Matrix ............................................................................................................................13
S-O Strategies .......................................................................................................................13
W-O Strategies ......................................................................................................................13
S-T Strategies .......................................................................................................................13
W-T Strategies ......................................................................................................................13
SPACE Matrix ...........................................................................................................................14
Matrix ....................................................................................................................................14
Analysis .................................................................................................................................15
Strategies ..............................................................................................................................15
Grand Strategy Matrix ...............................................................................................................16
Strategies ..............................................................................................................................16
1st quadrant - Aggressive ..................................................................................................16
4th quadrant - Conservative ...............................................................................................16
3rd quadrant - Defensive....................................................................................................17
Y-axis - Competitive ...........................................................................................................17
The Boston Consulting Group (BCG) Matrix .............................................................................18
Strategies ..............................................................................................................................18
Product Innovation and Development: ...............................................................................18
Market Expansion: .............................................................................................................18
Strategic Partnerships and Alliances ..................................................................................18
The Internal-External (IE) Matrix ...............................................................................................19
Strategies: .............................................................................................................................19
Leverage Internal Expertise: ..............................................................................................19
Strategic Partnerships ........................................................................................................20
Market Expansion: .............................................................................................................20
Product Innovation: ............................................................................................................20
Acquisitions and Mergers: ..................................................................................................20
The Quantitative Strategic Planning Matrix (QSPM) ..................................................................21
Analysis .............................................................................................................................23
Introduction
McDonald’s is one of the largest fast-food restaurant franchise in the world, McDonald's serves
more than 69 million people every day across more than 100 countries and operates 40,000
locations, established in 1940. They changed the name to a milkshake and hamburger eatery in
1948. The effective fast-food system that is widely used in today's world originated from this
technique.

Vision
To move with velocity to drive profitable growth and become an even better McDonald’s serving
more customers delicious food each day around the world.

Mission
To make delicious feel-good moments easy for everyone.

Critique on Mission and Vision Statements

In general, McDonald's mission and vision statements are clear and concise. They are
straightforward, succinct, and aspirational. The vision statement highlights the company's
objectives and strategies for achieving them, while the mission statement concentrates on the
McDonald's USP client and what the company hopes to become for them.

This mission statement's emphasis on the needs of the consumer is one of its main features. Its
main goals are to satisfy consumers' needs and give them an excellent experience. This is
significant since McDonald's ability to draw in and keep consumers determines how satisfied it
is.

The mission statement's specificity is another strength. It declares that McDonald's aims to
become the patrons' go-to spot for food and beverages. This is a realistic objective that the
business can strive for.

Additionally, well-written is the vision statement. It is ambitious and establishes high standards
for the business. Profitability is another major emphasis, which is crucial for any kind of firm.

Criticism
The mission and vision statements could be criticized for not being precise enough. The kinds of
meals and beverages that McDonald's hopes to provide are not specified in the mission
statement. The particular route the business will take to accomplish its objectives is not stated in
the vision statement.
Suggested Mission and Vision Statements
Here are some suggestions to make the mission and vision statements better suited containing
the for McDonald's:

Vision Statement:

To lead the world in quick-service restaurant technology, offering our patrons an exceptional
dining experience while producing steady profits for our investors.

Mission Statement:
To be our clients' preferred spot to dine and drink by providing tasty, reasonably priced cuisine
and beverages in handy places all around the world.
Internal Audit

Strengths Weaknesses
1. Household brand name, reputation and
imagery

2. Higher net profit margin

1. Negative public perception of food healthiness
3. Globalization: Robust international
footprint 2. High staff turnover: Retention problem

4. Training program for managers in 3. Vulnerability to changing consumer preferences

Hamburger University
4. Legal and regulatory actions related to health-related
5. Focus on 4Ps of marketing: Product,
Place, Price & Promotion issues; use of beef oil & trans fat

6. Solid financial standing and performance 5. Supply chain vulnerabilities

7. Innovation in product offerings 6. Analyzing the needs of customers

8. Customer-centric approach

9. Strong performance in the global &

regional marketplace

10. Standardized quality products

..
Internal Factor Evaluation (IFE) Matrix
The Internal Factor Evaluation (IFE) Matrix involves a comprehensive analysis of McDonalds
internal factors. Internal factors can be the dimensions of the following major internal operations:
management, marketing, finance, operations, research and development

Key Internal Factors Weight Rating Weighted Score

Strengths
Household brand name, reputation and imagery .12 4 .48

Higher net profit margin .10 4 .40

Globalization: Robust international footprint .04 3 .12

Training program for managers in Hamburger .04 3 .12
University

Focus on 4Ps of marketing: Product, Place, Price .12 4 .48

& Promotion
Solid financial standing and performance .08 4 .32
Innovation in product offerings .06 4 .24
Customer-centric approach .06 4 .24
Strong performance in the global & regional .08 4 .32
marketplace.
Weaknesses
Negative public perception of food healthiness .08 1 .08
High staff turnover: Retention problem .04 1 .10
Vulnerability to changing consumer preferences .04 1 .04

Legal and regulatory actions related to health- .04 2 .08

related issues; use of beef oil & trans fat
Supply chain vulnerabilities .04 2 .08
Analyzing the needs of customers .06 1 .06

Total 1.00 3.16

Analysis

IFE demonstrates a robust internal strategic position with a total weighted score of 3.16 out of a
possible 4.00.
 Strengths include a strong brand reputation, solid financial performance, and a customer-centric
approach.
 These strengths position McDonald's favorably in the market, allowing it to capitalize on its
household brand name and global presence.
 However, weaknesses such as negative public perceptions regarding food healthiness and high
staff turnover need to be addressed.
 Addressing these weaknesses is critical for McDonald's to sustain its competitive advantage and
further enhance its market position.
 The IFE Matrix underscores the importance for McDonald's to leverage its strengths while
proactively addressing its weaknesses to drive continued success and growth in the dynamic
fast-food industry.
External Audit
External audit helps to find and analyze the existing and unforeseen opportunities and the looming
threats in the general and broad market. Once the opportunities are identified, only then we can decide
we can leverage them for our benefits or they are not worth looking into it. While scanning the external
environment, we also do a thorough analysis of the threats that can create hostile scenarios for our
company. Following is the external audit for McDonad’s:

Opportunities Threats
1. Consumer activists accuse McDonald's of
1. Respond to social changes - innovative contributing to the country’s health issues
offerings in the healthier lifestyle foods of obesity, diabetes, heart attacks, and high
sector cholesterol

2. More globalization, expansion in other 2. The relationship among franchise dealers

countries and McDonald’s

3. Acquisition and diversification of 3. Market share & brand equity challenges by

competitive quick-service restaurants. competitors

4. Fast-paced growth of the fast-food 4. Anti-Israel and anti-America sentiments

industry as a whole

5. Worldwide deregulation 5. Recession and fluctuating economic

situations
6. Low cost menu that will attract the
customers 6. Recession or down turn in economy

7. Freebies and discounts. 7. New entrants in the industry

8. Joint ventures with retailers or 8. Rising expectations regarding health

acquisitions standards
External Factor Evaluation Matrix

Key External Factors Weight Rating Weighted Score

Opportunities
Respond to social changes - innovative 0.08 3 .24
offerings in the healthier lifestyle foods
sector

More globalization, expansion in other 0.12 4 .48

countries
Acquisition and diversification of competitive .04 3 .12
quick-service restaurants
Fast-paced growth of the fast-food industry as a .10 3 .30
whole
Worldwide deregulation .04 2 .08

Low cost menu that will attract the customers .08 2 .16

Freebies and discounts .08 1 .08

Threats
Consumer activists blame McDonald's of 0.10 3 .30
contributing to the country’s health issues of
obesity, diabetes, heart attacks, and high
cholesterol
The relationship among franchise dealers and 0.09 3 .27
McDonald’s
Market share & brand equity challenges by 0.12 4 .48
competitors
Anti-Israel and anti-America sentiments .07 2 .14

Recession and fluctuating economic situations .04 3 .12

Rising expectations regarding health standards .04 2 .08

Total 1.00 2.85
Analysis
EFE shows that McDonald's faces a moderately favorable external environment with a total weighted
score of 2.85 out of 4.00.
 Opportunities include responding to social changes with healthier offerings, globalization, and
the fast-paced growth of the fast-food industry.
 Threats consist of consumer activism on health issues, challenges in franchise relationships, and
competition impacting market share and brand equity.
 Additionally, threats include anti-Israel and anti-America sentiments and economic fluctuations.
 McDonald's must leverage strengths and opportunities while addressing external threats to
maintain competitiveness and sustain growth in the fast-food industry.
 Competitive Profile Matrix (CPM)
The CPM is a strategic management tool used to compare a company with its key competitors
while enlisting the critical success factors. In this analysis, we have considered the following
factors for success: Price, financial positon, consumer loyalty, promotion, R&D, global
expansion, management, innovation. These factors will help us evaluate McDonald’s
competitiveness with other key competitiors.

McDonald's Burger King KFC

Weighted

Weighted

Weighted
Weight

Rating

Rating

Rating
SIcore
Critical Success

Score

Score
Factors

Price .08 4 .32 3 .24 3 .24

Financial
.05 3 .15 3 .15 2 .1
Position
Consumer
.15 4 .6 4 .6 3 .45
Loyalty
Promotion .14 4 .56 2 .28 3 .42
Product Quality .10 3 .3 3 .3 4 .4
Innovation .10 4 .4 3 .3 4 .4
Market Share .10 3 .3 3 .3 3 .3
Management .10 4 .4 3 .3 3 .3
Global Expansion .08 4 .32 4 .32 3 .24

R&D .10 4 .4 3 .3 3 .3
Total 1 3.75 3.09 3.15

Analysis
 McDonald’s appears to have a competitive advantage over all the listed competitors with a
score of 3.75. It can be implied that it is doing best to gain competitive advantage over others.
 Burger King’s score, 3.03, suggests that it is facing some issue in the market.
 KFC falls between McDonald’s and Burger King in term of utilization of the resources with a
score of 3.15. With a more focused strategic management, it can be gain more market share
than the McDonald’s.
SWOT Matrix

S-O Strategies
1. Prioritize a Winning Strategy to entice customers and expand operations internationally.
2. Enhance market share through increased investments in Asia to facilitate expansion.
3. Leverage household brand name and reputation (S) to respond to social changes and innovate
offerings in the healthier lifestyle foods sector (O).

W-O Strategies
1. Reduce customer losses by offering a cost-effective menu and discounts.
2. Address high staff turnover (W) by implementing a comprehensive training and retention program
for employees, tapping into globalization opportunities (O) to offer career growth prospects and
international assignments

S-T Strategies
1. Enhance oversight of franchise dealers to uphold McDonald's reputation and ensure quality
standards.
2. Introduce new products and foster innovation to continually evolve the offerings

3. Utilize strong performance in the global and regional marketplace (S) to mitigate threats from market
share challenges by competitors (T) through aggressive marketing and brand-building efforts

W-T Strategies
1. Address supply chain vulnerabilities (W) by forming strategic alliances with suppliers to mitigate
threats from market share challenges by competitors
2. Improve operational effectiveness and adherence to health standards to counteract the public's
unfavorable perception of food healthiness (W) and legal/regulatory obstacles (T).
SPACE Matrix
Financial Strength Rating Environmental Stability Rating
ROI 4.0 Rate of inflation -4.0
Leverage… 4.0 Demand fluctuations -3.0
Net Income 6.0 Price Elasticity of demand -1.0
Earnings per Share 5.0 Competition -2.0
Return on Equity 5.0 Entry barriers -3.0
Cash Flows 4.0 Risk factors -2.0
Average 4.67 Average -2.5
Y Axis 2.17
Competitive Advantage Rating Industry Strength Rating
Growth Prospects 5.0
Quality of Products -1.0 Financial Performance 5.0
Customer Loyalty -1.0 Entry Barrier 4.0
Control over Supply Chain -2.0 Capacity Utility 3.0
Share of Market -1.0 Profit Growth 5.0
Demand Fluctuations 4.0

Average -1.250 Average 4.330

X Axis 3.080

Matrix
Analysis
The SPACE Matrix assesses the strategic position of McDonald's and its competitors based on
Financial Position (FP), Stability Position (SP), Competitive Position (CP), and Industry Position
(IP).
 McDonald's demonstrates a strong financial position, stability, and industry position, with
estimated ratings comparable to its competitors.
 However, McDonald's competitive position is slightly weaker compared to competitors,
indicating potential areas for improvement in its competitive strategies.
 McDonald's position on the X-axis suggests a balanced financial and industry position relative to
competitors.
 On the Y-axis, McDonald's position indicates a moderately favorable competitive and stability
position compared to competitors.
 Overall, the analysis highlights McDonald's strong financial and industry positions but suggests
opportunities for enhancing competitive strategies and maintaining stability factors to sustain
its strategic position in the market.

Strategies
 Market Penetration: Aggressively expand market share by increasing sales to existing customers
or attracting new customers through promotional offers, loyalty programs, or pricing strategies.

 Product Development: Innovate and introduce, new menu items, flavors, and meal options to
cater to altering consumer preferences and attract a broader customer base.

 Market Development: Discover opportunities to enter new geographical markets or expand into
underserved areas by opening new stores or entering strategic partnerships with local
businesses.

 Horizontal Integration: Acquire or merge with complementary businesses in the fast-food

industry to consolidate market power, access new distribution channels, or diversify product
offerings.
Grand Strategy Matrix
The Grand Strategy Matrix is a strategic tool that helps businesses in evaluating their growth
strategies based on their competitive position and market growth potential. This matrix classifies
strategies into four quadrants—Aggressive, Competitive, Defensive, and Conservative—guiding
organizations in bring into line their actions with their internal capabilities and external
opportunities.

Strategies

1st quadrant - Aggressive

 Making usage of the well-known brand and solid financial results to aggressively increase market
share through creative product offerings and forceful advertising campaigns.
 Improving the public's unfavorable opinion of food safety by offering healthier menu options and
giving patrons clear access to nutritional information.

4th quadrant - Conservative

 Concentrating on preserving a strong financial position and profitability through cost-control and
operational efficiency optimization.
 Improving brand reputation by proactively implementing healthier cooking techniques and
ingredients in response to legal and regulatory challenges pertaining to health concerns.
3rd quadrant - Defensive

 Investing in robust supply chain management systems and increasing sourcing options to
mitigate supply chain vulnerabilities and guarantee business continuity.

 Adapting to growing demands for health standards by putting in place thorough quality control
procedures and obtaining ingredients from reliable vendors.

Y-axis - Competitive

 Leverage the trend of globalization and aggressively expand into emerging markets to capitalize on
the fast-paced growth of the fast-food industry in the region.

 Grow market share and brand equity by implementing targeted promotions, advertising campaigns,
and pricing plans.
The Boston Consulting Group (BCG) Matrix
Units are divided into four quadrants: Stars, Question Marks, Cash Cows and Dogs. This
classification provides guidance on resource allocation and segment management for the best
possible growth and profitability.

Strategies
Product Innovation and Development:
 To content the changing demands and tastes of consumers in these markets, keep innovating
and producing new goods and services. This could be adding plant-based food options to the
menu, investigating plant-based food trends, or customizing the offerings to suit regional
preferences.
 Introduce new products and foster innovation to continually evolve the offerings

Market Expansion:
Increase market share through increased investments in Asia to facilitate expansion

Strategic Partnerships and Alliances

Establish strategic alliances or partnerships with other companies or suppliers to improve operational
effectiveness and market position. This could involve working together with neighborhood farmers to
source ingredients or forming alliances with delivery services to increase accessibility.
The Internal-External (IE) Matrix
The Internal-External (IE) Matrix, often used in strategic management, is a great tool intended to
assist organizations in assessing and prioritizing their strategic options. This matrix measures
the internal and external variables that can affect the competitive position and performance of a
business. While the market growth rate, industry competition, and regulatory environment are
among the important external factors that are analyzed, internal factors like financial strength,
technological capabilities, and managerial expertise are also taken into account.

Strategies:

Leverage Internal Expertise:

To lead growth initiatives, identify and make use of the organization's current resources, talents,
and skills. To promote innovation and market expansion, this may entail utilizing specialized
knowledge, technological prowess, or operational efficiencies.
Strategic Partnerships
To gain access to new markets or technologies, cooperate with outside partners like
distributors, suppliers, or companies in related industries. Without requiring a sizable initial
outlay of funds, strategic alliances can open doors to new markets, product and service
complements, or customer segments.

Market Expansion:
To find unexplored prospects for domestic and international expansion, conduct in-depth market
research. Create focused strategies to penetrate new markets or demographic groups, keeping
in mind variables like consumer demand, the competitive environment, and legal constraints.

Product Innovation:
To innovate and improve current products or create new offerings that cater to changing
customer needs and preferences, invest in research and development. Concentrate on
developing distinctive value propositions to set your products apart from rivals and gain market
share.

Acquisitions and Mergers:

Find potential acquisition candidates who have complementary skills or a strong market
presence, and who also fit with the strategic objectives. Acquisitions can ease swift entry into
novel markets, grant access to exclusive technologies, or unite industry participants to attain
economies of scale and a competitive edge.
The Quantitative Strategic Planning Matrix
(QSPM)
Strategy 1 Strategy 2

Enhance market Introduce new

share through products and foster
increased innovation to
investments in Asia continually evolve
to facilitate the offerings
expansion

Key Internal Factors Weightage AS TAS AS TAS

Strengths
Household brand name, reputation and .12 4 .48 4 .48
imagery
Net Profit margin of 56% .10 4 .40 2 .20

Globalization: Robust international footprint .04 4 .12 2 .08

Specialized training for managers known as the .04 - - - -

Hamburger University
Focus on 4Ps of marketing: Product, Place, .12 4 .48 4 .48
Price & Promotion
Solid financial standing and performance .08 4 .32 4 .32

Innovation in product offerings .06 - - - -

Customer-centric approach .06 1 .06 4 .24

Strong performance in the global & regional .08 3 .24 1 .08

marketplace.
Weaknesses
Negative public perception of food healthiness .08 1 .08 4 .32
High staff turnover: Retention problem .10 - - - -
Vulnerability to changing consumer .04 3 .12 1 .04
preferences
Legal and regulatory actions related to health- .04 1 .04 4 .16
related issues; use of beef oil & trans fat
Supply chain vulnerabilities 0.04 - - - -
SUBTOTAL 1.00 2.340 2.400
 Strategy 1 Strategy 2

Enhance market Introduce new

share through products and foster
increased innovation to
investments in continually evolve
Asia to facilitate the offerings
expansion

Key External Factors Weightage AS TAS AS TAS

Opportunities
Respond to social changes - innovative .08 1 .08 4 .32
offerings in the healthier lifestyle foods
sector
More globalization, expansion in other .12 4 .48 1 .12
countries
Acquisition and diversification of competitive .04 - - - -
quick-service restaurants
Fast-paced growth of the fast-food industry as a .10 4 .40 4 .40
whole
Worldwide deregulation .04 4 .16 1 .04

Low cost menu that will attract the customers .08 - - - -

Freebies and discounts .08 - - - -

Threats
Consumer activists accuse McDonald's of .10 1 .10 4 .40
contributing to the country’s health issues of
obesity, diabetes, heart attacks, and high
cholesterol
The relationship among franchise dealers and .09 4 .36 1 .09
McDonald’s
Market share & brand equity challenges by .12 4 .48 4 .48
competitors
Anti-Israel and anti-America sentiments .07 - - - -

Recession and fluctuating economic situations .04 - - - -

Rising expectations regarding health standards .04 1 .04 4 .16

SUBTOTAL 1.00 2.10 2.010
SUM TOTAL ATTRACTIVENESS SCORE 4.440 4.410
Analysis
 With a higher External score, Strategy 1 is better suited for expanding into the
Asian/South East Asian market. To fully take advantage of the external opportunities, the
lower Internal score indicates that there are internal issues that must be resolved, such
as resource utilization or operational efficiency.
 Strategy 2 also shows promise with strong external support for innovation and new
product introductions. While its internal score is slightly higher than Strategy 1, there
may still be areas for improvement internally to fully exploit the external opportunities
presented by this strategy

In conclusion, each strategy typically has advantages and disadvantages. Therefore, in order to
successfully implement these strategies and meet its growth objectives, McDonald's should
focus on resolving internal constraints while seizing outside opportunities.