Problem Statement
Don Thompson was made the CEO of McDonald’s in July 2012. The total shares for the company fell from 34.7% to -10.75% during the years 2011 to 2012. Thompson has been under severe pressure to actually overcome this issue in the year 2013. The former CEO, Jim Skinner, who served at McDonald’s for more than 40 years devised the “PLAN TO WIN” strategy, which had turned the fortunes for the company in the past decade or so. The current CEO who was the part of the team developed by Skinner has been looking to recreate the success. The major focus of Thompson has been on improvement to the menu, customers’ experiences and the overall brand.
SWOT Analysis
Strengths Weaknesses
• Brand name
• High quality
• Franchise system
• Competitive prices
• Collaboration with Coke • Declining profits
• Low differentiation
• Increasing employee turnover
Opportunities Threats
• Increase in product profile
• Healthier products
• Adaptation of new practices • Intense competition
• Currency fluctuations
• Customer preference changing
STRATEGIC IMPLICATION
Conclusion: This analysis shows McDonalds is a strong brand name in the market.
Possible. New Strategy: McDonalds need to overcome the issue of low profits by integrating new strategies
Rationale: McDonalds need to focus on retaining employees that are present at the firm.
PEST Analysis
Political Factors
The political condition of McDonalds is quite feasible for the company. With respect to the political aspect the changes and the transformation over a long period of time and the government regulations of the fast food chain have been as per the requirements of the government. Overall, the fast food industry has benefited from the liberalization of the international trade. United States and the European market comprise approximately 70% of the market where it contains fast food chains.
Economic Factors
The constantly increasing fuel prices in the international arena have made the overall increase in prices for various goods. Therefore, McDonalds has to find ways to actually reduce the cost of delivery. With the increase in the wage rate of employees in the United States, the costs of fast food where they offer cheaper products have affected the company. However, the economic development of McDonalds after the recession of 2008 has actually helped the company to revivefrom the after effects quite efficiently.
Socio Factors
As per the American community survey for the five year period of 2008-2012, the majority of the population in the US, i.e. 41%, is in the age range of 25 years to 54 years of age. Where each age group (25 to 34 years, 35 to 44 years and 45 to 54 years) has an average share of 13.7%. Additionally, the US population between the ages 18 years to 64 years 48.6% consists of 48.6% males and 56.8% females. In addition to this, the population above the age of 64 years consists of 43.2% males and 56.8% females.
Technological Factors
Technology has been the main driving force at McDonalds. It has had a direct and a positive impact on the company and its sales. Research has indicated that people prefer eating fast food in an uncomplicated ambience.McDonalds has an online portal to order good or food items as well...........................
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