McDonalds Strategic Plan
THE COMPANY
Vision statement
Mission statement
Company objectives
INDUSTRY ANALYSIS
Market size and characteristics
Competition: Major firms and market share
Key risk and success factors
SWOTT ANALYSIS/INTERNAL AND EXTERNAL ENVIRONMENT
Strengths
Weaknesses
Opportunities
Threats
Trends
APPENDICES
Perceptual map
STRATEGIC PLAN
THE COMPANY
1.1 Vision Statement
Our company’s vision in the next 3 to 5 years is to be the most valuable company to customers and shareholders in every part of the world. The vision states the company’s aim to be the first choice for customers in every corner of the world. This implies gaining dominance in each country where it operates. The vision also entails maximizing shareholders' value by improving the company's profitability. Besides, it shows the goal of improving customers’ value by improving the quality of products and services.
1.2 Mission statement
Our mission is to be the customer’s number one place for coffee and other food and to be the best place to work and to impact the community positively, providing quality foods and services. The mission statement expresses the company’s goal of maximizing customer value by providing quality products and services through innovation and continues product improvement. It also recognizes the significance of employees in its success hence it aims at becoming the best workplace by improving the working conditions of employees. The mission statement also recognizes the company's responsibility to the society.
Company objectives
INDUSTRY ANALYSIS
Market size and characteristics
The fast food industry has grown into a very large industry over the last few years. In the year 2015, the fast food industry in the US generated about $228 billion. The fast food industry is largely controlled by quick service restaurants which contribute to over 70% of the total market share. Over the last years, the industry has been characterized by mergers and acquisitions.
Competitive landscape
The market is highly competitive but is dominated by large corporations. The global leader is Starbucks, followed by McDonald's. However, McDonald's is still, the largest company by revenues in the US fast food market. In 2014, McDonald’s revenues in the US were $35.4 billion, which is more than the Starbuck’s $12.7 billion. Other leading competitors include Subway, Burger King, Yum Brands, among other companies.
In the US coffee shop industry, Starbucks controls 42.4% of the market share while Dunkin Brands control 25.5% of the total market share. Branding and product differentiation are the most common aspect of competition in the industry (Statista, 2017). Each company in the fast food market is striving to provide unique products and services.
Key success factors and risks
Success factors:
Branding: The success of a firm in the industry depends on its ability to brand and differentiate its products. Competition in the industry is mainly based on the quality of products and services. Innovation is essential for survival in the industry. Starbucks, McDonalds, and Subway are good examples of effective branding.
Efficiency: It is not enough for a fast food company to provide high quality foods and services. The cost of operations must be low to enable it to earn profits.
Investment in technology: Technology has become an important driver in the fast food market. It has improved services through online sales, among others. Starbucks has exploited technology advancement to improve the quality of its services. It offers free Wi-Fi at its stores, among other services.
Risk factors
Economic risk factors: Like any other industry, the fast food industry is affected by adverse economic conditions such as a decline in per capita income. A decline in consumers’ income affects the industry by reducing consumers’ purchasing power.
Prices of inputs: fluctuations in world coffee prices is a risk factor. An increase in coffee prices negatively affects the coffee shop industry. Changes in the prices of agricultural products affect the entire fast food industry.
Health concerns: The growth in the number of obese Americans has increased health concerns over the safety of fast foods. This could lead to a shift from fast foods thus adversely affecting the industry.
SWOTTANALYSIS
Strengths
Strong global brand: Starbucks brand is strong and recognized globally. It is the leading brand in the global coffee shop market. It also enjoys the market leadership in the United States market where it controls over 40% of the market.
Quality products: Starbucks provides the finest coffee, among other high quality products. The high quality of the products enables the firm to charge premium prices.
Wide product portfolio: apart from coffee, Starbucks provides other fast foods such as beverages, juices, bottled water, and fresh food, among other products. Besides, it provides the main product, coffee, in different brands as Starbucks, Tazo, Teavana, Seattle's Best Coffee, Starbucks Refreshers, Frappuccino, among others ("Starbucks Coffee, Tea, Drinkware | Starbucks® Store", 2017).
Skilled and motivated workforce: Through training, better compensation packages and employment involvement, among other measures, Starbucks has developed a pooled of trained and motivated employees. The workforce is behind its innovativeness, the quality of services, among other benefits.
Weaknesses
Over-reliance on the US market: Although Starbucks has the largest global market share, the US market is the largest contributor to its total revenues. It could be adversely affected by the decline in demand in the US market.
High product prices: The premium prices limits the firm’s sales to low-income earners.
Opportunities
Technology advances provide opportunities for the company to improve innovations and enhance the quality of its products and services.
There are opportunities for growth and expansion in emerging economies such as China and other Middle East economies as well as in African economies.
Threats
Increased competition from both large and small firms such as McDonald's, Yum Brands, among other companies.
Volatility in input prices: Increases in coffee prices lead to higher costs of production thus reducing the firm’s profitability.
Changes in consumers'' tastes: a shift in consumers' consumption behavior due to heath concerns may lead to a fall in the firm’s revenues.
Trends
Fast-casual dining: It provides food at the same speed and convenience of fast food companies. It is growing popular and it will affect the industry negatively.
Increase in office and home deliveries. Customers value convenience and some prefer to be served in the comfort of their homes or offices.
Increasing preference for healthy foods: consumers are increasingly getting concerned about their health. Fast food companies may experience a decline in customers if they improve on that.
4.0 Perceptual Map
I prefer this criterion since price and quality are the most critical factors in the determination of the demand for a brand. This criteria shows the positioning of Starbucks products in terms of price and quality and in comparison with other brands. The above map shows that Starbucks high quality of products makes it possible to sell at higher prices and still attract many customers.
References
Starbucks Coffee, Tea, Drinkware | Starbucks® Store. (2017). Store.starbucks.com.
Retrieved 15 January 2017, from http://store.starbucks.com/coffee/?utm_source=sbuxcom&utm_medium=coffeemega&utm_campaign=our+coffees&utm_content=evergreen&cm_mmc=sbuxcom-_-coffeemega-_-our+coffees-_-evergreen
Statista, C. (2017). Topic: Coffeehouse industry. www.statista.com. Retrieved 14 January
2017, from https://www.statista.com/topics/1670/coffeehouse-chain-market/
