History of the Company, Mission, Vision, Strategies
IN 1954, the first McDonald’s restaurant was opened in San Bernardino, California. It was run by Dick and Mac McDonald (Neate 1). It is essential to refer to the fact that this business entity operates in the area of restaurant business, while practicing such business approach as franchising. The locally-relevant menu of the foods and beverages at different acceptable and affordable levels of prices is offered in the set of these restaurants all over the world (more than in 100 countries). As it has been already stated, the global system of this company is composed of the restaurants, which are owned by the company, as well as of franchised ones is in compliance with the developmental license, conventional franchise or affiliate. It is essential to note that the business interrelations between the independent franchisees and McDonald’s is referred by the top management of the company as the critically important aspect as it is integrated into the Brand of McDonald’s as well as general performance of this multinational business entity. Such business practice is mainly grounded on the agreements between the franchiser and franchisee, which oblige to the strict adherence to the practices, standards and policies, which are critical for the brand protection and its maintenance (Kaufmann and Lafontaine 417-453).
The business philosophy of McDonalds’ may be represented in the following manner - this company views itself as the franchisor – as the independent franchisees operate and own the lion share of its restaurants (up to 82%). Such business strategy implies the following options for the individuals - they may own the restaurant (within the business network), while controlling the supply chain, HR deportment, pricing and marketing solutions, at the same time, such independent individual business unit benefits from the globally-recognized brand of this fast food chain, its financial resources and system of operation.
One of the core strong points of this business is the fact that the professional expertise is gained by the owners of individual units from the restaurants, which are owned by the company. Such approach implies an option for the McDonald’s in terms of improvement of its operations and reaching the higher success points of all its restaurants (both company-owned and franchised). In addition, the innovative business solutions are tested by the franchisees and in the case if they are perceived by the top management as the effective and attractive ones, they are launched into the business strategy of the relevant restaurant (McDonald’s Corporation 1)s.
The revenue stream of this company is mainly contributed by the conventional franchisees - via such sources as the royalties, which are grounded on the percent of sales and the rent payments. The typical durability of the conventional franchise arrangement is set for 20 years, while there are the common practices of the franchising all over the world. The operational activity of more than 70% of the franchised restaurants is based on the arrangements of the conventional franchise
Vision Statement
In general terms, the vision statement of this business entity may be represented in the following manner - becoming progressive and modern burger company, which specializes on delivering of the contemporary customer experience(McDonald’s Corporation 1). Modern, in this case, refers to the development of the brand to the stage, which is urgent and actual in the contemporary world and progressive means achievement of such level of development, when the client’s tomorrow expectations are known today and matched in time. For the practical implementation of such vision, the major focus of the business development is put on the delivering high-quality food with a great taste to the target audience. The set of the business aspects is covered by the vision statement of McDonalds. From the perspective of community, such approach refers to such type of innovation, which has the potential of satisfying the current needs of the market. In addition, the products, offered by this company, are characterized in the scope of their vision statement as the tasty and high quality ones. Finally, the business approach towards strategic development refers to the ‘progressive and modern’ (Mullane 448-455)
Mission Statement
Official mission of this company is becoming clients’ favorite place for drinking and eating. In addition, McDonald’s is tending to become the favorite employer and represent the positive and strong presence in the local communities; finally, the set of attempts are to be done for delivering services and foods of the high quality (McDonald’s Corporation 1).
In the scope of the mission statement the set of the details, regarding the market position, is represented. It may be traced from the following phrase of the original mission statement “favorite place and way to eat & drink”. In addition, the approach towards management of the human resources is highlighted in it -“great place for our people to work”. The corporate social responsibility is also covered by the mission statement – in terms of the positive presence in the communities; all other parts of the mission statement pertain to the character of offered product and services as well as the image of its bran (Meyer 1)
SWOT Analysis
It is essential to note that the strong market position is maintained by this business entity in the global scales in the industry of the fast food restaurant. This SWOT analysis would address the internal and external factors, contributing its success, as well as would represent the major weak points and threats, which are faced or may be faced by this company. The set of various strategies is used by McDonalds for managing and addressing these factors, at the same time, the considerable issues are faced by this company in terms of emerging factors of influence of the global market.
Strengths
These strengths make McDonalds the leader in the global fast food industry:
Moderate diversification of the market
Strong image of the globally-recognized brand
Widely applied processes of standardization
As it has been already discussed, the strong image of McDonald’s brand adds the competitive advantage to this company. The next factor - the market diversification, is mainly derived from the presence of this firm in the lion share of the regions all over the world. In such manner the risks, based on the particular markets, are minimized. Finally, the comprehensive system of standardization makes the set of significant contributions to the efficiency of this business as well as the consistency of the offered products and services.
Weaknesses
There is a direct interrelation between the market focus, processes and products of this company and its business weaknesses.
The core weaknesses of McDonalds may be represented in the following way:
Limited flexibility of the business process;
Low diversification of the offered product line;
Vulnerability to decline in the Western market
While the consistency of McDonalds is ensured by the fact of the business standardization, the flexibility of the business is put under the risk of its decreasing – as the set of complications in addressing the market changes, emerges. Low rate of diversification in its product line makes McDonalds is caused by the focus of this business entity on the beverage and food products, on such manner, this business faces with the set of threats of the restaurant industry decline. Additional emphasis should be put on the fact that the major part of the revenues comes from the Western markets and from US. This trend may be refereed as the weak point of the company’s development as in such way, the company becomes vulnerable to the economic decline in these regions (McDonald 4-27).
Opportunities
There is a direct interrelation between the opportunities of McDonald’s and its global growth and product mix:
Increasing the market share in the Middle East region;
Expansion of the business in developing countries;
Diversification of the product line,
Threats
The threats of this business entity are derived from the sociocultural trends and competitive rivalry. This particular aspect is mainly related with the set of strategic factors, which create some imitation to the development of this business:
Aggressive competition;
New trend in the lifestyle- healthy diet;
The set of regulations in relation to GMO;
SWOT analysis of McDonalds in 2015-2016
Market Position Relative to Competitors
Currently, there is a high rate of competition in the restaurant business and in the fast food chains in particular. The status of McDonald’s is put under the threat by the aggressive competition. The major competitors of McDonald’s are the following: Darden Restaurants, Inc., Burger King Worldwide, Inc., Domino’s, Inc., Yum! Brands, Inc., Doctor's Associates, Inc., Wendy’s Company, Starbucks Corporation as well as the set of local fast food chains (Jurevicius 1).
Suggested New/Modified Strategy
After conducting a SWOT analysis of McDonald’s (for 2015-2016), it is possible to make a statement that this organization has the potential for maintaining the effective operations, implied by specific of its industry. That is why, the chain of McDonald’s should be additionally expanded in the global scales as well as the diversification of the product line is needed alongside with improvement of the flexibility of this company.
While taking into account the dependence of revenue rate on the Western markets, there is a strategic option of getting additional market share in the developing countries and in the Asian region in particular. Additional emphasis should be put on addressing of the market risks, while developing the new product lines.
Recommendations
After conducting the SWOT analysis, it was indicated that there are the options for McDonald’s in terms of improvement of its business viability through continued global expansion. The major emphasis in this case should be put on the high-growth market. In the case if the new profits are developed, there is an option f minimization of the business risks (Greenspan 1).
Works Cited
Greenspan, R. McDonald’s SWOT Analysis & Recommendations. Panmore Institute, 2015. < http://panmore.com/mcdonalds-swot-analysis-recommendations>
Jurevicius, O. McDonald's SWOT analysis 2016. <https://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html>
Kaufmann, P. J. and Lafontaine, F. “Costs of control: The source of economic rents for McDonald's franchisees.” Journal of law and Economics (1994): 417-453.
McDonald, M. “Strategic marketing planning: theory, practice and research agendas.” Journal of Marketing Management 12.1-3 (1996): 4-27.
McDonald’s Corporation. Company Information. 2015 in Meyer, P. McDonald’s Vision Statement & Mission Statement Analysis. 2015 <http://panmore.com/mcdonalds-vision-statement-mission-statement-analysis>
McDonald’s Corporation. Company Profile. 2015 in Meyer, P. McDonald’s Vision Statement & Mission Statement Analysis. 2015 <http://panmore.com/mcdonalds-vision-statement-mission-statement-analysis>
McDonald’s Corporation. McDonald’s Career Information. 2015 in Meyer, P. McDonald’s Vision Statement & Mission Statement Analysis. 2015 <http://panmore.com/mcdonalds-vision-statement-mission-statement-analysis>
Meyer, P. McDonald’s Vision Statement & Mission Statement Analysis. 2015 <http://panmore.com/mcdonalds-vision-statement-mission-statement-analysis>
Mullane, J. V.. The mission statement is a strategic tool: when used properly. ManagementDecision, 2002, 40(5), 448-455 Meyer, P. McDonald’s Vision Statement & Mission Statement Analysis. 2015 <http://panmore.com/mcdonalds-vision-statement-mission-statement-analysis>
Neate, R. McDonald's: a brief history in 15 facts. 2015<http://www.theguardian.com/business/2015/may/02/mcdonalds-a-brief-history-in-15-facts
