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Week 6 Assignment 2

Student Full Name

Strayer University

BUS499 Business Administration Capstone

Dr. Keller

Dr. Gardner

8/19/2019
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Week 6 Assignment 2

The assignment is based on McDonald’s corporation. The corporation is best known

worldwide in selling of cheap food. The assignment analyzes most of its strengths and

weaknesses and how it can maximize on its advantages in the strengths and fix the significant

weaknesses, an analysis of the company’s tangible resources, threats and segment of general

environment that impact on the corporation.

General Environment

The environmental segments that would rank the highest in the McDonalds corporation is

consumer and its products and services offered. The two segments are inter-depended because

consumer perception towards the corporation is based on the quality of goods and services

offered. The better the services the more customers are attracted to the corporation.

Customers of the McDonalds are very essential part in their operations. McDonald’s has

a very diverse reach of consumers that need be satisfied considering mostly the organization

targets at young people and children who greatly like fast food. Consumer interest are different

considering the place it operates. The corporation ensures it changes its menu to fit the regions it

exists in the 120 countries. The corporation works at providing nutritious food to young people

at affordable prices for them to enjoy and have fun. The segment also allows it caters for all its

consumers including children by providing play grounds to the children (Shahid et al, 2014) and

recreation areas.

The product and services offered by the McDonalds are so diverse considering that in

every country it operates it offers independent menu regarding the interest of the natives but the

products must taste like the McDonalds for the consumers to enjoy, it means they must me

attractive and clean. The retail areas all throughout the globe need to prepare tasty fast food that
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taste like the McDonald’s that work in harmony with the prices. The consumer needs and

satisfactions determine the type of services and products that need be offered so as to delight

their needs.

Five Forces of Competition

Organizations face five forces of competition which are power of suppliers, power of

consumers, potentials bestowed by new market entrants, competition among industries and

threats among substitute products. All these forces affect the McDonalds; however the

assignment analyzes two most significant forces affecting the firm; power of consumers and

power of suppliers.

Item 1

Consumer power in the McDonalds Corporation is based on consumer bargaining power.

The world is in a state where consumer bargaining power is high than ever, consumers bargain

almost everything. The company must find for ways to accommodate all the consumers and

because the McDonalds still exists it means it has a way of concentrating consumers to keep on

coming for more. The company reputation and the reputation of the products matters most in

consumer so as to moderate their bargaining power. The services and products are worth the

image branded by the corporation to its clients hence they are engaged to still come for more.

Item 2

The power of suppliers basing on McDonalds is tie to their bargaining power. The

company deals with low scale farmers who supply agricultural products to the retail stores

around the globe. They follow a strict code of standards laid by the McDonalds in the type and

quality of products to supply because they are not any significant in the production process of

the fast food product and re in small scale they remain intact and insignificant hence have very
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low bargaining power giving the McDonald’s a competitive advantage over its competitors

hence a better financial scout and a greater financial significance

Evaluation

The McDonald’s can curb these forces by making up for the future and acting flexibly

with the forces that affect competition. For instance, it need to treat its suppliers with modesty

because every supplier desires for their organizations to grow and hence competitor can take

advantage by taking away their suppliers by raising the cost of supply and the bargaining power

can increase. Market forces are very dynamic and suppliers can change when the outcome they

get is not to the expectations. As consumer bargaining power increases, the McDonald’s need to

compensate the same by moderating their bargain by the quality, nutritious and clean products

they offer (McDonald 2016). The better the quality and services the less bargaining power. The

McDonalds being among the cheapest hotels, it can maintain its consumers by having better

services, creating a diverse reach of consumers by adding menu which covers more than just fast

food.

Future Improvements

The company can change its tactical relations when it comes to addressing the two

competitive factors, for instance because the suppliers are many and the organizations are

minimal the competition and the prices are very low while the McDonalds benefit by making

large profits. The suppliers since they are also in trade they can drive up input costs and change

the formation of the business hence the organization can have its own firms to supply it with

agricultural products and be more self-sustaining. The use of universal prices for products can

help the company maximize its profits uniformly and prevent complications even when dealing

with consumers with high bargaining power.

External Threats and Opportunities

The greatest threat McDonald’s is facing is government regulation that will greatly

impact on fast foods and the McDonald’s being among the most popular fast food in America

and globally it will mean that the regulation will affect the number of income generated from the

fat foods and the number of restaurants present.

The greatest opportunity is the ventures that are yet to be explored in many countries and

using the menu innovation there are a lot of content not covered, in fact it’s only limited by

imagination. The organization has still so many menus to invest on than those present.

Threats and Opportunities Strategies

The McDonalds are really working on making sure they maintain the reign on being the

most reliable fast food suppliers worldwide and due to their networked chain people globally can

experience the same network and enjoy. Government regulation and forces will be considerate

depending with the interests of the citizens and how the organization abides by the laws.

Maximizing on the opportunities would mean entry to new lands for investments.

Strengths and Weaknesses

McDonald’s has many strengths that enable it thrive so fast worldwide, for

instance it enjoys having the second largest network serving in more than 120 countries by their

restaurants. Subway is the largest quick service restaurant with worldwide network to

consumers. McDonald’s being the second has more than $ 22.820 annual sales. The company

uses this network to enjoy having an economy of sales which enable it offer cheapest places to

eat. The implementation of best practices can be invested broadly due to its vast network

enabling them to have market power over its competitors and suppliers and can sell products at
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low prices controlling prices of the competitors hence creating supremacy and driving

competitors to the correct location because it has a wide range of audience (Çalıyurt, 2019). 

McDonalds enjoys being recognized brand in the restaurant industry. It has been in

existence since 1940 and enjoys reputation and reputation with a reach of up to 120 countries in

the global corporations. The advantage enables the company to spend little if not less amount of

money advertising and can introduce new products with ease and selling the available products

does not become a big deal. A little number of its competitors can reach such a great number of

brand recognition making that a big advantage (Çalıyurt, 2019).

McDonald’s enjoys one efficient system that enables consumers all the globe experience

the same service around the globe. It has a significant taste when it comes to predictability and

consistency in business. McDonald serves 75 burgers every second and serves an average of 810

consumers every second which is a significant god number.

The weakness of McDonald is based on its reliance on semi-skilled workers most who

have high school diploma hence the payment is still low because the job is not satisfying hence

the job is not satisfying and the employees stay not motivated most of the time. The staff needs

training which is expensive and the company cannot offer. McDonalds has always been

associated with unhealthy food hence even if it tries adding healthy products in its meals people

will always associate it with unhealthy food (McDonald 2016).

Strategy
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The company can maximize on its strengths by investing much on the countries that are

still under served such as African countries because it sells food that majority of people can

afford and they can pose competition to its competitors such as KFC and Subway. The company

can add healthy food in its menu such that as people gain more consciousness on healthy food

they are still up to date with the same and will not suffer from customer loss and solve its

weakness puzzle (Hitt et al, 2013).

Resources, Capabilities, and Core Competencies

McDonald has a vast resource both tangible and intangible. The tangible resources

include human resource, physical resources, organizational and financial resources. The physical

resources include the restaurants which are around 31,000 worldwide with the cooking and

storage equipment and ply places for children; the employees provide work forces that provide a

world-class satisfaction to consumers. The financial record of the company is with reference to

the two banks it works with CIMB bank and Maybank. The corporation enjoys many intangible

resources in terms of capabilities ranging from inbound logistics, operations, sales, outbound

logistics and outbound logistics (Qian & Chen, 2019).

The core competences practices by McDonald’s is tied to consumer policy and

convenience than just selling burger and making sure they keep the taste of the burger and food

they sell with highest degree of competence. They try new menu to keep the production line

being high and keep innovations in the fields of burger, sandwiches and salads high to consumer

expectation (Qian & Chen, 2019).

Sources

Çalıyurt, K. T. (Ed.). (2019). Ethics and Sustainability in Accounting and Finance (Vol. 1).

Springer.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2013). Strategic management: Concepts and

cases: Competiveness and globalization (10th ed.). Mason, OH: South-Western Cengage

Learning.

McDONALD, M. A. L. C. O. L. M. (2016). Strategic marketing planning: theory and practice.

In The marketing book (pp. 108-142). Routledge.

Qian, Y., & Chen, J. (2019, July). Analysis of Intangible Resources of McDonald's and Its

Influence by Balanced Scorecard Method. In 2019 International Conference on

Contemporary Education and Society Development (ICCESD 2019). Atlantis Press.

Shahid, M., Shafiq, H., Khan, A., Bari, R., Shahzad, N., Ch, I. S., & Parveen, S. (2014). Financial

Exposure of McDonald's Corp. Success as a Market Leader. International Journal of Accounting

and Financial Reporting, 4(1), 338