MCDONALDS

CASE STUDY

Group Members
Hiba Munnawer
Sidra Javed
Maria Mustafa
Zakia Siddiqui
STRATEGY FORMULATION FRAME WORK
1. INPUT STAGE
 EFE

 IFE

 CPM

2. MATCHING STAGE
 TOWS MATRIX

 SPACE MATRIX

 BCG MATRIX

 IE MATRIX

 GRAND STRATEGY MATRIX

3.DECISION STAGE
 QSPM
1. INPUT STAGE
EXTERNAL FACTOR EVALUATION MATRIX (EFE):
Key External Factors Weight Rating Weighted Score

OPPORTUNITIES

Respond to social changes - by innovation within healthier lifestyle 0.12 4 0.48

foods
Joint ventures with retailers or acquisitions 0.2 3 0.6
Introducing new food items and products 0.2 4 0.08

THREATS

Consumer focus on nutrition and healthier lifestyles. 0.15 4 0.6

Recession or down turn in economy 0.08 3 0.24

Major competitors, like YUM, Burger King, Wendy's 0.09 3 0.27

New entrants in the industry 0.06 2 0.12

Fluctuation in Exchange Rates 0.1 3 0.3

TOTAL 1.00 2.69

ANALYSIS OF EFE MATRIX:
 EFE Matrix shows it is managing its opportunities and
threats average.
 Actions:

1. Acquire small food companies to attract heavy traffic

2. Make contracts with major educational institutions and

corporations
3. introduce healthier products with low calories and fats
INTERNAL FACTOR EVALUATION MATRIX (IFE):
Key Internal Factors Weight Rating Weighted
Score

STRENGTHS
Strong global presence in more than 100 countries 0.1 4 0.4
market leader in both the domestic as well as the international 0.2 4 0.8
markets
Large number of loyal customer 0.08 3 0.24
Strong R&D 0.08 3 0.24
Standardized quality products 0.05 3 0.15
Convenient and extended hours 0.05 2 0.10
Value based pricing 0.06 3 0.18
Focused on customer’s comfort by making different zones for 0.05 3 0.15
different customers
Good CSR 0.05 2 0.10

WEAKNESSES
sued multiple times for serving unhealthy food 0.15 4 0.6
weak in analyzing the needs of customers 0.08 4 0.32
Do not disclose proper information to customers 0.04 3 0.12
Attracting kids due to which parents are going against them 0.01 2 0.02

TOTAL 1.00 3.42

ANALYSIS OF IFE MATRIX:

 IFE Matrix shows that McDonalds is managing strength and

weaknesses very well
 Actions:

1. It should maintain its leadership position to overcome its

weaknesses
2. Should provide the healthy low calories food

3. Should disclose the proper information to customers to

avoid legal actions
 CPM poor.
4 = superior, 3 = above average, 2 = average, 1 =

McDonalds YUM BURGER

KING

Critical SUCCESS
FACTORS WEIGHT RATING W.SC RATING W.SC RATING W.SC

0.25 3 0.75 4 1 3 0.75

Product Quality

Price 0.2 3 0.6 3 0.6 3 0.6

Competitiveness

0.2 4 0.8 3 0.6 2 0.4

Market Share

0.05 2 0.1 2 0.1 2 0.1

R& D

0.1 4 0.4 3 0.3 2 0.2

Financial Position

0.2 3 0.6 3 0.6 2 0.4

Consumer Loyalty

Total 1.00 3.25 3.2 2.45

ANALYSIS OF CPM:

•CPM shows that McDonalds is doing well as compare to its

competitors
•Actions:
1. It should emphasize on its product quality as it is lacking as compare
to YUMS
2. McDonalds should also focus on R&D to gain competitive
advantage
2. MATCHING STAGE
TOWS STRATEGIES:
OPPORTUNITIES (O):
Respond to social changes - by innovation
within healthier lifestyle foods
Joint ventures with retailers or acquisitions
Introducing new food items and products
THREATS (T):
Consumer focus on nutrition and healthier
lifestyles.
Recession or down turn in economy
Major competitors, like YUM, Burger King,
Wendy's
New entrants in the industry
Fluctuation in Exchange Rates
STRENGTHS (S):
Value based pricing
Strong R&D
Strong global presence in more than 100
countries
Standardized quality products
market leader in both the domestic as
well as the international markets
Large number of loyal customer
Good CSR
Focused on customer’s comfort by
making different zones for different
customers
Convenient and extended hours
S-O STRATEGIES
introducing new menus with nutritious
ingredients (S2,S3,O1,O2,O3)
Entering new market by Acquisition and
Mergers(S3,S5,O2)
S-T STRATEGIES
Providing healthier products through R&D
(S2,S4,T1)
Reduce threat of competitors by bringing
new innovative products through strong
R&D and by focusing more on loyal
customers (S1,S2,S3,S6,T3)
WEAKNESSES (W):
sued multiple times for serving
unhealthy food
weak in analyzing the needs of
customers
Do not disclose proper information to
customers
Attracting kids due to which parents
are going against them
W-O STARTEGIES:
Providing healthier products to avoid
legal actions(W1,O1,O3)
Providing proper information to
customers on product ingredients
through proper advertisement (W4,O1)
W-T STRATEGIES
Strongly analyzing the needs of customers
in order to reduce the threat of new
entrants and of existing competitors
(W2,T3,T4)
FINANCIAL STRENGTH Ratings

 Earnings per share 6

3 +1 Worst +6 Best
 liquidity
5
 Net income 5
 ROI 19
INDUSTRY STRENGTH

 Growth Potential (increasing demand). 5

2
 Technological knowhow (Requirement high)
5
+1 Worst +6 Best
 Ease of entry into the market 3
 Financial stability 15
ENVIRONMENTAL STABILITY

-1
 Competitive Pressure is High -5
 Rate of inflation -3 -6 Worst -1 Best
 Price range -1
 Demand variability -10

COMPETITIVE ADVANTAGE

 Market share -1
 Product quality
-3 -6 Worst -1 Best
-3
 Technological know how -3
 Control over distributers -10

CONCLUSION

 FS Average is 19/4 =4.75

 IS Average is 15/4=3.75
 ES Average is -10/4=-2.5
 CA Average is -10/4=-2.5
 Directional Vector Coordinates:
x-axis: -2.5+3.75=1.25
SPACE MATRIX
y-axis: 4.75+(-2.5)=2.25
 SPACE MATRIX

ANALYSIS:
SPACE Matrix shows that McDonalds should aggressively go for
Forward integration (joint ventures with retailers)
Product development (launch new innovative products such as sandwiches with more healthier
ingredients)
BCG MATRIX
IE MATRIX:

THE IFE TOTAL WEIGHTED SCORE

STRONG AVERAGE WEAK

3.0 TO 4.0 2.0 TO 2.99 1.0 TO 1.99

THE EFE HIGH

3.0 TO 4.0
I II III

TOTAL
WEIGHTED
SCORE
MEDIUM IV V VI
2.0 TO 2.99

McDonalds

LOW VII VIII IX

1.0 TO 1.99
ANALYSIS OF IE
IE Matrix shows the MacDonald's in IV quadrant i.e. the
BUILD AND GROW
ACTIONS:
It should go for,
 Forward integration (joint ventures with retailers)

 Product development (launch new innovative products

such as sandwiches with more healthier ingredients)
GRAND MATRIX

MacDonald's
ANALYSIS OF GRAND MATRIX
ACTIONS:
It should go for,
 Forward integration (joint ventures with retailers)

 Product development (launch new innovative products such as

sandwiches with more healthier ingredients)
 Market penetration by attracting non users of the product
through intensive advertising and by providing healthier
products
3. DECISION STAGE
 
QSPM STRATEGIC ALTERNATIVES
provide the healthy low Entering new markets
 
calories food through acquisitions and
mergers

WEIGHT AS TAS AS TAS

OPPORTUNITIES:
Respond to social changes - by innovation within healthier 0.12 4 0.48 4 0.48
lifestyle foods
Joint ventures with retailers or acquisitions 0.2 3 0.6
Introducing new food items and products 0.2 4 0.8 4 0.8

THREATS
Consumer focus on nutrition and healthier lifestyles. 0.15 4 0.6 3 0.45
Recession or down turn in economy 0.08 3 .24
Major competitors, like YUM, Burger King, Wendy's 0.09 4 0.36 3 0.27
New entrants in the industry 0.06 3 0.18 2 0.12
Fluctuation in Exchange Rates 0.1 4 0.4

SUM TOTAL ATTRACTIVENESS OF SCORE

1.00 2.34 3.36
 provide the healthy low Entering new markets through
calories food acquisitions and mergers

WEIGHT AS TAS AS TAS

STRENGTHS
Strong global presence in more than 100 0.1
countries 4 0.4
market leader in both the domestic as well 0.2
as the international markets 3 0.6 4 0.8
Large number of loyal customer 0.08 4 0.32 4 0.32
Strong R&D 0.08 4 0.32 2 0.16
Standardized quality products 0.05 3 0.15 3 0.15
Convenient and extended hours 0.05 2 0.10
Value based pricing 0.06 2 0.12 3 0.18
Focused on customer’s comfort by making 0.05
different zones for different customers
Good CSR 0.05 2 0.10
WEAKNESS
sued multiple times for serving unhealthy 0.15
food
4 0.20 3 0.45
weak in analyzing the needs of customers 0.08 3 0.24 3 0.24
Do not disclose proper information to 0.04
customers
2 0.08 2 0.08
Attracting kids due to which parents are 0.01
going against them
3 0.03
SUB TOTAL ATTRACTIVENESS OF
SCORE
1.00 2.26 2.78
 provide the Entering new
healthy low markets through
calories food acquisitions and
mergers

Total attractiveness 4.6 6.14

score