Strategic_Management_of_Mcdonalds

Introduction McDonalds is considered as one of the largest chain of food service companies. They have almost more than 30,000 restaurants over almost 100 countries. It has a very strong and deep financial base and situation and their products have been accepted all over the world with its quality and taste. McDonalds have a typical and particular ability and competency and universal infrastructure in their operations. McDonalds look after their areas and surroundings with their high commitments and openly communicating their cognition and skilfulness for the safety of their food for the coming coevals. McDonalds has established back in 1937 by Patrick McDonald. Even though this has been established in 1937, the dealership company that which is popular as McDonalds is started at Des Plains in Chicago on April 1955 by a man called Ray Kroc. Then the McDonald has been moved to San Bernardino by McDonald brothers Dick and Mac. In 1954, almost ten years later Mr Ray Kroc has taken the McDonalds which were just originally a franchisee from McDonald brothers. Mr Ray Kroc was then a milk shake blender representative when took over the franchisee. The McDonalds has a special feature which made them stand out from others is they have a special menu for special time such as breakfast , lunch and dinner menus and top it all it keeps different menus in different countries according to the demography, their cultural values and with high quality service and standards. Recently, they started to provide several services such as wireless internet access etc. In the midst of 1965, McDonalds issued their public share with a dollar rate of 22.50 per share but by early 2003 a market research showed that the share came down more than 3 percent. They have almost 343.8 million dollar loss after running the business for the last 40 years in 2003. Executive Summary From the introduction itself we would know that this assignment is based on McDonalds restaurant chain, which is one of the largest restaurant chains now. In 2003, a new CEO has been taken charge, he is Jim Cantalupo. Since then the restaurant has been running under a new management strategy. It basically concentrates on the losses which have been facing until 2003 from the last 40 years since then. As we mentioned earlier, even though the restaurant has been running for the last 40 years they were facing almost 343.8 millions dollars by beginning of 2003 which is on January 2003. The new management strategy which has been regulated by the new CEO involves many function such as strategic planning, strategic formulation, evaluation and control, decision making, analysis the strategies and thus we are going to analyse the management strategy of McDonalds. Here we mainly focus on the different strengths, weakness and opportunities. The strategic management can be outlined as the following of superior performance by using the scheme that assures a better or potent corresponding of corporate force to customer needs than offered by rivals. Strategic Management is considered as the way to plan the business goals to make the company in very high position. It is the responsibility of the head of the company. Strategic Management concentrates strong fundamental structure of a business which will be elaborated through the unity of every individual of a company. Strategic Management is the function and science of explicating, carrying out and assessing cross functional determinations that will enable an organization to attain its goals. The advantage and disadvantages of Strategic Management The power of an amalgamation schemes are quickly obvious. Initially absorption allows high point executives to find deep knowledge of the business. This has to reduce the strategic defects. The business can be in a well situation to improve the resources and capacities. Strategic management always concentrates on improving towards the best interests of the company by following a few strategies. Making use of the best of means existing to them they always aim to raise the productivity and performance of the company. But there are situations where strategic management tends to fail. The company would face issues like finding the staff to orient themselves along the same wavelength through which the company intends to travel upon. At times, the staff with fail to find them motivated. Sometimes, the plans of the company would be high, but there wouldn't be necessary resources to satiate the demand. This will instead bring about a bridge gap thus dissipating the idea of a forward strategic movement. There have been instances when the company faced issues in the global side. Officious organizations, government organization, political traders will fail to recognize the strategy with which the company intends to place it strategies. Typically, these groups will come out as hurdles for the forward movement. There have been instances when the producer fails to understand the demand and requirement of the customers. Instead of providing with the product they require, the company motivates the customers to buy the product they design. This would not generally work on the long term basis. Without analyzing the need for the product in the market and usually, without even manipulating the desire for such a product through incorrect market research, the company would usually find themselves not able to experience the reaction they initially planned and expected. Core Competence IT is a system used in large companies to check the variations and it inspires the core procedures like development of the product. In development of a product it is important that the product should achieve the competitive rewards. Core Competency are of different forms. They can be technical things, can be dependable sources and keeping a good interpersonal skills with customers and suppliers. It also helps to trade in developments or workers commitment. Here in McDonalds, one of the most unique feature is employee training. They provide the best training for their employees than other restaurants and also they have different menus from others as we studied earlier. They also keep a very good competency in their infrastructure, service, quality, location, ambiance, products and communication. The fundamental influence in developing a highly influential service management was done Ray Kroc. He followed a very strict to the code while adhering to core points like quality, service, and cleanliness. Competitive Advantages "when two or more companies equate inside same market, one firm own a competitive advantage over its competitor when it makes a relentless very high rate of profit" this is according to Robert M Grant when he explains what competitive business is. Here McDonalds gets a continuous profit over the past few decades, but in 2002 financial year its been disclosed that the financial status was dropping and with the help of competitive advantages the financial status has been came back just after one year. Mckinsey’s 7-S Model The Seven S is an approach to incorporated scheme. The all words starts with S and they are Stategy, Structure, Systems, Style, Staff, Skill, and Super ordinate goals. As per business experts, this 7’S is really effective when maintaining a business like McDonalds. Strategy The strategy for achieving goals of the organization is combined of combination and market based resources. The strategy can be three things which are organizations market condition, customer requirements and competitor activity. Here in McDonalds, a new product has been launched after a careful study of the market such as the feasibility with the location, culture, customer opinions and competition of rivals. Structure The structure of an establishment is one of the common things that has to be very well created. It considers the total arrangement of the business. It distinguishes the total functioning of the establishment and how its units are effective with their environment. When we come to McDonalds, the structure is perfect enough for the success of it. The structure that can fit into the locality, demography and also when implementing the crew members, service, environment, Ambiance and production of the food. Systems To check and utilize the resources, the business systems are used in an establishment. It is basically according to the studies of the company and the individual. They have their perfect systems even when they work together as whole or in single branches. The systems are divided into several divisions. The system has been failed in some places especially in India. In India when they started their new branch in Bangalore they introduced the beef burgers. That was a big failure there the meat is been taken from cow and in India cow is considered as god by people. They failed to do the market research and failed to understand what the local market follows and actually desires if they had introduced vegetable burgers instead of beef burgers would have been a better attempt. Style Style is a common factor that is adapted by most of the business firms to run the business in the typical condition. One of the most discussed styles of McDonalds is its leadership styles that are followed by high level managers. They have their own style in each areas not just in leadership but also in crew members, with also a style of product and working strategy. Staff A scheme doesn't work out itself, people have to bring it and make it happen. If a company needs to make its goals real they need sufficient human resource. Also it should be right people and that entire people has to be placed in a proper place at perfect time. McDonald company has excellent idea to selecting people and they are high skilled to provide effective training. The company's acquisition is very popular and training is comparatively found to be better than other restaurants. Skills Human skills can be gained through experience and they gradually and they are not limited as we think. People are capable of developing their own skills and deliver the strategies. Strategies are happening through learning process who involved with that. Abilities are not constant they are developing over times, McDonald promoting their human resource to do the strategies promoting them to high level's if the person is capable such as promoting a crew member to manager. Super ordinate goals A strategy has lots of objectives to do. It is necessary to deliver a firm of highlighted capacity and performance. A strategy doesn't work if it has not a clear and planned aims. This might be sounded out in board terms as a commission or as a strategist's individual imagination. Finally this target must be written as explained with single defined clearly meaning and thought provoking objectives. Ansoffs Growth Matrix It is a comfortable instrument for assisting study of different growth chances of a business. Ansoff released an elementary chart based on two element which are product and market. The Matrix facilitates directing how every chances suit with the business strategy in conditions of products and markets. It is very easy to use for a business development, also effective in impulse clear strategic thoughts. Conclusion McDonalds, despite its huge brand names it was suffering from huge looses for the last few decades and a perfect implementation of change in strategies which was done by Jim Cantaloupe and only because of these changes the McDonald kingdom is still existing and making the biggest profits in America even though it faces some losses in British and in Asian countries. When the time came Jim saved the company from a huge disaster. It is usual that when running a business loses are inevitable especially when the management is not good enough in commitment but McDonald helped itself with the help of Jim introducing Mckinsey’s 7’S of Managemnt and Ansoff matrix.