CRITICAL FACTORS SAMPLE QUOTES

S1
Strong balance sheet and cash flows Pg. 2 L no.26

Pg. 21, L no.40

S2

Diversified geographic presence Pg. 9, L no.2

S3

Global brand recognition Pg.11, L no.14

S4

Constant currency revenue growth Pg.15,L no.17

S5

High Adaptability and Flexibility CL no.19

W1
Unhealthy food menu OL no. 41

W2 Lack of skilled worker OL no.48

W3

Low product diversification OL no. 31

W4

W5

O1
Health conscious societies OL no.20
O2

Growing beverages market OL no.31

O3
Demand for convenience Pg.13 Line no.48

O4 OL no. 1
A growing trend to maximize recycled content in
packaging

O5

T1
Food safety concerns hurt the restaurant industry Pg 15. Line 36

T2
Restaurant industry susceptible to new federal , state,
pg.16Lineno. 39
and local regulations

pg. 16 Line no.

49
T3

Growing number of competitors CL no. 118

T4 Cultural threat OL no. 109

T5

LEGENDS OF SOURCE CODES: CODES

S1,S2,S3,S4

W1,W2

W3
O1,O2
O3
O4

T1,T2,T3
T4
PLE QUOTES
We also have a balance sheet and cash flows that are strong and
support our ability to continue investing in our business.

The Company generates significant cash from its operations and has
substantial credit availability and capacity to fund operating and
discretionary spending such as capital expenditures, debt repayments,
dividends and share repurchases.

Of the 32,478 restaurants in 117 countries at year-end 2009, 26,216

were operated by franchisees (including 19,020 operated by
conventional franchisees, 3,160 operated by developmental licensees
and 4,036 operated by foreign affiliated markets (affiliates)—primarily
in Japan) and 6,262 were operated by the Company.

In addition, we believe locally-owned and operated restaurants help us

maximize brand performance and are at the core of our competitive
advantage, making McDonald’s not just a global brand but also a
locally-relevant one.

In 2009, constant currency revenue growth was driven by positive

comparable sales and expansion, partly offset by the impact of the
refranchising strategy in certain of the Company’s major markets. As a
result of the refranchising strategy, franchised restaurants represent
81%, 80% and 78% of Systemwide restaurants at December 31, 2009,
2008 and 2007, respectively

In 2008, constant currency revenue growth was driven by positive

comparable sales, partly offset by the refranchising strategy and the
impact of the Latam transaction. Upon completion of the Latam
transaction in August 2007, the Company receives royalties based on a
percent of sales in these markets instead of a combination of
Company-operated sales and franchised rents and royalties.
Although people in India are predominantly Hindu and revere the cow,
thus eating no beef, they love McDonald’s, especially Chicken
McNuggets, which were first introduced in India in May 2009

McDonald’s has always maintained the perception that its food is

unhealthy, loaded with fat, carbs, salt, and sugar. Well, these
perceptions are generally on point, as most items on its standard menu
are relatively unhealthy. 

 Most jobs at McDonald’s are low skilled and low paying. As a result,
there is a significant amount of employee turnover.
Many employees don’t take the job seriously, or only do it for short
periods of time, and this leads to lower performance. Since there is so
much turnover, training costs are high, pressuring the company’s
bottom line.

Low product diversification corresponds to the firm’s focus on food and

beverage products, which is a weakness that makes the business highly
vulnerable to slowdowns in the restaurant industry. 

In today’s health conscious societies the introduction of a healthy

hamburger is a great opportunity. 
 In 2008 the business directed efforts at the breakfast, chicken,
beverage and convenience categories. For example, hot specialist
coffees not only secure sales, but also mean that restaurants get
increasing numbers of customer visits. In 2009 McDonald’s saw the
full benefits of a venture into beverages.

The strong demand for takeout food, prepared and packaged for busy
customers to eat at home, should continue to grow solidly over the
next few years.

Increased consumer transparency and the desire to make the world a

better place have meant that companies all over the world are
committing to better environmental policies. One area that’s getting a
lot of attention is eco-friendly packaging.

Over the past few years, concerns over food safety have affected the
restaurant industry, driving up food prices in the United States, and
cutting customer traffic abroad.

Over the past several years, several state and local governments have
set new regulations that threaten to hurt the restaurant industry.

Another concern for restaurant operators involves emerging laws

regulating employment compensation.
The food service industry, also known as the restaurant industry, is
large and lucrative with a market capitalization of $104 billion and a
price-to-earnings (P/E) ratio of 80.2. Yet it is highly fragmented with
over 550,000 restaurants ranging from small local eateries to global
giants like MCD and Yum! Brands, Inc.

Being a global fast-food chain, McDonald’s has often faced multiple

cultural threats in different parts of the world, causing harm to the
image of the brand.

SOURCE
McDonald 2009 Annual Report
https://www.valueline.com/Stocks/Highlights/McDonalds_Corp___A_S
hort_SWOT_Analysis.aspx#.X2XozGgzbcc

http://panmore.com/mcdonalds-swot-analysis-recommendations

http://www.marketingteacher.com/mcdonalds-swot/
Restaurants-Standard-and-Poor-s-2007.pdf
https://www.ecofriendlylink.com/blog/eco-friendly-
packaging/#:~:text=There%20is%20a%20growing%20trend,shipping
%20materials%20around%20the%20world.

Restaurants-Standard-and-Poor-s-2007.pdf
https://bstrategyhub.com/mcdonalds-swot-analysis/
COMPETITIVE PROFILE MATRIX
MCD BURGER KING
Critical Success Factors Weighted Weighted
Weight Rating Score
Rating
Score
Global Expansion 0.30 4.0 1.20 3.2 0.96
Price Competitiveness 0.10 3.7 0.37 3.0 0.30
Financial Position 0.10 4.0 0.40 3.0 0.30
Product Quality 0.20 3.5 0.70 3.6 0.72
Advertising 0.30 3.7 1.11 2.9 0.87
Total 1.00 3.78 3.15
Interpretation: MCD competitors include Burger King, Yum Brands, Wendy's, and Starbucks. These brands fight for the contro
standard for fast-food service retailing with their commitment to their strategy called Plan to Win strategy, composed of the 5
which aimed to generate outstanding experiences for its customers by undertaking several initiatives focused
on each of the five P’s. All of the brands above showed a score of above averge meaning that they remain competitive in the f
sector. Although MCD and Wendy's are the most direct competitors, MCD and Starbucks represent the biggest opposition to o
a score of 3.78 and Starbucks having 3.39.

REFERENCE GUIDE: CPM @ PAGE 81

 YUM BRAND WENDY'S STARBUCKS
Weighted Weighted Weighted
Rating Rating Rating
Score Score Score
4.0 1.20 3.1 0.93 4.0 1.20
3.5 0.35 3.9 0.39 2.2 0.22
3.0 0.30 3.0 0.30 3.0 0.30
3.0 0.60 3.8 0.76 4.0 0.80
2.8 0.84 2.7 0.81 2.9 0.87
3.29 3.19 3.39
nds fight for the control of fast-food chain industry. MCD continues to set the
egy, composed of the 5 P’s (people, products, place, price, and promotion)
ocused
ain competitive in the fast-food service retailing as well as in the beverage
biggest opposition to one another, both having scored the highest, MCD with
EFE MATRIX

OPPORTUNITIES Weights Ratings Score

O1 Health conscious societies 0.18 3.00 0.54
O2 Growing beverages market 0.08 3.67 0.29
O3 Demand for convenience 0.16 3.56 0.57
O4 A growing trend to maximize recycled content in 0.06 2.60 0.16
packaging
O5 0

THREATS
T1 Food safety concerns hurt the restaurant industry 0.18 2.90 0.52

T2 Restaurant industry susceptible to new federal , 0.14 2.98 0.42

state, and local regulations
T3 Growing number of competitors 0.10 3.10 0.31
T4 Cultural threat 0.10 3.00 0.30
T5 0
TOTAL 1.00 3.11
Interpretation: The total weighted score showed an above average score of 3.11. This
indicates that MCD is responding more than effectively to the existing opportunities and
trends in the industry.

REFERENCE GUIDE: EFE MATRIX @ PAGE 80

IFE MATRIX

STRENGTHS WEIGHTS RATING SCORE

S1 Strong balance sheet and cash flows 0.18 4 0.72
S2 Diversified geographic presence 0.08 3.2 0.26
S3 Global brand recognition 0.10 3 0.30
S4 Constant currency revenue growth 0.15 3.8 0.57
S5 High Adaptability and Flexibility 0.09 3.5 0.32
WEAKNESSES
W1 Unhealthy food menu 0.15 1 0.15
W2 Lack of skilled worker 0.12 2.3 0.28
W3 Low product diversification 0.13 2.5 0.33
W4 0 -
W5 0 -
TOTAL 1.00 2.91

INTERPRETATION: Overall, MCD receives a total weighted average score of 2.91 which is
a little more than average and indicates that there is definitely still a room for
improvement in store operations, strategies, policies, and procedures.

REFERENCE GUIDE: IFE MATRIX @ PAGE122

SWOT
VMO STRENGHTS WEAKNESSE
Vision To move with velocity to drive S1 Strong balance sheet and cash W1
flows
profitable growth and become
an even better McDonald s
serving more customers
delicious food each day
around the world.

Mission S2 Diversified geographic presence W2

McDonald's brand mission is to
be our customers' favorite
place and way to eat and
drink. Our worldwide
operations are aligned around
a global strategy called the
Plan to Win, which center on
an exceptional customer
experience – People,
Products, Place, Price and
Promotion. We are committed
to continuously improving our
operations and enhancing our
customers' experience.

Objectives S3 Global brand recognition W3

The McDonald's main
objective is to provide
its customers with food of a
high standard,quick service
and value for money. They
also provide good returns to
shareholders.

S4 Constant currency revenue W4

growth

S5 High Adaptability and Flexibility W5

OPPORTUNITIES SO WO
O1 Health conscious societies SO1 Recover and recycle by finding WO1
ways to scale up systems to
allow for greater acceptance of
recycling, and making it easier
for our guests to recycle, too.
(S5,O4)

O2 Growing beverages market SO2 Expansion to the coffee market WO2

by introducing premium coffee.
(S2, O2)
 O3 Demand for convenience SO3 Invest on new food equipments WO3
and tools and apply a new
system to speed up the
ordering and serving process.
(S4,03)

O4 A growing trend to SO4 Capitalize for creating own WO4

maximize recycled content in facility to produce eco-friendly
packaging food packaging. (S1,O4)

O5 0 SO5 Expansion to the dining out WO5

market. (S2,O3)

THREATS ST
T1 Food safety concerns hurt the ST1 Gain control of supply chain WT1
restaurant industry and administer strict quality
control procedures in preparing
food.(S2,T1)

T2 Restaurant industry ST2 Introduce localized menus WT2

susceptible to new federal , according to the cultures,
state, and local regulations traditions and environment of
the franchise location. (S5,T4)

T3 Growing number of ST3 Enhance investment in WT3

competitors advertising and the franchise
model. (S1,S2,T3)

T4 Cultural threat ST4 0 WT4

T5 0 ST5 0 WT5

REFERENCE GUIDE: SWOT @ PAGE 177

 WEAKNESSES
Unhealthy food menu

Lack of skilled worker

Low product diversification

WO 5 3
Include vegetarian options and 4 20 12
other nutritious food in their
menu. (W1,O1)

Introduce new menu for 3 15 9

beverages, both hot and cold
drinks. (W3,O2)
Hire more skilled workers or
implement training programs
to increase customer
satisfaction. (W3,O3)

WT (S1,O1) S1-5, O1-3

Improve products and expand S1,S4,01
to a greater range of menu
choices. (W3,T3)

Develop sophisticated supplier

network operation and
distribution system to achieve
product consistency and taste
across geographies. (W3,T1,T3)

0
SN STRATEGIES MATCHING SPECIFIC STRATEGY
SO
SO1 Recover and recycle by finding ways to scale (S5,04)
up systems to allow for greater acceptance
of recycling, and making it easier for our
guests to recycle, too. (S5,O4) Market Development

SO2 Expansion to the coffee market by (S2,O2)

Product Development
introducing premium coffee.(S2, O2)

SO3 Invest on new food equipments and tools (S4,03)

and apply a new system to speed up the
ordering and serving process. (S4,03) Market Development

SO4 Capitalize for creating own facility to (S1,04)

produce eco-friendly food packaging. Market Development
(S1,O4)

SO5 Expansion to the dining out market. (S2,O3) (S2,O3) Market Development

WO
WO1 Include vegetarian options and other (W1,O1)
Concentric Diversification
nutritious food in their menu. (W1,O1)

WO2 Introduce new menu for beverages, both (W3,O2)

hot and cold drinks. (W3,O2) Product
Development
WO3 Hire more skilled workers or implement (W3,O3)
training programs to increase customer
satisfaction. (W3,O3) Market Penetration

WO4
WO5
ST
ST1 Gain control of supply chain and administer
strict quality control procedures in preparing (S2,T1) Forward Integration
food.(S2,T1)

ST2 Introduce localized menus according to the (S5,T4)

cultures, traditions and environment of the
franchise location. (S5,T4) Product Development

ST3 Enhance investment in advertising and the (S1,S2,T3)

Market Penetration
franchise model. (S1,S2,T3)

ST4
ST5
WT
WT1 Improve products and expand to a greater (W3,T3)
Product Development
range of menu choices. (W3,T3)
WT2 Develop sophisticated supplier network (W3,T1,T3)
operation and distribution system to achieve
product consistency and taste across
geographies. (W3,T1,T3) Market Development

WT3
WT4
WT5
GENERAL STRATEGY

Intensive Strategy

Intensive Strategy

Intensive Strategy

Intensive Strategy

Intensive Strategy

Diversification Strategy

Intensive Strategy

Intensive Strategy

Integration Strategy

Intensive Strategy

Intensive Strategy

Intensive Strategy
Intensive Strategy
SN STRATEGIES MATCHING
ST1 Gain control of supply chain and administer strict
quality control procedures in preparing food.(S2,T1) (S2,T1)

SO1 Recover and recycle by finding ways to scale up (S5,04)

systems to allow for greater acceptance of recycling,
and making it easier for our guests to recycle, too.
(S5,O4)

SO2 Expansion to the coffee market by introducing (S2,O2)

premium coffee.(S2, O2)

SO3 Invest on new food equipments and tools and apply a (S4,03)
new system to speed up the ordering and serving
process. (S4,03)

SO4 Capitalize for creating own facility to produce eco- (S1,04)

friendly food packaging. (S1,O4)

SO5 Expansion to the dining out market. (S2,O3) (S2,O3)

WO2 Introduce new menu for beverages, both hot and cold (W3,O2)
drinks. (W3,O2)

WO3 Hire more skilled workers or implement training (W3,O3)

programs to increase customer satisfaction. (W3,O3)

ST2 Introduce localized menus according to the cultures, (S5,T4)

traditions and environment of the franchise location.
(S5,T4)

ST3 Enhance investment in advertising and the franchise (S1,S2,T3)

model. (S1,S2,T3)

WT1 Improve products and expand to a greater range of (W3,T3)

menu choices. (W3,T3)

WT2 Develop sophisticated supplier network operation and (W3,T1,T3)

distribution system to achieve product consistency
and taste across geographies. (W3,T1,T3)

WO1 Include vegetarian options and other nutritious food in (W1,O1)

their menu. (W1,O1)
REFERENCE GUIDE: STRATEGIES @ PAGE 136
ALTERNATIVE STRATEGIES
Integration Strategies

Intensive Strategies

Diversification Strategies
Diversification Strategies
QUALITATIVE EVALUATIVE MATRIX
STRATEGY 1
INTEGRATION STRATEGIES
ADVANTAGES DISADVANTAGE

Capacity balancing issues: For example, the

firm may need to build excess upstream
Improve supply chain coordination capacity to ensure that its downstream
operations have sufficient supply under all
demand conditions.

Provide more opportunities to differentiate Potentially higher costs due to low

efficiencies resulting from lack of supplier
by means of increased control over inputs.
competition.

Increase entry barriers to potential Decreased ability to increase product variety

competitors, for example, if the firm can if significant in-house development is
gain sole access to a scarcxe resource. required.

Gain access to downstream distribution

channels that otherwise would be
inaccessible.
 STRATEGY 2
INTENSIVE STRATEGIES
ADVANTAGES DISADVANTAGE

The company will have to put up with the

Product awareness: Since the products are
distribution costs to multiple locations
available everywhere (practically),
despite low sales, resulting in a loss of
consumers are aware of the same.
capital.

The products are distributed via many retail The number of retail locations is spread over
outlets, and since they are regularly used, a large area, and sometimes, it becomes
they are sold rather quickly too. Thus, difficult to manage such a huge number of
making sufficient money. retail outlets.

This strategy uses so many retailers that the

Intensive distribution helps increase
use of an agent/go-between becomes
marketing efficiency.
inevitable.

Huge customer recognition

 STRATEGY 3
DIVERSIFICATION STRATEGIES
ADVANTAGES DISADVANTAGE

Diversifying into a new market segment

will demand new skill sets. Lack of
Access to New Profit Opportunities
expertise in the new field can prove to be
a setback for the entity.

A mismanaged diversification or excessive

Diversification helps to maximize the use of ambition can lead to a company over
potentially underutilized resources. expanding into too many new directions at
the same time. 
A widely diversified company will not be
Certain industries may fall down for a
able to respond quickly to market
specific time frame owing to economic
changes. The focus on the operations will
factors. Diversification provides movement
be limited, thereby limiting the
away from activities which may be declining.
innovation within the entity.
STRATEGY 4
STRATEGY 5
QUANTITATIVE STRATEGIC PLANNING MATRIX
STRATEGY 1 STRATEGY 2
CRITICAL FACTORS INTENSIVE INTEGRATION
STRATEGIES STRATEGIES
STRENGTHS W R WS R
S1 Strong balance sheet and cash flows 0.18 4 0.72 4

S2 Diversified geographic presence 0.08 3.5 0.28 2

S3 Global brand recognition 0.10 3 0.30 1

S4 Constant currency revenue growth 0.15 2.9 0.44 3.9

S5 High Adaptability and Flexibility 0.09 3 0.27 2

WEAKNESSES
W1 Unhealthy food menu 0.15 3 0.45 2.9
W2 Lack of skilled worker 0.12 3 0.36 1

W3 Low product diversification 0.13 3.1 0.40 1

W4 0 0 -

W5 0 0 -

OPPORTUNITIES
O1 Health conscious societies 0.18 3 0.54 2.8

O2 Growing beverages market 0.08 2.9 0.23 2

O3 Demand for convenience 0.16 3 0.48 1

O4 A growing trend to maximize recycled content in 0.06 2 0.12 2

packaging

O5 0 -

THREATS
T1 Food safety concerns hurt the restaurant industry 0.18 2.7 0.49 3.5

T2 Restaurant industry susceptible to new federal , state, 0.14 3 0.42 3

and local regulations

T3 Growing number of competitors 0.10 3 0.30 2

T4 Cultural threat 0.10 3.9 0.39 2.6

T5 0 -

TOTAL 2.00 5.80

Interpretation: Intensive Strategy got the

highest total weighted average of 5.80 and
indicates that it is the strategy that is
recommended to be implemented.

REFERENCE GUIDE: QSPM @ PAGE 192

 STRATEGY 2 STRATEGY 3 STRATEGY 4 STRATEGY 5

INTEGRATION DIVERSIFICATION
STRATEGIES STRATEGIES
WS R WS R WS R WS
0.72 4 0.72 -
0.16 3.7 0.30 -
0.10 1 0.10 -
0.59 3 0.45 -
0.18 2.7 0.24 -

0.44 1 0.15 -
0.12 4 0.48 -
0.13 4 0.52 -
- - - -
- - - -

0.50 1.2 0.22 -

0.16 2.6 0.21 -
0.16 3 0.48 -
0.12 2 0.12 -

- - - -

0.63 2 0.36 -

0.42 3 0.42 - -

0.20 3 0.30 -
0.26 3 0.30 -
- - -
4.62 5.06 - -
VISION MISSION
OBJECTIVES KRA
PROGRAM ACTIVITY
PI
 Positive

Internal STRENGTHS

External OPPORTUNITIES
 Negative

WEAKNESSES PAST

THREATS AT PRESENT UP TO THE FUTURE