Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
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Case Study SWOT Analysis Solution
Case Study Description of Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction
This is a Darden case study.From the early 1970s to the beginning of the 21st century, multinational corporations (MNCs) had increasingly participated in the reduction of poverty as part of their business strategies. Such participation reflected an increasing awareness of the widening gap between rich and poor across the globe. McDonald's Corporation, despite myriad criticisms directed at it about dead-end jobs and the detrimental effects of fast food, had defied norms, however. The company used a combination of promotion-from-within strategy and benchmark employee training programs to develop an abundant pool of human capital. The company was deeply committed to its employees who "started as crew" rising through the ranks, receiving the necessary training at its Hamburger University. This case details the rise of McDonald's, its particular culture, and its emphasis on and pride in the "stared as crew" element, and illustrates these elements with stories of various employees who rose through the ranks to management and executive positions.
Authors :: Pat Werhane, Regina Wolfe, Laura Pincus Hartman, Justin Sheehan
Swot Analysis of "Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction" written by Pat Werhane, Regina Wolfe, Laura Pincus Hartman, Justin Sheehan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Crew Mcdonald's facing as an external strategic factors. Some of the topics covered in Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction case study are - Strategic Management Strategies, Ethics, Human resource management, Leadership, Motivating people and Organizational Development.
Some of the macro environment factors that can be used to understand the Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction casestudy better are - – there is backlash against globalization, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing commodity prices,
talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crew Mcdonald's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crew Mcdonald's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction can be done for the following purposes –
1. Strategic planning using facts provided in Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction case study
2. Improving business portfolio management of Crew Mcdonald's
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Crew Mcdonald's
Strengths Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crew Mcdonald's in Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction Harvard Business Review case study are -
Sustainable margins compare to other players in Organizational Development industry
– Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction firm has clearly differentiated products in the market place. This has enabled Crew Mcdonald's to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Crew Mcdonald's to invest into research and development (R&D) and innovation.
High brand equity
– Crew Mcdonald's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Crew Mcdonald's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Crew Mcdonald's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Crew Mcdonald's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Crew Mcdonald's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Pat Werhane, Regina Wolfe, Laura Pincus Hartman, Justin Sheehan can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Crew Mcdonald's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Crew Mcdonald's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Crew Mcdonald's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Crew Mcdonald's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Crew Mcdonald's in the sector have low bargaining power. Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Crew Mcdonald's to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Crew Mcdonald's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Crew Mcdonald's is one of the most innovative firm in sector. Manager in Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction are -
High cash cycle compare to competitors
Crew Mcdonald's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the segment, Crew Mcdonald's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Crew Mcdonald's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction, in the dynamic environment Crew Mcdonald's has struggled to respond to the nimble upstart competition. Crew Mcdonald's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Crew Mcdonald's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Crew Mcdonald's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Crew Mcdonald's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Crew Mcdonald's 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Crew Mcdonald's has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Pat Werhane, Regina Wolfe, Laura Pincus Hartman, Justin Sheehan suggests that, Crew Mcdonald's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Increasing silos among functional specialists
– The organizational structure of Crew Mcdonald's is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Crew Mcdonald's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Crew Mcdonald's to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction HBR case study mentions - Crew Mcdonald's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Crew Mcdonald's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Crew Mcdonald's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Crew Mcdonald's to increase its market reach. Crew Mcdonald's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Crew Mcdonald's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Creating value in data economy
– The success of analytics program of Crew Mcdonald's has opened avenues for new revenue streams for the organization in the industry. This can help Crew Mcdonald's to build a more holistic ecosystem as suggested in the Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction case study. Crew Mcdonald's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Crew Mcdonald's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Crew Mcdonald's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at Crew Mcdonald's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Crew Mcdonald's in the consumer business. Now Crew Mcdonald's can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Crew Mcdonald's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Crew Mcdonald's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Crew Mcdonald's is facing challenges because of the dominance of functional experts in the organization. Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Crew Mcdonald's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Crew Mcdonald's to hire the very best people irrespective of their geographical location.
Threats Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Crew Mcdonald's needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Crew Mcdonald's has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Crew Mcdonald's needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crew Mcdonald's in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Crew Mcdonald's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Crew Mcdonald's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Crew Mcdonald's is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Crew Mcdonald's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Crew Mcdonald's business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Crew Mcdonald's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Crew Mcdonald's.
Environmental challenges
– Crew Mcdonald's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Crew Mcdonald's can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Started as Crew (C): McDonald's Strategy for Corporate Success and Poverty Reduction is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Crew Mcdonald's needs to make to build a sustainable competitive advantage.
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