Started as Crew (B): Darlene Calhoun and McDonald's SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Started as Crew (B): Darlene Calhoun and McDonald's
This is a Darden case study.McDonald's Corporation, the behemoth of the fast food industry, has taken its share of criticism-even ridicule-over the years. The image of the company suffered as the public began to perceive its jobs as dead-end, unskilled, and unstimulating. The term "McJob," coined by an author in 1991, was slang for a low-paying job that required little skill and provided little opportunity for advancement. But in many ways, McDonald's Corporation defied norms, using 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" coming up through the ranks, receiving the necessary training at its own Hamburger University. This case tells the story of Darlene Calhoun, who started working at a McDonald's as a cashier in 1977 and, 20 years later, was supervising five McDonald's stores in the Chicago area.
Authors :: Pat Werhane, Laura Pincus Hartman, Justin Sheehan, Jenny Mead
Swot Analysis of "Started as Crew (B): Darlene Calhoun and McDonald's" written by Pat Werhane, Laura Pincus Hartman, Justin Sheehan, Jenny Mead includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mcdonald's Darlene facing as an external strategic factors. Some of the topics covered in Started as Crew (B): Darlene Calhoun and McDonald's case study are - Strategic Management Strategies, Diversity, 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 (B): Darlene Calhoun and McDonald's casestudy better are - – challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing energy prices, technology disruption, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels,
increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Started as Crew (B): Darlene Calhoun and McDonald's
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Started as Crew (B): Darlene Calhoun and McDonald's case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mcdonald's Darlene, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mcdonald's Darlene 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 (B): Darlene Calhoun and McDonald's can be done for the following purposes –
1. Strategic planning using facts provided in Started as Crew (B): Darlene Calhoun and McDonald's case study
2. Improving business portfolio management of Mcdonald's Darlene
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 Mcdonald's Darlene
Strengths Started as Crew (B): Darlene Calhoun and McDonald's | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mcdonald's Darlene in Started as Crew (B): Darlene Calhoun and McDonald's Harvard Business Review case study are -
Ability to lead change in Organizational Development field
– Mcdonald's Darlene is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mcdonald's Darlene in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Mcdonald's Darlene has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Started as Crew (B): Darlene Calhoun and McDonald's - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Mcdonald's Darlene has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Started as Crew (B): Darlene Calhoun and McDonald's Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Mcdonald's Darlene is present in almost all the verticals within the industry. This has provided firm in Started as Crew (B): Darlene Calhoun and McDonald's case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Mcdonald's Darlene has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mcdonald's Darlene to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Mcdonald's Darlene
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mcdonald's Darlene does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Mcdonald's Darlene 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
– Mcdonald's Darlene is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Mcdonald's Darlene has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mcdonald's Darlene 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.
Operational resilience
– The operational resilience strategy in the Started as Crew (B): Darlene Calhoun and McDonald's 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Mcdonald's Darlene digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mcdonald's Darlene has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Mcdonald's Darlene 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.
Weaknesses Started as Crew (B): Darlene Calhoun and McDonald's | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Started as Crew (B): Darlene Calhoun and McDonald's are -
No frontier risks strategy
– After analyzing the HBR case study Started as Crew (B): Darlene Calhoun and McDonald's, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Started as Crew (B): Darlene Calhoun and McDonald's that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Started as Crew (B): Darlene Calhoun and McDonald's can leverage the sales team experience to cultivate customer relationships as Mcdonald's Darlene is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Pat Werhane, Laura Pincus Hartman, Justin Sheehan, Jenny Mead suggests that, Mcdonald's Darlene 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Started as Crew (B): Darlene Calhoun and McDonald's 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 Mcdonald's Darlene has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Mcdonald's Darlene 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.
Lack of clear differentiation of Mcdonald's Darlene products
– To increase the profitability and margins on the products, Mcdonald's Darlene needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Started as Crew (B): Darlene Calhoun and McDonald's 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 Mcdonald's Darlene 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Mcdonald's Darlene has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Mcdonald's Darlene, firm in the HBR case study Started as Crew (B): Darlene Calhoun and McDonald's needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Started as Crew (B): Darlene Calhoun and McDonald's HBR case study mentions - Mcdonald's Darlene 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.
Skills based hiring
– The stress on hiring functional specialists at Mcdonald's Darlene 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.
Opportunities Started as Crew (B): Darlene Calhoun and McDonald's | 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 (B): Darlene Calhoun and McDonald's are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mcdonald's Darlene can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mcdonald's Darlene 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 Mcdonald's Darlene to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Mcdonald's Darlene can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Mcdonald's Darlene can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Mcdonald's Darlene to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mcdonald's Darlene can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Started as Crew (B): Darlene Calhoun and McDonald's, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mcdonald's Darlene can use these opportunities to build new business models that can help the communities that Mcdonald's Darlene operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mcdonald's Darlene 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.
Using analytics as competitive advantage
– Mcdonald's Darlene has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Started as Crew (B): Darlene Calhoun and McDonald's - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mcdonald's Darlene to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Mcdonald's Darlene 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mcdonald's Darlene 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mcdonald's Darlene can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Mcdonald's Darlene can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Mcdonald's Darlene to increase its market reach. Mcdonald's Darlene 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.
Threats Started as Crew (B): Darlene Calhoun and McDonald's 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 (B): Darlene Calhoun and McDonald's are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Mcdonald's Darlene in the Organizational Development sector and impact the bottomline of the organization.
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. Mcdonald's Darlene needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
Increasing wage structure of Mcdonald's Darlene
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Mcdonald's Darlene.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Mcdonald's Darlene will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Mcdonald's Darlene has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Mcdonald's Darlene 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mcdonald's Darlene 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 (B): Darlene Calhoun and McDonald's .
Stagnating economy with rate increase
– Mcdonald's Darlene can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Mcdonald's Darlene is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mcdonald's Darlene 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. Mcdonald's Darlene can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mcdonald's Darlene 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.
High dependence on third party suppliers
– Mcdonald's Darlene 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.
Weighted SWOT Analysis of Started as Crew (B): Darlene Calhoun and McDonald's 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 (B): Darlene Calhoun and McDonald's 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 (B): Darlene Calhoun and McDonald's 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 (B): Darlene Calhoun and McDonald's 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 (B): Darlene Calhoun and McDonald's 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 Mcdonald's Darlene needs to make to build a sustainable competitive advantage.
