Case Study Description of McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging?
Are hedge funds heroes or villains? Management of Blockbuster, Time Warner, Six Flags, Knight-Ridder, and Bally Total Fitness might prefer the "villain" appellation, but Enron, WorldCom, Tyco, and HealthSouth shareholders might view management as the real villains and hedge funds as vehicles to oust incompetent corporate managers before they run companies into the ground or steal them through fraudulent transactions. Could the pressure exerted by activist hedge funds on targeted companies result in increased share prices, management accountability, and better communication with shareholders? Or does it distract management from its primary goal of enhancing long-term shareholder value?
Authors :: David P. Stowell, Tim Moore, Jeff Schumacher
Swot Analysis of "McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging?" written by David P. Stowell, Tim Moore, Jeff Schumacher includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Villains Hedge facing as an external strategic factors. Some of the topics covered in McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? case study are - Strategic Management Strategies, Competitive strategy, Corporate governance, Financial analysis, Financial management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? casestudy better are - – there is backlash against globalization, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Villains Hedge, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Villains Hedge 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? can be done for the following purposes –
1. Strategic planning using facts provided in McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? case study
2. Improving business portfolio management of Villains Hedge
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Villains Hedge
Strengths McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Villains Hedge in McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? Harvard Business Review case study are -
Analytics focus
– Villains Hedge 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 David P. Stowell, Tim Moore, Jeff Schumacher 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.
Ability to lead change in Strategy & Execution field
– Villains Hedge 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 Villains Hedge in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Villains Hedge is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Villains Hedge is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Villains Hedge in the sector have low bargaining power. McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Villains Hedge to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Villains Hedge 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.
Operational resilience
– The operational resilience strategy in the McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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.
Superior customer experience
– The customer experience strategy of Villains Hedge in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Villains Hedge has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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.
High brand equity
– Villains Hedge has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Villains Hedge to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Villains Hedge 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Villains Hedge is one of the most innovative firm in sector. Manager in McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? firm has clearly differentiated products in the market place. This has enabled Villains Hedge to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Villains Hedge to invest into research and development (R&D) and innovation.
Weaknesses McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? are -
Workers concerns about automation
– As automation is fast increasing in the segment, Villains Hedge 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.
Slow to strategic competitive environment developments
– As McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? HBR case study mentions - Villains Hedge 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.
Lack of clear differentiation of Villains Hedge products
– To increase the profitability and margins on the products, Villains Hedge needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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 Villains Hedge has relatively successful track record of launching new products.
High cash cycle compare to competitors
Villains Hedge 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging?, in the dynamic environment Villains Hedge has struggled to respond to the nimble upstart competition. Villains Hedge has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Villains Hedge has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging?, is just above the industry average. Villains Hedge needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, David P. Stowell, Tim Moore, Jeff Schumacher suggests that, Villains Hedge 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 operating costs
– Compare to the competitors, firm in the HBR case study McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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 Villains Hedge 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging?, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Opportunities McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? | 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Villains Hedge is facing challenges because of the dominance of functional experts in the organization. McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Villains Hedge 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.
Better consumer reach
– The expansion of the 5G network will help Villains Hedge to increase its market reach. Villains Hedge 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.
Developing new processes and practices
– Villains Hedge can develop new processes and procedures in Strategy & Execution 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.
Creating value in data economy
– The success of analytics program of Villains Hedge has opened avenues for new revenue streams for the organization in the industry. This can help Villains Hedge to build a more holistic ecosystem as suggested in the McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? case study. Villains Hedge can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Villains Hedge 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 Strategy & Execution segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Villains Hedge can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Villains Hedge can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Loyalty marketing
– Villains Hedge 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.
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 Villains Hedge in the consumer business. Now Villains Hedge can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Villains Hedge 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Villains Hedge can use these opportunities to build new business models that can help the communities that Villains Hedge operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Villains Hedge 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Villains Hedge to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? are -
Consumer confidence and its impact on Villains Hedge demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Villains Hedge 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.
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. Villains Hedge 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.
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 Villains Hedge business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Villains Hedge
– 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 Villains Hedge.
Technology acceleration in Forth Industrial Revolution
– Villains Hedge has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Villains Hedge needs to keep up with the evolution of technology in the Strategy & Execution 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.
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. Villains Hedge needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Villains Hedge 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Villains Hedge with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Villains Hedge.
High dependence on third party suppliers
– Villains Hedge 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging?, Villains Hedge may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.
Weighted SWOT Analysis of McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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 McDonald's, Wendy's, and Hedge Funds: Hamburger Hedging? 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 Villains Hedge needs to make to build a sustainable competitive advantage.
