McDonald's (in 2013): How to Win (Again)? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of McDonald's (in 2013): How to Win (Again)?
Don Thompson became CEO of McDonald's in July of 2012. McDonald's total shareholder fell from 34.7% in 2011 to -10.75% from 2011 to 2012. Thompson is under fire to turn things around in 2013. Former CEO Jim Skinner's "Plan to Win" had turned the company around in the last decade, and Thompson, Chief Operating Officer under Skinner, was looking to recreate that success. Thompson wanted to focus on improving the menu, customer experience, and McDonald's brand.
Authors :: Marne L. Arthaud-Day, Frank T. Rothaermel, Justin Collins
Swot Analysis of "McDonald's (in 2013): How to Win (Again)?" written by Marne L. Arthaud-Day, Frank T. Rothaermel, Justin Collins includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Thompson Mcdonald's facing as an external strategic factors. Some of the topics covered in McDonald's (in 2013): How to Win (Again)? case study are - Strategic Management Strategies, Crisis management, Innovation, Leadership, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the McDonald's (in 2013): How to Win (Again)? casestudy better are - – central banks are concerned over increasing inflation, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of McDonald's (in 2013): How to Win (Again)?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in McDonald's (in 2013): How to Win (Again)? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Thompson Mcdonald's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Thompson 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 McDonald's (in 2013): How to Win (Again)? can be done for the following purposes –
1. Strategic planning using facts provided in McDonald's (in 2013): How to Win (Again)? case study
2. Improving business portfolio management of Thompson Mcdonald's
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 Thompson Mcdonald's
Strengths McDonald's (in 2013): How to Win (Again)? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Thompson Mcdonald's in McDonald's (in 2013): How to Win (Again)? Harvard Business Review case study are -
Effective Research and Development (R&D)
– Thompson Mcdonald's 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 (in 2013): How to Win (Again)? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Thompson 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.
Ability to lead change in Strategy & Execution field
– Thompson Mcdonald's 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 Thompson Mcdonald's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Thompson Mcdonald's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Thompson Mcdonald's 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.
Highly skilled collaborators
– Thompson 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 McDonald's (in 2013): How to Win (Again)? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Thompson Mcdonald's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Thompson Mcdonald's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Thompson 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
– Thompson Mcdonald's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Thompson 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.
Low bargaining power of suppliers
– Suppliers of Thompson Mcdonald's in the sector have low bargaining power. McDonald's (in 2013): How to Win (Again)? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Thompson Mcdonald's to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Thompson Mcdonald's is present in almost all the verticals within the industry. This has provided firm in McDonald's (in 2013): How to Win (Again)? 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.
Learning organization
- Thompson Mcdonald's 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 Thompson Mcdonald's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in McDonald's (in 2013): How to Win (Again)? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Strategy & Execution industry
– McDonald's (in 2013): How to Win (Again)? firm has clearly differentiated products in the market place. This has enabled Thompson Mcdonald's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Thompson Mcdonald's to invest into research and development (R&D) and innovation.
Weaknesses McDonald's (in 2013): How to Win (Again)? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of McDonald's (in 2013): How to Win (Again)? are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Thompson Mcdonald's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study McDonald's (in 2013): How to Win (Again)? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Thompson Mcdonald's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Thompson Mcdonald's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Thompson Mcdonald's to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Marne L. Arthaud-Day, Frank T. Rothaermel, Justin Collins suggests that, Thompson 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.
Slow to strategic competitive environment developments
– As McDonald's (in 2013): How to Win (Again)? HBR case study mentions - Thompson 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.
High cash cycle compare to competitors
Thompson 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.
Capital Spending Reduction
– Even during the low interest decade, Thompson Mcdonald's 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.
Lack of clear differentiation of Thompson Mcdonald's products
– To increase the profitability and margins on the products, Thompson Mcdonald's 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 McDonald's (in 2013): How to Win (Again)? 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 Thompson Mcdonald's 's lucrative customers.
Products dominated business model
– Even though Thompson 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 - McDonald's (in 2013): How to Win (Again)? should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the McDonald's (in 2013): How to Win (Again)? 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 Thompson Mcdonald's has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study McDonald's (in 2013): How to Win (Again)? 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 McDonald's (in 2013): How to Win (Again)? can leverage the sales team experience to cultivate customer relationships as Thompson Mcdonald's is planning to shift buying processes online.
Opportunities McDonald's (in 2013): How to Win (Again)? | 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 (in 2013): How to Win (Again)? are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Thompson Mcdonald's 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, McDonald's (in 2013): How to Win (Again)?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Thompson 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Thompson Mcdonald's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Thompson Mcdonald's in the consumer business. Now Thompson Mcdonald's can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Thompson Mcdonald's is facing challenges because of the dominance of functional experts in the organization. McDonald's (in 2013): How to Win (Again)? 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Thompson 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 Strategy & Execution segment, and it will provide faster access to the consumers.
Buying journey improvements
– Thompson Mcdonald's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. McDonald's (in 2013): How to Win (Again)? 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.
Loyalty marketing
– Thompson 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.
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 Thompson Mcdonald's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Thompson 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 Thompson Mcdonald's to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Thompson Mcdonald's to increase its market reach. Thompson 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.
Developing new processes and practices
– Thompson Mcdonald's 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.
Manufacturing automation
– Thompson Mcdonald's 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.
Threats McDonald's (in 2013): How to Win (Again)? 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 (in 2013): How to Win (Again)? are -
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. Thompson Mcdonald's 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.
Stagnating economy with rate increase
– Thompson Mcdonald's 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.
Environmental challenges
– Thompson 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. Thompson Mcdonald's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Thompson Mcdonald's in the Strategy & Execution industry. The Strategy & Execution 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.
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 (in 2013): How to Win (Again)?, Thompson Mcdonald's 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 .
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. Thompson Mcdonald's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Thompson Mcdonald's
– 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 Thompson Mcdonald's.
Shortening product life cycle
– it is one of the major threat that Thompson Mcdonald's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Thompson Mcdonald's.
High dependence on third party suppliers
– Thompson 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.
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.
Regulatory challenges
– Thompson Mcdonald's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
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 Thompson Mcdonald's in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of McDonald's (in 2013): How to Win (Again)? 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 (in 2013): How to Win (Again)? 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 (in 2013): How to Win (Again)? 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 (in 2013): How to Win (Again)? 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 (in 2013): How to Win (Again)? 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 Thompson Mcdonald's needs to make to build a sustainable competitive advantage.
