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 - – increasing household debt because of falling income levels, technology disruption, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing commodity prices, challanges to central banks by blockchain based private currencies,
increasing energy prices, increasing government debt because of Covid-19 spendings, 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 -
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.
Analytics focus
– Thompson 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 Marne L. Arthaud-Day, Frank T. Rothaermel, Justin Collins 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.
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.
Strong track record of project management
– Thompson 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.
Training and development
– Thompson Mcdonald's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in McDonald's (in 2013): How to Win (Again)? 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.
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.
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.
Ability to recruit top talent
– Thompson Mcdonald's is one of the leading recruiters in the industry. Managers in the McDonald's (in 2013): How to Win (Again)? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
Innovation driven organization
– Thompson Mcdonald's is one of the most innovative firm in sector. Manager in McDonald's (in 2013): How to Win (Again)? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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 -
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.
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.
No frontier risks strategy
– After analyzing the HBR case study McDonald's (in 2013): How to Win (Again)?, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Thompson 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.
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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Thompson Mcdonald's supply chain. Even after few cautionary changes mentioned in the HBR case study - McDonald's (in 2013): How to Win (Again)?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Thompson Mcdonald's vulnerable to further global disruptions in South East Asia.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study McDonald's (in 2013): How to Win (Again)?, is just above the industry average. Thompson Mcdonald's 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 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.
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.
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.
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.
Building a culture of innovation
– managers at Thompson 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 Strategy & Execution segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Thompson Mcdonald's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Learning at scale
– Online learning technologies has now opened space for Thompson 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Thompson Mcdonald's 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. Thompson Mcdonald's 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Thompson Mcdonald's can use these opportunities to build new business models that can help the communities that Thompson Mcdonald's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Thompson Mcdonald's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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 -
Technology acceleration in Forth Industrial Revolution
– Thompson Mcdonald's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Thompson Mcdonald's 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 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.
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.
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 .
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.
Consumer confidence and its impact on Thompson Mcdonald's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Thompson 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 McDonald's (in 2013): How to Win (Again)? .
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.
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.
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 Thompson Mcdonald's business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.