Case Study Description of McDonald's Twitter Campaign: Hype Versus Reality
In early January 2012, the director of social media for the McDonald's Corporation (McDonald's) was challenged with a tall order. The corporation had just launched a large public relations campaign using the Twitter hashtag "#MeetTheFarmers" to promote connections with family farms and local suppliers. Maximizing a Twitter Promoted Trends expenditure, the director had switched the hashtag from "#MeetTheFarmers" to "#McDStories" halfway through the first day of the campaign. However, numerous detractors used the hashtag to express negative comments towards the corporation. A few days later, the media started to run negative coverage with mocking headlines and articles providing screenshots of the negative tweets but no statistics that explained or put proper context to the situation. The director needed to devise a better strategy for McDonald's social media campaigns in order to prevent potential media fallouts.
Swot Analysis of "McDonald's Twitter Campaign: Hype Versus Reality" written by Jana Seijts, Paul Bigus includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hashtag Mcdonald's facing as an external strategic factors. Some of the topics covered in McDonald's Twitter Campaign: Hype Versus Reality case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the McDonald's Twitter Campaign: Hype Versus Reality casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, wage bills are increasing, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of McDonald's Twitter Campaign: Hype Versus Reality
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in McDonald's Twitter Campaign: Hype Versus Reality case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hashtag Mcdonald's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hashtag 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 Twitter Campaign: Hype Versus Reality can be done for the following purposes –
1. Strategic planning using facts provided in McDonald's Twitter Campaign: Hype Versus Reality case study
2. Improving business portfolio management of Hashtag 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 Hashtag Mcdonald's
Strengths McDonald's Twitter Campaign: Hype Versus Reality | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hashtag Mcdonald's in McDonald's Twitter Campaign: Hype Versus Reality Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the McDonald's Twitter Campaign: Hype Versus Reality Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Hashtag 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.
Superior customer experience
– The customer experience strategy of Hashtag Mcdonald's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Hashtag 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 Hashtag Mcdonald's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in McDonald's Twitter Campaign: Hype Versus Reality Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Hashtag 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.
Sustainable margins compare to other players in Strategy & Execution industry
– McDonald's Twitter Campaign: Hype Versus Reality firm has clearly differentiated products in the market place. This has enabled Hashtag Mcdonald's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Hashtag Mcdonald's to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Hashtag Mcdonald's is one of the leading recruiters in the industry. Managers in the McDonald's Twitter Campaign: Hype Versus Reality are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hashtag Mcdonald's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hashtag 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.
Ability to lead change in Strategy & Execution field
– Hashtag 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 Hashtag Mcdonald's 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)
– Hashtag 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 Twitter Campaign: Hype Versus Reality - 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
– Hashtag 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 Twitter Campaign: Hype Versus Reality 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.
Highly skilled collaborators
– Hashtag 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 Twitter Campaign: Hype Versus Reality HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses McDonald's Twitter Campaign: Hype Versus Reality | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of McDonald's Twitter Campaign: Hype Versus Reality are -
Skills based hiring
– The stress on hiring functional specialists at Hashtag Mcdonald's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hashtag Mcdonald's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study McDonald's Twitter Campaign: Hype Versus Reality can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Hashtag Mcdonald's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Hashtag Mcdonald's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Hashtag 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 Twitter Campaign: Hype Versus Reality should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study McDonald's Twitter Campaign: Hype Versus Reality 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 Hashtag Mcdonald's 's lucrative customers.
Need for greater diversity
– Hashtag Mcdonald's 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 Twitter Campaign: Hype Versus Reality, is just above the industry average. Hashtag 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 bargaining power of channel partners
– Because of the regulatory requirements, Jana Seijts, Paul Bigus suggests that, Hashtag 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.
Capital Spending Reduction
– Even during the low interest decade, Hashtag 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.
Slow to strategic competitive environment developments
– As McDonald's Twitter Campaign: Hype Versus Reality HBR case study mentions - Hashtag 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.
Interest costs
– Compare to the competition, Hashtag Mcdonald's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities McDonald's Twitter Campaign: Hype Versus Reality | 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 Twitter Campaign: Hype Versus Reality are -
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 Hashtag 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.
Better consumer reach
– The expansion of the 5G network will help Hashtag Mcdonald's to increase its market reach. Hashtag 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hashtag Mcdonald's can use these opportunities to build new business models that can help the communities that Hashtag Mcdonald's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Hashtag Mcdonald's in the consumer business. Now Hashtag Mcdonald's can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hashtag 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.
Loyalty marketing
– Hashtag 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.
Building a culture of innovation
– managers at Hashtag 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hashtag 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 Twitter Campaign: Hype Versus Reality, 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
– Hashtag 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hashtag 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.
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. Hashtag 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.
Manufacturing automation
– Hashtag 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.
Creating value in data economy
– The success of analytics program of Hashtag Mcdonald's has opened avenues for new revenue streams for the organization in the industry. This can help Hashtag Mcdonald's to build a more holistic ecosystem as suggested in the McDonald's Twitter Campaign: Hype Versus Reality case study. Hashtag Mcdonald's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats McDonald's Twitter Campaign: Hype Versus Reality 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 Twitter Campaign: Hype Versus Reality are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hashtag 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.
Increasing wage structure of Hashtag 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 Hashtag Mcdonald's.
Regulatory challenges
– Hashtag 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.
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. Hashtag 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.
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 Hashtag Mcdonald's in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Hashtag 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hashtag Mcdonald's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Hashtag 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.
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 Hashtag Mcdonald's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hashtag 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 Twitter Campaign: Hype Versus Reality .
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hashtag Mcdonald's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Hashtag 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, Hashtag 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.
Weighted SWOT Analysis of McDonald's Twitter Campaign: Hype Versus Reality 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 Twitter Campaign: Hype Versus Reality 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 Twitter Campaign: Hype Versus Reality 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 Twitter Campaign: Hype Versus Reality 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 Twitter Campaign: Hype Versus Reality 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 Hashtag Mcdonald's needs to make to build a sustainable competitive advantage.