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 - – geopolitical disruptions, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
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.
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.
Organizational Resilience of Hashtag Mcdonald's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hashtag Mcdonald's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
Diverse revenue streams
– Hashtag Mcdonald's is present in almost all the verticals within the industry. This has provided firm in McDonald's Twitter Campaign: Hype Versus Reality case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Hashtag Mcdonald's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hashtag Mcdonald's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Hashtag Mcdonald's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hashtag 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.
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 -
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.
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 Hashtag Mcdonald's supply chain. Even after few cautionary changes mentioned in the HBR case study - McDonald's Twitter Campaign: Hype Versus Reality, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hashtag Mcdonald's vulnerable to further global disruptions in South East Asia.
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.
No frontier risks strategy
– After analyzing the HBR case study McDonald's Twitter Campaign: Hype Versus Reality, 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.
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.
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 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.
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.
Lack of clear differentiation of Hashtag Mcdonald's products
– To increase the profitability and margins on the products, Hashtag Mcdonald's needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study McDonald's Twitter Campaign: Hype Versus Reality 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 Twitter Campaign: Hype Versus Reality can leverage the sales team experience to cultivate customer relationships as Hashtag Mcdonald's is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Hashtag Mcdonald's, firm in the HBR case study McDonald's Twitter Campaign: Hype Versus Reality needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
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.
Developing new processes and practices
– Hashtag 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hashtag Mcdonald's 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hashtag Mcdonald's is facing challenges because of the dominance of functional experts in the organization. McDonald's Twitter Campaign: Hype Versus Reality 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.
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.
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.
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.
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.
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. Hashtag Mcdonald's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Hashtag 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. Hashtag 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.
Using analytics as competitive advantage
– Hashtag Mcdonald's 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 Twitter Campaign: Hype Versus Reality - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hashtag Mcdonald's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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 .
Environmental challenges
– Hashtag 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. Hashtag Mcdonald's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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 Twitter Campaign: Hype Versus Reality, Hashtag 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 .
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.
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.
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.
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.
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.
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.
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.
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 Hashtag Mcdonald's business can come under increasing regulations regarding data privacy, data security, etc.
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.
