×




Golden Arch Hotel: McDonald's Adventure in the Hotel Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Golden Arch Hotel: McDonald's Adventure in the Hotel Industry


This is a Thunderbird Case Study.In 2001, McDonald's launched a new venture by opening two hotels in Switzerland (Zurich and Lully) under the name "Golden Arch Hotel." The hotels were positioned as four-star accommodations with cutting-edge in-room technology and unique, modern interior design. Testimonials of guests were mixed following their stays in the Golden Arch Hotels. Most seemed to agree, however, that the four-star rating didn't seem to match with McDonald's image. Given the saturated world hamburger market, McDonald's headquarters in Chicago had decided to launch a "diversification" strategy to foster new ideas and concepts worldwide. Urs Hammer, McDonald's Switzerland long-time CEO, proposed a foray into the hotel business building on McDonald's image of cleanliness and fast, friendly service. With McDonald's strong global brand recognition and the transferable competencies from restaurant to hospitality, Hammer was convinced the project would be a success. The hotel market in Zurich was booming with multiple building projects under way. The growth was happening so rapidly, in fact, that analysts predicted overcapacity in the very near future. In a fiercely competitive hotel market, Golden Arch Hotels was faced with the challenge of how to profitably target the key customer segments: travel groups, business travelers, and frequent travelers (FITs). With only two locations in one highly competitive country, how well is Golden Arch positioned in Switzerland, and how can the model be expanded and launched throughout the world? The case addresses: global marketing, positioning, segmenting, service marketing and profit model.

Authors :: Stefan Michel

Topics :: Technology & Operations

Tags :: , SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Golden Arch Hotel: McDonald's Adventure in the Hotel Industry" written by Stefan Michel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mcdonald's Arch facing as an external strategic factors. Some of the topics covered in Golden Arch Hotel: McDonald's Adventure in the Hotel Industry case study are - Strategic Management Strategies, and Technology & Operations.


Some of the macro environment factors that can be used to understand the Golden Arch Hotel: McDonald's Adventure in the Hotel Industry casestudy better are - – wage bills are increasing, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, technology disruption, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc



12 Hrs

$59.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now

24 Hrs

$49.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now

48 Hrs

$39.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now







Introduction to SWOT Analysis of Golden Arch Hotel: McDonald's Adventure in the Hotel Industry


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Golden Arch Hotel: McDonald's Adventure in the Hotel Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mcdonald's Arch, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mcdonald's Arch 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry can be done for the following purposes –
1. Strategic planning using facts provided in Golden Arch Hotel: McDonald's Adventure in the Hotel Industry case study
2. Improving business portfolio management of Mcdonald's Arch
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mcdonald's Arch




Strengths Golden Arch Hotel: McDonald's Adventure in the Hotel Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Mcdonald's Arch in Golden Arch Hotel: McDonald's Adventure in the Hotel Industry Harvard Business Review case study are -

High brand equity

– Mcdonald's Arch has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mcdonald's Arch to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Learning organization

- Mcdonald's Arch 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 Mcdonald's Arch is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Golden Arch Hotel: McDonald's Adventure in the Hotel Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Operational resilience

– The operational resilience strategy in the Golden Arch Hotel: McDonald's Adventure in the Hotel Industry Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Superior customer experience

– The customer experience strategy of Mcdonald's Arch in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– Mcdonald's Arch 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 Stefan Michel 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.

Low bargaining power of suppliers

– Suppliers of Mcdonald's Arch in the sector have low bargaining power. Golden Arch Hotel: McDonald's Adventure in the Hotel Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mcdonald's Arch to manage not only supply disruptions but also source products at highly competitive prices.

Organizational Resilience of Mcdonald's Arch

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mcdonald's Arch does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Ability to lead change in Technology & Operations field

– Mcdonald's Arch 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 Mcdonald's Arch in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Ability to recruit top talent

– Mcdonald's Arch is one of the leading recruiters in the industry. Managers in the Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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 Technology & Operations segment

- digital transformation varies from industry to industry. For Mcdonald's Arch digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mcdonald's Arch 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.

Training and development

– Mcdonald's Arch has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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.

Innovation driven organization

– Mcdonald's Arch is one of the most innovative firm in sector. Manager in Golden Arch Hotel: McDonald's Adventure in the Hotel Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.






Weaknesses Golden Arch Hotel: McDonald's Adventure in the Hotel Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Golden Arch Hotel: McDonald's Adventure in the Hotel Industry are -

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Golden Arch Hotel: McDonald's Adventure in the Hotel Industry, in the dynamic environment Mcdonald's Arch has struggled to respond to the nimble upstart competition. Mcdonald's Arch has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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 Mcdonald's Arch has relatively successful track record of launching new products.

Interest costs

– Compare to the competition, Mcdonald's Arch 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.

High operating costs

– Compare to the competitors, firm in the HBR case study Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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 Mcdonald's Arch 's lucrative customers.

Low market penetration in new markets

– Outside its home market of Mcdonald's Arch, firm in the HBR case study Golden Arch Hotel: McDonald's Adventure in the Hotel Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow decision making process

– As mentioned earlier in the report, Mcdonald's Arch 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. Mcdonald's Arch 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.

Slow to strategic competitive environment developments

– As Golden Arch Hotel: McDonald's Adventure in the Hotel Industry HBR case study mentions - Mcdonald's Arch 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.

Need for greater diversity

– Mcdonald's Arch 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry, is just above the industry average. Mcdonald's Arch 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.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Golden Arch Hotel: McDonald's Adventure in the Hotel Industry, it seems that the employees of Mcdonald's Arch don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

Lack of clear differentiation of Mcdonald's Arch products

– To increase the profitability and margins on the products, Mcdonald's Arch needs to provide more differentiated products than what it is currently offering in the marketplace.




Opportunities Golden Arch Hotel: McDonald's Adventure in the Hotel Industry | 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry are -

Manufacturing automation

– Mcdonald's Arch can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.

Better consumer reach

– The expansion of the 5G network will help Mcdonald's Arch to increase its market reach. Mcdonald's Arch 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, Mcdonald's Arch can use these opportunities to build new business models that can help the communities that Mcdonald's Arch operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Mcdonald's Arch can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Using analytics as competitive advantage

– Mcdonald's Arch 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mcdonald's Arch to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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. Mcdonald's Arch can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Learning at scale

– Online learning technologies has now opened space for Mcdonald's Arch 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.

Buying journey improvements

– Mcdonald's Arch can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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.

Developing new processes and practices

– Mcdonald's Arch can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Creating value in data economy

– The success of analytics program of Mcdonald's Arch has opened avenues for new revenue streams for the organization in the industry. This can help Mcdonald's Arch to build a more holistic ecosystem as suggested in the Golden Arch Hotel: McDonald's Adventure in the Hotel Industry case study. Mcdonald's Arch can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Mcdonald's Arch in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.

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 Mcdonald's Arch 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Mcdonald's Arch can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.




Threats Golden Arch Hotel: McDonald's Adventure in the Hotel Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Golden Arch Hotel: McDonald's Adventure in the Hotel Industry are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Golden Arch Hotel: McDonald's Adventure in the Hotel Industry, Mcdonald's Arch may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .

Consumer confidence and its impact on Mcdonald's Arch 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 Mcdonald's Arch.

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 Mcdonald's Arch in the Technology & Operations sector and impact the bottomline of the organization.

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.

Stagnating economy with rate increase

– Mcdonald's Arch 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

– Mcdonald's Arch 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. Mcdonald's Arch can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.

Regulatory challenges

– Mcdonald's Arch 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 Technology & Operations industry regulations.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mcdonald's Arch with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Mcdonald's Arch in the Technology & Operations industry. The Technology & Operations 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.

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. Mcdonald's Arch 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.

Easy access to finance

– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mcdonald's Arch 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

– Mcdonald's Arch has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Mcdonald's Arch needs to keep up with the evolution of technology in the Technology & Operations 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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 Golden Arch Hotel: McDonald's Adventure in the Hotel Industry 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 Mcdonald's Arch needs to make to build a sustainable competitive advantage.



--- ---

Ken Langone: Member, GE Compensation Committee SWOT Analysis / TOWS Matrix

Suraj Srinivasan, Lizzie Gomez , Finance & Accounting


Background on the Technology of Molecular Diagnostics SWOT Analysis / TOWS Matrix

Regina E. Herzlinger, Jason Sanders , Organizational Development


Radiant Cosmetics: What's in a Pout? SWOT Analysis / TOWS Matrix

Robert C. Pozen, Mary Ellen Hammond , Leadership & Managing People


Entrepreneurial Leadership at Maritime Bus SWOT Analysis / TOWS Matrix

Edward Gamble, Simon Parker, Peter Moroz, Parker Baglole , Leadership & Managing People


Meridian Systems SWOT Analysis / TOWS Matrix

Frank V. Cespedes, Michael J. Roberts , Innovation & Entrepreneurship


Gruppo illy SpA (B): Universita del Caffe SWOT Analysis / TOWS Matrix

Glenn Carroll, Hayagreeva Rao, Victoria Chang , Strategy & Execution


Grand Junction SWOT Analysis / TOWS Matrix

H. Irving Grousbeck, Nick Mansour , Innovation & Entrepreneurship


Celtel International B.V.: June 2004 (B) SWOT Analysis / TOWS Matrix

G. Felda Hardymon, Ann Leamon , Innovation & Entrepreneurship


Chicken Republic SWOT Analysis / TOWS Matrix

Jose B. Alvarez, Natalie Kindred , Innovation & Entrepreneurship