McDonald's Japan (A): The Shanghai Husi Debacle SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of McDonald's Japan (A): The Shanghai Husi Debacle
In July 2014, the expatriate CEO of McDonald's Japan (MDJ) faced a crisis after a video was broadcast accusing one of the company's China-based food suppliers of serious health and sanitation violations. Although MDJ was the biggest brand in Japan's fast food industry, the company's sales had been falling since 2008, and its profitability had deteriorated dramatically since 2012. The CEO, who had recently taken over at MDJ, urgently needed to turn around the company's situation and deal with the crisis at hand. How could she reassure Japanese consumers and put the company back on the road to growth? Derek Lehmberg is affiliated with North Dakota State University.
Swot Analysis of "McDonald's Japan (A): The Shanghai Husi Debacle" written by Derek Lehmberg includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mdj Mcdonald's facing as an external strategic factors. Some of the topics covered in McDonald's Japan (A): The Shanghai Husi Debacle case study are - Strategic Management Strategies, Risk management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the McDonald's Japan (A): The Shanghai Husi Debacle casestudy better are - – there is increasing trade war between United States & China, increasing transportation and logistics costs, technology disruption, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
Introduction to SWOT Analysis of McDonald's Japan (A): The Shanghai Husi Debacle
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in McDonald's Japan (A): The Shanghai Husi Debacle case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mdj Mcdonald's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mdj 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 Japan (A): The Shanghai Husi Debacle can be done for the following purposes –
1. Strategic planning using facts provided in McDonald's Japan (A): The Shanghai Husi Debacle case study
2. Improving business portfolio management of Mdj Mcdonald's
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mdj Mcdonald's
Strengths McDonald's Japan (A): The Shanghai Husi Debacle | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mdj Mcdonald's in McDonald's Japan (A): The Shanghai Husi Debacle Harvard Business Review case study are -
Diverse revenue streams
– Mdj Mcdonald's is present in almost all the verticals within the industry. This has provided firm in McDonald's Japan (A): The Shanghai Husi Debacle 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.
Ability to recruit top talent
– Mdj Mcdonald's is one of the leading recruiters in the industry. Managers in the McDonald's Japan (A): The Shanghai Husi Debacle are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Mdj Mcdonald's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mdj Mcdonald's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Mdj 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.
Low bargaining power of suppliers
– Suppliers of Mdj Mcdonald's in the sector have low bargaining power. McDonald's Japan (A): The Shanghai Husi Debacle has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mdj Mcdonald's to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Mdj 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.
Innovation driven organization
– Mdj Mcdonald's is one of the most innovative firm in sector. Manager in McDonald's Japan (A): The Shanghai Husi Debacle Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Mdj 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 Derek Lehmberg 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.
Superior customer experience
– The customer experience strategy of Mdj Mcdonald's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Mdj 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.
Training and development
– Mdj 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 Japan (A): The Shanghai Husi Debacle 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.
Successful track record of launching new products
– Mdj Mcdonald's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mdj 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 Japan (A): The Shanghai Husi Debacle | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of McDonald's Japan (A): The Shanghai Husi Debacle are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Mdj Mcdonald's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study McDonald's Japan (A): The Shanghai Husi Debacle can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study McDonald's Japan (A): The Shanghai Husi Debacle, in the dynamic environment Mdj Mcdonald's has struggled to respond to the nimble upstart competition. Mdj Mcdonald's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As McDonald's Japan (A): The Shanghai Husi Debacle HBR case study mentions - Mdj Mcdonald's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study McDonald's Japan (A): The Shanghai Husi Debacle 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 Mdj Mcdonald's 's lucrative customers.
Need for greater diversity
– Mdj 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.
No frontier risks strategy
– After analyzing the HBR case study McDonald's Japan (A): The Shanghai Husi Debacle, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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, Mdj 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.
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 Mdj Mcdonald's supply chain. Even after few cautionary changes mentioned in the HBR case study - McDonald's Japan (A): The Shanghai Husi Debacle, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mdj Mcdonald's vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Mdj 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 Japan (A): The Shanghai Husi Debacle should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the McDonald's Japan (A): The Shanghai Husi Debacle 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 Mdj Mcdonald's has relatively successful track record of launching new products.
High cash cycle compare to competitors
Mdj 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.
Opportunities McDonald's Japan (A): The Shanghai Husi Debacle | 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 Japan (A): The Shanghai Husi Debacle are -
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 Mdj Mcdonald's in the consumer business. Now Mdj Mcdonald's can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mdj 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 Leadership & Managing People segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mdj 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
– Mdj 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mdj 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 Japan (A): The Shanghai Husi Debacle, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Mdj 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 Leadership & Managing People segment.
Creating value in data economy
– The success of analytics program of Mdj Mcdonald's has opened avenues for new revenue streams for the organization in the industry. This can help Mdj Mcdonald's to build a more holistic ecosystem as suggested in the McDonald's Japan (A): The Shanghai Husi Debacle case study. Mdj Mcdonald's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mdj Mcdonald's is facing challenges because of the dominance of functional experts in the organization. McDonald's Japan (A): The Shanghai Husi Debacle 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mdj 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. Mdj 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.
Developing new processes and practices
– Mdj Mcdonald's can develop new processes and procedures in Leadership & Managing People 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.
Using analytics as competitive advantage
– Mdj 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 Japan (A): The Shanghai Husi Debacle - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mdj Mcdonald's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Mdj 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.
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. Mdj Mcdonald's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats McDonald's Japan (A): The Shanghai Husi Debacle 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 Japan (A): The Shanghai Husi Debacle are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mdj Mcdonald's in the Leadership & Managing People industry. The Leadership & Managing People 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.
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. Mdj Mcdonald's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Mdj 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.
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 Mdj Mcdonald's in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Mdj 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.
Regulatory challenges
– Mdj 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 Leadership & Managing People industry regulations.
Increasing wage structure of Mdj 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 Mdj Mcdonald's.
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 Mdj Mcdonald's business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Mdj 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. Mdj Mcdonald's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mdj 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
– Mdj Mcdonald's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Mdj Mcdonald's needs to keep up with the evolution of technology in the Leadership & Managing People 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
– Mdj 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.
Weighted SWOT Analysis of McDonald's Japan (A): The Shanghai Husi Debacle 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 Japan (A): The Shanghai Husi Debacle 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 Japan (A): The Shanghai Husi Debacle 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 Japan (A): The Shanghai Husi Debacle 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 Japan (A): The Shanghai Husi Debacle 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 Mdj Mcdonald's needs to make to build a sustainable competitive advantage.