Question

1. What business model do you think McDonald's is following; how does it make money? (See...

1. What business model do you think McDonald's is following; how does it make money? (See Chapter 5 discussion of business models.) 2. Show a McDonald's SWOT analysis. What do you consider to be McDonald's core competency(ies)? What do you believe is its most significant external threat? 3. What suggestions do you have for resolving McDonald's "identity crisis?

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Answer #1

Answer 1:

McDonald’s is following franchise business model. In order to make money McDonald’s leverage its products to franchises. These franchises have to lease properties at large mark-ups that are owned by McDonald's. This model ensures that McDonald’s is a guaranteed money-maker.

Answer 2:

McDonald's SWOT analysis:

Strengths:

· Having market in over 120 countries.

· Serving quality product with cheapest price.

· Maintaining quality standards.

· Maintaining power over competitors as well as suppliers.

· Brand name.

· Quick adoption of technology.

Weakness:

· Risks of financial deterioration due to franchise model.

· Supply chain hurdles.

· Shaken internal structure.

Opportunities:

· Scope of innovating its products.

· Scope of innovating its current structure and process.

· Rebuilding its image.

· Further expansion.

Threats:

· Risk on investment of its technology.

· Increasing local competition.

· Cultural threat in different countries.

· Threat of ever changing trends.

Answer 3:

In my opinion McDonald's have several core competencies that give it competitive edge. Some of these are as follows:

· Well trained staff,

· Innovative product,

· Implementation of advanced technology,

· Proper location selection,

· Prompt customer service,

· Franchise business model.

Answer 4:

In my opinion most significant external threat to McDonald’s is the intensifying competition. It is hard to maintain its position of market leader for McDonald’s with increasing competition in fast food market.

Answer 5:

My suggestions for resolving McDonald's "identity crisis” are:

· McDonald’s must innovate and add special items in their menu for vegan customers.

· McDonald’s must implement more dynamic strategy for highlighting its CSR in order to attract environmentally conscious customers.

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Answer #2
  1. McDonald's is following a franchise business model, which involves selling the right to operate a McDonald's restaurant to independent franchisees. McDonald's generates revenue through franchise fees, royalties on sales, and rent on properties it owns. Franchisees are responsible for purchasing the necessary equipment, supplies, and ingredients to operate their restaurants, but they must adhere to McDonald's standards for food quality, service, and cleanliness.

  2. SWOT analysis for McDonald's:

Strengths:

  • Strong brand recognition and global presence

  • Extensive menu with a variety of options

  • Efficient supply chain and operations

  • Established franchise system

Weaknesses:

  • Negative perception of the healthfulness of its food

  • Limited customization options for customers

  • Dependence on franchisees for revenue

Opportunities:

  • Expansion into new markets, particularly in developing countries

  • Introduction of healthier menu options

  • Embracing new technologies, such as mobile ordering and delivery

Threats:

  • Increased competition from fast-casual and healthier fast food chains

  • Fluctuations in commodity prices and currency exchange rates

  • Potential health regulations and taxes on fast food

McDonald's core competencies include efficient operations, an established franchise system, and strong brand recognition. Its most significant external threat is increasing competition from fast-casual and healthier fast food chains.

  1. Suggestions for resolving McDonald's "identity crisis" could include:

  • Offering more customizable menu options, such as build-your-own burgers or bowls

  • Introducing more healthy menu options, such as salads or grilled chicken sandwiches

  • Emphasizing the quality and sourcing of its ingredients to address negative perceptions of its food

  • Enhancing its digital ordering and delivery capabilities to cater to changing consumer preferences

  • Focusing on sustainability and social responsibility initiatives to appeal to younger, more socially conscious consumers.


answered by: Hydra Master
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