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BUS444 Strategic Management_FinalPresentation

  1. Strategic Management CLASS2-GROUP3 Tran Nguyen Ngoc Tam #362719 Le Thi Thu Huong #362702
  2. Brief Introduction The world’s largest chain of hamburger fast food restaurants. Serving around 86 million customers daily in 119 countries. 2
  3.  Headquarters: Oak Brook, Illinois and United States of America.  Founded: May 15th, 1940  CEO: Donald Thompson.  Founders: Richard and Maurice McDonald. 3
  4. McDonald’s Mission Statement To be our customers' favorite place and way to eat and drink. 4 “ ”
  5. 5 McDonald’s Vision Statement Our overall vision is for McDonald’s to become a modern, progressive burger company delivering a contemporary customer experience. “ ”
  6. Strategic Objectives  McDonald's main aims are to serve good food in a friendly and fun environment.  To be a socially responsible company.  To provide good returns to its shareholders. 6
  7. Competitors 7
  8. McDonald’s Primary Competitor 8
  9. o Striving to be cost leaders and cannot be matched by their competitors. o The speedy delivery of food. o Strong global presence and largest market share in fast-food industry. o They have been in the fast-food business for a longer time than their competitors.
  10. SWOT Analysis 10
  11. 11  Strong brand image.  High market penetration.  Moderate differentiation of products.  Global Operations.  Decrease in consumers’ purchasing power due to crisis.  Cross-cultural difference.  Increasing trend toward healthy food.  New programs of rivals (promotion, new menu,..). S T  Easily imitable business.  Limited product mix.  Low control on franchise model.  Large franchisees.  Target consumers by understanding social needs.  Expansion in emerging market.  Increasing interests in healthy food.  Prosperous developing markets (China, Hongkong, Russia,..) W O
  12. Demographic of HCMC by age structure Population: 8.426.000 (July 2016) 12 3.808.552 1.407.142 2.005.388 690.932 513.986
  13. Demographic by gender Population in 2015: 8.224.000 13 4.276.480 3.947.520
  14. 14 Demographic by income level 9.2 Million (VND) / month 7.6 7 20 2.3 2.5
  15. Religions 15 85.5% 6.8% 2%
  16. Description Cultural diversity Changing demand is different in society to society and country to country. In order to fulfil the customers' expectation, McDonald's needs to research the market and also needs to provide effective food menu. While people in western countries such as the United States may enjoy hamburgers and French fries,  In India, Hindu people prefer vegetable, Muslim people avoid pork.  In Vietnam, Thailand, Hongkong, people prefer rice. 16 The Sociocultural Segment
  17. Description Healthy lifestyle trend The healthy lifestyle trend is always been a threat to McDonald’s because many of McDonald’s products are often criticized for their negative health effects. Customers do not only want a fast and convenient meal, but also a healthy one. Nonetheless, the company has the opportunity to improve the healthfulness of its products. 17 The Sociocultural Segment
  18. 18 Cultural Values
  19. 19 Cultural Values Score Viet Nam The United States Power Distance 70 Vietnam scores high on this dimension (score of 70) which means that people accept a hierarchical order in which everybody has a place and which needs no further justification. 40 The fact that a society’s inequality is endorsed by the followers as much as by the leaders. Individualism 20 Vietnam, with a score of 20 is a collectivistic society 91 The American premise of “liberty and justice for all.” This is evidenced by an explicit emphasis on equal rights in all aspects of American society and government. Masculinity 40 Vietnam scores 40 on this dimension and is thus considered a Feminine society 62 A low score (Feminine) on the dimension means that the dominant values in society are caring for others and quality of life
  20. 20 Cultural Values Score Viet Nam The United States Uncertainty Avoidance 30 Vietnam scores 30 on this dimension and thus has a low preference for avoiding uncertainty. 46 Americans tend to be more tolerant of ideas or opinions from anyone and allow the freedom of expression. At the same time, Americans do not require a lot of rules and are less emotionally expressive than higher-scoring cultures. Long Term Orientation 57 Vietnam scores 57, making it a pragmatic culture 26 American businesses measure their performance on a short-term basis, with profit and loss statements being issued on a quarterly basis. This also drives individuals to strive for quick results within the work place Indulgence 35 A low score of 35 on this dimension indicates that the culture of Vietnam is characterized as Restrained 68 Work hard and play hard.
  21. Political Segment 21 Increasing international trade agreements (opportunity). Pending tax reform (opportunity). Evolving public health policies (threat and opportunity).
  22. Economic Segment 22 Cost of capital is the main determinant of the firm escalation and growth. The discrepancies between an industrial development and countries in different periods of economic have a huge effect on price setting.
  23. Technological Segment 23 Provides free wireless internet access. The most outstanding innovation: drive-thru section and a touch-activated screen. Provide features: music at queuing vehicles, a wall of window on the drive-thru side...  McDonald’s has more outstanding than others because it has strong financial capital, global reputation and good relationships with the local authority.
  24. Who are our consumers? 24 Kids (3 – 7 years old) Family with children Students Busy adults  Happy Meal with toys.  Play ground  Birthday party  Weekend outings  Happy Meal  Drive-thru  Lunch break or dinner with friends.  A place to study.  Student Meals  “Grab and go”  Drive-thru  Take-away coffee.
  25. Value Chain 25 Inbound Logistics Operation Outbound Logistics Marketin g & Sales Service Procurement Technology Development Human Resource Management Firm infrastructure Margin Support activities Primaryactivities
  26. 26 Primary Activities Description Inbound Logistics • McDonald’s purchases raw vegetables and other raw materials from its fixed, pre- defined suppliers only  therefore by increasing capital and labor, their production will increase proportionately. Operations • Instead of having lots of different equipment and stations for preparing a wide of variety food. • The kitchen had a very large grill, a dressing station where people added the same condiments to every burgers, a fryer where one person can made french-fries, a soda fountain and milkshake machine for desserts and beverages. • The mass-production process requires each restaurants chain to have a distribution network to carry the food to every restaurant. • Warehousing and distribution are centralized rather than handled by each restaurant. Outbound Logistics • Macdonald’s restaurants operate in the following formats: sit-down restaurants, drive-thru, counter-service outlets in food courts. • The process of obtaining meals in sit-down restaurant format is conventional process of dining out in a restaurant and it involves a waiter or waitress taking order and delivering the food. McDonald’s does not offer home delivery services yet. Marketing & Sales • You can find McDonald’s in 119 countries around the world. McDonald’s operates over 31,000 restaurants worldwide. • The company makes significant use of billboards and signage, usual media (television, radio, and newspaper) and sponsors sporting events. Service • Free Wi-Fi, Gift Card, Play round, Birthday parties.
  27. Description Procurement • McDonalds E-Procurement System is basically a main reason for their successful supply chain management. • It is so efficient that it provides the backbone not only to all the logistics but the whole McDonalds supply chain management. • It is a procurement hub launched in 2001 allow all of McDonald’s franchises across the globe to buy everything needed to run their restaurants. Technology development • Focus on modernizing restaurants, evolving the menu and engineering value. • McDonald’s enters five-year IT support deal with Fujitsu. HRM • Working at McDonald’s could be said to offer advantages for some employees who want flexible hours and are engaged in other activities and responsibilities. Firm infrastructure • Providing eco-friendly workplaces and restaurants that reflect sustainability goals and demonstrate environmental stewardship in the workplace. 27 Support Activities
  28. Porter’s 5 forces 28 Force Influence Factors Threat of competition High • Very similar products in the Fast Food industry. • High competitors advertising capabilities. • Location of outlets are close. • Major competitors – Burger King and YumBrand INC. Threat of new entrance Moderate • Easy to enter. • Low setup cost. • Lack of ability to compete with McDonald’s ( cost efficiency, customer awareness). Threat of substitutes High • Easily substituted by others: meals prepared at home, restaurants, deliveries, and stores. • Customers have become more aware of the health effects of fast foods. • Other substitutes are becoming more and more attractive. Bargaining power of suppliers Low • World largest restaurant chain in sales. • Most of them owe McDonald’s for their own existence. • Low power of suppliers – lower the cost of raw materials and high competitive price. Bargaining power of buyers High • The customer has so many options on the fast food chains. • Have to maintain prices very competitive. • Keep the level of customer services better.
  29. Foreign Exchange 29
  30. Product Life Cycle 30  The company is in the market maturity stage of the product life cycle.  Make products more appealing to the consumers in order to sustain or increase their market share  The features of their products might be improved by adding more items on menu. For example:  More choices for customers for their meals: soft drinks, chicken nuggets, snack wraps or ice-cream…  Introducing a new type of food called a salad.  Shown their competitors that they are better by launching variety products in order to gratify their customer.
  31. 31
  32. 1. Strengths. Well-known brand name. Strong financial performance. Children targeting. Adapted to local market. Partnerships with the best brands. Independent franchisees. 2. Weaknesses. A vulnerable and sensitive target. High Employee Turnover. Unhealthy food menu. Negative publicity. Price competition. Few seasonal products (salad, ice-cream…) 3. Opportunities. Use ‘green’ energy and packaging. Widen its international expansion. Innovations in healthier menu. Upscale some of its restaurant settings at luxurious locations. More focus on CRM. Providing coupons of healthy menu. 4. Threats. Emergence of numerous fast food competitors. Health issue pressure. Global economic recession/ Currency fluctuations. Heavy investments on promotional campaigns. Maintaining marketing strategy that focuses on kids. Increasing trends toward diet/ healthy eating. 32
  33. 33 1. Strengths.  Well-known brand name.  Strong financial performance.  Children targeting.
  34. 34  Adapted to local market.  Partnerships with the best brands.  Independent franchisees. 1. Strengths.
  35. 35 2. Weaknesses.  A vulnerable and sensitive target.  High Employee Turnover.
  36. 36  Unhealthy food menu.  Negative publicity.  Price competition.  Few seasonal products. 2. Weaknesses.
  37. • Use ‘green’ energy and packaging. • Widen its international expansion (especially to Asian markets). • Innovations in healthier menu (morning baguette, salad, fruit, yoghurt,…) 37 3. Opportunities
  38. • Upscale some of its restaurant settings at luxurious locations. • More focus on CRM (specific name on bill instead of numbers, special discount or gift on customer’s birthday,…). 38 3. Opportunities • Providing coupons of healthy menu.
  39. 4. Threats • Emergence of numerous fast food competitors. 39 • Health issue pressure.
  40. • Increasing trends toward diet/ healthy eating. 40 4. Threats
  41. • Global economic recession/ Currency fluctuations. 41 4. Threats • Heavy investments on promotional campaigns. (TV, Press, online activities, outdoor, popular partners like Kodak, Visa,,…)
  42. • Maintaining marketing strategy that focuses on kids. 42 4. Threats
  43. Product: Happy Meal 43
  44. 44 Product: Happy Meal A Happy Meal usually contains these following main items:  Aggressive marketing to children at a very young age to develop trust and reliance.  Lower calories, fat-free chocolate milk, juice.  Kids love toys  McDonald’s distributes 1.5 million toys worldwide per year.
  45. Thank You For Your Listening! i‘m lovin’ it 45
  46. References 46 • • • • • • • customers-month.html • performance/2643491.html •

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