STRATEGIC MANAGEMENT ASSIGNMENT

“The External Assessment ; Mini Paper regarding Learning Exercies 3a & 3b”

COMPILED BY :
GROUP 2

AGUSTHIE IRVAN DHANA (15105224040)

DINI RAHMADIANTI (1610531008)
FIDYA KASIH MAULIDYA (1610531025)

ACCOUNTING DEPARTMENT
FACULTY OF ECONOMICS
ANDALAS UNIVERSITY
2019
McDonald's Corporation is an American fast food company, founded in 1940 as a restaurant
operated by Richard and Maurice McDonald, in San Bernardino, California, United States.
Today, MCD is the largest global food service retailer, with over 31,000 restaurants in 118
countries serving more than 58 million customers each day. In this restaurant industry, Burger
King Holdings, and Yum! Brands, Inc is directly competes with McD. Not only talk about
how is its competitive information, there is also the needs to analyze another external factors
such economic, social, cultural, demographic, environmental, political, governmental, legal,
technological things for the company. In this case, Here is an External Factors Evaluatin (EFE)
Matrix for McDonald’s Corporation based our group point of view:
Key External Factors Weighted
NO Total Weight Rating
OPPORTUNITIES Score
Low-Price that will attrach
1 low-middle income
consumers 12 0.09 4 0.36
2 Brand Loyalty 15 0.11 5 0.56
Demand for Free Wi-Fi vs
3
other competitors 12 0.09 4 0.36
Demand for more healthier
4
product 7 0.05 2.33 0.12
Competitor lack of Coffee
5
Services 6 0.04 2 0.09
Demand for creative
6
product 11 0.08 3.67 0.30
7 Expansion in other country 12 0.09 4 0.36
THREATS
8 Having customer health
issue related to obesity 9 0.07 3 0.20
Low-price from other
9 competitors will cause
Mcdonald lose consumers 8 0.06 2.67 0.16
10 Rising cost due to supplier 9 0.07 3 0.20
11 Awareness of eating
healthy food increase 11 0.08 3.67 0.30
12 There is a policy related to
import raw material 8 0.06 2.67 0.16
13 Decreasing of consumer
due to inflation 8 0.06 2.67 0.16
Mcdonald at the stage of
14 mature, and will
experiences saturation 6 0.04 2 0.09
TOTAL 134 1.00 3.42
From the EFE matrix, we know that McDonald’s could increasing their sales by low price
menu and McCafe and also it is creating more diversified menu with low price. So McDonald’s
having more advantages and opportunity, but still their biggest weaknesses is healthier issue
and lawsuit issue. The EFE matrix shows the 3 participants perspective of McDonalds
opportunities and threats with score up to 5. Which means 1 is very not important and 5 is very
important. and the highest possible total weighted score for this organization is 5 and the lowest
possible total weighted score is 1. Finally, note that the total weighted score of 3.42 is above
the average. So McDonald’s is doing pretty well, taking advantage of the external opportunities
and avoiding the threats facing the firm. There is definitely room for improvement, though,
because the highest total weighted score would be 4.0.

Besides exploring and analyzing the key external factors that will drive any opportunities and
threats for the company, defining firm’s major competitors is in line with the firm’s strategic
position. To defines firm’s major competitors and firm’s strength/weaknesses , The
Competitive Profile Matrix or CPM is used. In CPM Matrix, we can trace the important factors
to being succcesful in the industry. Here is the CPM of McDonald comparing to Burger King
Holding and Yum! Brands Inc.
Burger King
McDonald's Holdings Yum!Brands,Inc
Critical Success Weighted Weighted Weighted
Factors Weight Rating Score Rating Score Rating Score
Global Expansion 0,15 4 0,6 1 0,15 2 0,3
Advertising 0,06 2 0,3 1 0,15 2 0,3
Product Quality 0,11 3 0,45 3 0,45 2 0,3
Customer Services 0,13 3 0,45 3 0,45 2 0,3
Menu Options/
Product Innovation 0,07 3 0,45 2 0,3 4 0,6
Price
Competitiveness 0,1 2 0,3 1 0,15 3 0,45
Customer Loyalty 0,07 3 0,45 1 0,15 2 0,3
Management 0,11 3 0,45 2 0,3 2 0,3
Market Share 0,08 2 0,3 1 0,15 2 0,3
Financial Position 0,09 3 0,45 2 0,3 3 0,45
Hyginene &
Cleanliness 0,03 2 0,3 2 0,3 2 0,3
Total 1,00 4,5 2,85 3,9

Based upon the previous exploration, McDonald’s exceeds its competitors for numerous
reasons, especially correlative of its enhanced product quality, its customer services, customer
loyalty, market share, the maangement and global expansion. Our group see that More
importantly, perhaps, its newer menu offerings including the McCafe and other healthy items
cater to those downgrading their restaurant choices due to economic circumstances and those
who are concerned about healthy options from fast food restaurants. McDonald’s like all its
competitors in the U.S. are contending with the steady rate of unemployment. Therefore
inspiring more people to become loyal consumers and maintaining the customer base
previously established is increasingly important. Yet, McDonald’s global market share, its
number of outlets both abroad and in the U.S. also allows it to absorb more losses in the U.S.
and maintain lower costs overall. With the recent shift in management, however, McDonald’s
will need to maintain a strong and cohesive organization and its adaptability to a changing
marketplace. If it fails to do this, the balance could shift and give its competitors an edge.