MBA 5101 Unit III Mini Project : Project Report Topic: McDonald’s Strategic Management Plan

Project Report Topic: McDonald’s Strategic Management Plan

Columbia Southern University

Topic:

“McDonald’s Strategic Management Plan”

Introduction:

McDonald’s is the world’s largest retailer chain of fast food serving almost 35000 restaurants in more than 120 countries spread around the world. McDonald’s serves more than 50 million customers daily. McDonald’s logo “Golden Arches” is one of the world’s most known logos. McDonald’s not only focused on expansion and becoming dominant in world but also focused on its existing restaurants to improve quality and satisfy its customers (David, 2011). McDonald’s effectively and successfully implemented all of its strategies and maintained its market position in 2015 as well and gained competitive advantage over all of its competitors in industry. Increased growth rates, Increase in earnings per share shows McDonald’s is successful to have increased profits as well.

History:

The company was started as a normal BBQ restaurant and was functioned by Richard and Maurice McDonald, who for the first time came up with the idea of restaurant in San Bernardino, California. In 1948, they restricted the business and finally added a new production line to their business i.e., Hamburger. In 1955, Mr. Ray Kroc a business man joined as a franchise agent and took over the right of McDonald brothers & founded the McDonald’s corporation on 15th April, 1955. According to the BBC Report, McDonald’s is the second largest private manager in world after Wal-Mart.

McDonald’s Strategic Position:

MCD’s continuously maintains its competitive edge in the market. It is also listed among top 40 companies by “Black enterprise Magazine”. McDonald’s success is because of its customer focused global business strategy “Plan to Win”, focusing mainly on providing better quality as well instead of just getting expanding. McDonald’s is a risk-free investment industry. Analysts in April 2009 concluded MCD’s great performance and stated it as a “buy,” suggesting low levels of risk for investors.

Organizational Structure of McDonald’s

McDonald’s Corporate Social Responsibility (CSR)

• The organization of McDonald’s has flat structure. McDonald’s comprises of many hierarchy levels with wide span of control. The decisions are made by top management of organization which is headed by CEO (Chief Executive Officer) and board of directors. The organizational chart of McDonald’s is very well designed keeping in view many facts i.e., according to proper hierarchy and chain of control for every employee to whom should he report. According to David (2011), Chief Operating Officer COO should be accountable to answer Chief Executive Officer CEO. Divisional presidents should report to COO and also to CEO. The organizational structure of McDonald’s and the hierarchy of CEO, COO and divisional presidents are labeled appropriately as described by David (2011), which he stated as best. One thing to avoid in making organizational chart is that one specific person should not be reporting to more than one boss. Every employee should only report to one boss.
• McDonald’s organizational structure is good it has generalized strategies for divisions based on performance; due to this McDonald’s has limited flexibility in their organizational structure (Thompson, 2015).
• The hierarchy is further divided into functional departments including operational department, financial department, marketing department, department of research & development, and Human resources department. The structure of organization is divided into corporate management & functional management. Although the management of both departments possesses same set of skills but both these departments function in a very different manner.
• The responsibility of corporate management is to focus on formulating policies, to manage routine operations and to plan how to use effectively human capital and other organizational resources. This management also focus on advertising strategies should keenly assess financial conditions.
• Managers controlling functional departments are responsible to align organizational goals & objectives with organizational strategy and vision. They are responsible for specific units of operation and focus mainly on quality of service provided and operational efficiency.

According to Brammer, S. and Paveline, S. (2004) research, there is a positive connection of between McDonald’s reputation and the good Corporate social responsibility (CSR) Strategy. Fambrun, C. and Shanely, M. (1990) bad publicity can damage the McDonald’s brand name and McDonald’s continuous focus on the CSR strategy has helped the company to be most successful in food industry today. In 2012, McDonald’s annual report announced the record annual revenue of $27 billion capturing the 49.5% of united states market share in hamburgers fast food industry. McDonald’s CSR policy follows Carroll’s (1979) philosophy on CSR strategies.

References