External and Internal Analysis Mcdonalds
Date: August 23, 2010
To: Professor Kopka
From: Veronica Salas
Subject: Strategic Analysis for McDonalds
EXTERNAL AND INTERNAL ENVIRONMENTAL ANALYSIS
External Analysis
There are two conditions that are most significant in McDonald’s external environment that are: 1. The new trend in which customers are changing fast –food restaurants to healthier ones. 2. The arising competition to achieve growth in this industry.
The fast-food industry is very complex and saturated. The key success factors in APPENDIX 1 show that in order to be able to compete there is a need for research and development, achieve differentiation with your competition, create quality with your products, and be price competitive. Large capital is needed to be able to develop new products in order to differentiate among competitors. The creation of quality is very important because the switching costs majorly in this industry are very low. This explanation is supported in APPENDIX 2: Five forces of competition. Although the environment is very competitive it is very difficult to enter because of the need of capital, the regulation faced by the government, and especially because of the customers loyalty towards other restaurants.
The new trend that has being evolving during the years has also created areas of distress among competition. Nowadays customers want to change fast-food restaurants to a healthier one. That increases costs, because companies will have to change their operation and ingredients in order to satisfy their customers; nevertheless there is a good side, McDonalds will reach another market that wasn’t reached before.
Internal Analysis
Once of the major problems faced by McDonalds and can clearly be seen in APPENDIX 3: Internal Analysis McDonalds Value Chain, is the lack of recruiters and led to a dramatic falloff in the skills of it employees. As we can see on APPENDIX 4: Competitive Advantage Building Blocks, McDonalds is very efficient. They have a
To: Professor Kopka
From: Veronica Salas
Subject: Strategic Analysis for McDonalds
EXTERNAL AND INTERNAL ENVIRONMENTAL ANALYSIS
External Analysis
There are two conditions that are most significant in McDonald’s external environment that are: 1. The new trend in which customers are changing fast –food restaurants to healthier ones. 2. The arising competition to achieve growth in this industry.
The fast-food industry is very complex and saturated. The key success factors in APPENDIX 1 show that in order to be able to compete there is a need for research and development, achieve differentiation with your competition, create quality with your products, and be price competitive. Large capital is needed to be able to develop new products in order to differentiate among competitors. The creation of quality is very important because the switching costs majorly in this industry are very low. This explanation is supported in APPENDIX 2: Five forces of competition. Although the environment is very competitive it is very difficult to enter because of the need of capital, the regulation faced by the government, and especially because of the customers loyalty towards other restaurants.
The new trend that has being evolving during the years has also created areas of distress among competition. Nowadays customers want to change fast-food restaurants to a healthier one. That increases costs, because companies will have to change their operation and ingredients in order to satisfy their customers; nevertheless there is a good side, McDonalds will reach another market that wasn’t reached before.
Internal Analysis
Once of the major problems faced by McDonalds and can clearly be seen in APPENDIX 3: Internal Analysis McDonalds Value Chain, is the lack of recruiters and led to a dramatic falloff in the skills of it employees. As we can see on APPENDIX 4: Competitive Advantage Building Blocks, McDonalds is very efficient. They have a