Mcdonald Essay

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SM case discussion notes Case Fourteen McDonald’s McDonald’s Discussion Questions 1. What situation did Skinner inherit when he became CEO? What are the current forces in the external environment that affect Skinner’s ongoing strategy? 2. What source of competitive advantage does McDonald’s have, and is that position supported by its value chain and other internal resources? 14-2 McDonald’s Discussion Question 3. What other strategies did McDonald’s formulate to achieve a competitive advantage? What steps did Skinner take to fix the problems that McDonalds faced? 14-3 McDonald’s Q1. External Environment, cont. Forces in McDonald’s General Environment: • Demographic - customers now working around the clock, expecting 24 hour access to fast food, how to please range of customers from kids to contractors? • Sociocultural - customers preferences have changed to more exotic foods, healthier food with better taste • Economic - current economic downturn means customers might be trading down to McDonald’s if they want to eat out • Global - boundaries are disappearing, travelers more open to global consistency in food offerings - Golden Arches are accepted, and expected, everywhere 14-4 McDonald’s Q1. External Environment, cont. Suggested: High - Many rivals compete in the fast food business. Convincing customers that menu items are different or better than competitors is difficult when the food category is limited to take-out options. Substitutes Threat Med-High Suggested: Med-High – Major substitute is home cooking - it’s easy to make a burger on the home grill. Suppliers’ Power Low Suggested: Low - Suppliers of beef, eggs, potatoes have little power. Soft drink suppliers beg for partnership deals with restaurants. Suggested: Med-Low threat of new entrants - establishing a restaurant chain requires significant financial and

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