Case Study

The Cohesion Case: McDonald’s Corporation, 2022

BY FRED R. DAVID

https://corporate.mcdonalds.com/

Ken Wolter/Alamy Photo

Headquartered in Chicago, Illinois, McDonald’s is the world’s largest restaurant company and the world’s second-largest employer (behind Walmart). McDonald’s trains its managers and franchisees at Hamburger University located at its Chicago headquarters. McDonald’s is the largest private operator of playgrounds in the United States and is the largest purchaser of beef, pork, potatoes, and apples.

McDonald’s operates about 40,000 restaurants in 120 countries; roughly 36,000 restaurants are franchised and only 4,000 are owned by the company. McDonald’s franchised restaurants are owned and operated by independent local business owners, whereas the company-owned restaurants are used to test new products, services, and innovations. McDonald’s company-owned restaurants are also used for training potential managers and testing various marketing, pricing, and operational ideas before rollout across the system.

Revenues and net income from franchised restaurants are not reported on McDonald’s financial statements; those numbers are reported on the independent owners’ financial statements. McDonald’s does, however, report on their financial statements rents, royalties, and fees received from franchisees for purchases of food.

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1. Step 1 - Read the McDonald’s Cohesion Case, and list what you consider to be the firm’s strengths, weaknesses, opportunities, and threats. Then, go to the corporate website at  https://corporate.mcdonalds.com/ , scroll down to the bottom of the website, and click on  Investors. Click on  View All Financial Information. Scroll down to Annual Reports. Click  Annual Reports and then click  2021 Annual Report or Form 10K. Download this pdf file to your desktop; peruse the information and add to your list of McDonald’s strengths, weaknesses, opportunities, and threats.

1. Step  - 2Go online or to your college library website and download to your desktop Standard & Poor’s  Industry Surveys PDF file for the restaurant industry. Use this information to add to your list of McDonald’s strengths, weaknesses, opportunities, and threats.

1. Step 3 - Go to the  www.finance.yahoo.com  website. Enter the stock symbol MCD. Note the wealth of information on McDonald’s that may be obtained by clicking any item along the row below the company name. Use this data to refine your lists of key external and internal factors. Each factor listed for this exercise should include a percentage, number, dollar, or ratio to reveal some quantified fact or trend. These factors provide the underlying basis for a strategic plan because a firm strives to take advantage of strengths, improve weaknesses, avoid threats, and capitalize on opportunities. Avoid vagueness in strategic planning.

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Assignment #2A Chapter 1

Submit Excel sheet here by Sunday at 11:59 pm.  You will complete the SWOT in Chapter 6, Week 3. 

Exercise 1B: Enter McDonald’s Vitals into the Strategic Planning Template

Purpose

The purpose of this exercise is to give you practice using resources at the author website ( www.strategyclub.com ), especially the Excel strategic planning template. Thousands of students annually find the author website resources to be immensely useful in preparing and delivering a strategic management case analysis.

Instructions

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1. Step 1:  Go to the  www.strategyclub.com  website. Review the following resources:

1. •Excel student template

1. •Sample case analysis in Word (.docx)

1. •Live author videos

1. •Guidelines for presenting a strategic plan or case analysis

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2. Step 2:  Download the free Excel strategic planning template. Read carefully instructions given with the template.

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3. Step 3:  Using your Exercise 1A results, enter McDonald’s strengths, weaknesses, opportunities, and threats into the Excel template.

3. Step 4:  Save this file for use in later exercises.

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Submit McDonald's Assignment 2

Submit Here. 

Set 1: Strategic Planning for McDonald’s

Exercise 2A: Develop an Improved McDonald’s Vision Statement

Purpose

As indicated in the Cohesion Case in Chapter 1, McDonald’s appears not to have a published vision statement. The purpose of this exercise is to develop an excellent proposed vision statement for McDonald’s, one that meets the 5-out-of-5 test discussed in this chapter.

Instructions

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1. Step 1Review the Cohesion Case and the McDonald’s corporate website at  https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact.html

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2. Step 2Develop a proposed vision statement for the company.

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3. Step 3Write a paragraph explaining how and why your proposed vision statement is excellent.

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4. Step 4Email your work to your professor for evaluation.

4. Step 5Recall from the Battle of Cannae discussed in Chapter 1, clear vision and mission are the basis for an excellent strategic plan and, thus, can be vital to company survival.

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Assignment 2B

Submit Here.

Exercise 2B: Develop an Improved McDonald’s Mission Statement

Purpose

As indicated in the Cohesion Case in Chapter 1, McDonald’s has a published mission (Purpose) statement. The purpose of this exercise is to evaluate McDonald’s Purpose Statement and to prepare a revised, improved statement.

Instructions

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1. Step 1: Review the Cohesion Case and the McDonald’s corporate website at  https://corporate.mcdonalds.com/corpmcd/our-purpose-and-impact.html

1. Step 2: Critique the existing McDonald’s Purpose statement by determining which of the nine desired components and which of the 10 recommended characteristics are not included.

1. Step 3: Develop a proposed Purpose Statement for the company, one that includes the necessary components and characteristics discussed in this chapter.

1. Step 4: Email your work to your professor for evaluation.

1. Step 5: Recall from the Battle of Cannae discussed in Chapter 1, clear vision and mission are the basis for an excellent strategic plan and, thus, can be vital to company survival.

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Assignment 2C

Submit Here:

Exercise 2C: Compare McDonald’s Mission Statement to a Rival Firm’s

Purpose

Burger King is considered globally to be McDonald’s major competitor. It is appropriate therefore to compare and contrast the two companies’ vision and mission statements because those documents represent the foundation or basis for developing an excellent strategic plan.

Instructions

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1. Step 1:  In a word document, prepare a  matrix. Place the nine desired mission statement components down the left column followed by the five variables recommended to be included in an effective vision statement. Across the top, let Column 1 be your proposed vision statement for McDonald’s and Column 2 be the Burger King vision statement provided. Let Column 3 represent your proposed mission statement for McDonald’s and Column 4 be the Burger King mission statement.

1. Step 2:  Critique your proposed statements with the Burger King statements provided.

1. Step 3:  Write  Included or  Not Included in each cell of your  matrix.

1. Step 4:  Write a half-page summary of your analysis.

1. Step 5:  Email your work to your professor for evaluation.

The following statements (paraphrased) for Burger King can be used for this exercise. 

· Vision statement: To be the most profitable fast-food-restaurant in the world, with great people serving the best burgers in the world.

· Mission statement: To offer the best-value, quality food, served quickly, in an attractive, clean environment.14