hosp2
wzy19961214
HOSP4060AssignmentSituationalAnalysis.xlsxPESTEL
| PESTEL Analysis: McDonalds |
| Political Factors |
| Increasing international trade agreements |
| Governmental guidelines for diet and health. |
| Governments have evolving public health policies. |
| Economic Factors |
| Slow but stable growth of developed countries |
| Slowdown of the Chinese economy |
| Rapid growth of developing countries |
| Social / Socio-culture Factors |
| Rising disposable incomes |
| Busy lifestyles in urban environments |
| Increasing cultural diversity |
| Healthy lifestyle trend |
| Technological Factors |
| Moderate R&D activity in the industry |
| Increasing business automation |
| Increasing sales through mobile devices |
| Ecological/Environmental Factors |
| Rising interest for corporate environmental programs |
| Increasing emphasis on sustainable business strategies |
| Changes in climate conditions in some regions |
| Legal Factors |
| Increasing health regulations in workplaces and schools (threat) |
| Increasing animal welfare regulations (threat & opportunity) |
| Rising legal minimum wages (threat) |
Five Forces
| Five Forces Analysis: McDonalds | |
| Potential Entry of New Competitors | Rating: Moderate |
| The low switching costs allow consumers to easily move from McDonald’s toward new fast food restaurant companies. | |
| Also, variable capital costs of establishing a new restaurant empowers new businesses to enter the global fast food restaurant industry. For example, small restaurant businesses involve low capital costs compared to major corporations in the market. | |
| Many small and medium businesses lack the resources to create a strong brand to match the McDonald’s brand. | |
| Potential Development of Substitute Products | Rating: Strong |
| There are many substitutes to McDonald’s products, such as products from artisanal food producers and local bakeries. Also, consumers can cook their food at home. | |
| It is easy to shift from McDonald’s to substitutes because of the low switching costs. For example, shifting from the company to substitutes typically involves insignificant or minimal disadvantages, such as slightly higher costs per meal in some cases, or additional time consumption for food preparation. Moreover, substitutes are competitive in terms of quality and customer satisfaction (high performance-to-cost ratio). | |
| Bargaining Power of Consumers | Rating: Strong |
| The ease of changing from one restaurant to another (low switching costs) enables consumers to easily impose their demands on McDonald’s. | |
| Because of market saturation, consumers can choose from many fast-food restaurants other than McDonald’s. | |
| The availability of substitutes is relevant in this external analysis. For example, substitutes include food kiosks and outlets, and artisanal bakeries, as well as microwave meals and foods that one could cook at home. | |
| Bargaining Power of Suppliers | Rating: Weak |
| The large population of suppliers weakens the effect of individual suppliers on McDonald’s Corporation. This weakness is partly based on the lack of strong regional and global alliances among suppliers. In relation, most of McDonald’s suppliers are not vertically integrated. This means that they do not control the distribution network that transports their products to firms like McDonald’s | |
| The relative abundance of materials like flour and meat reduces individual suppliers’ influence on the company. | |
| Rivalry among existing competitors | Rating: Strong |
| The fast-food restaurant industry has many firms of various sizes, such as global chains like McDonald’s and local mom-and-pop fast food restaurants. | |
| Most medium and large firms aggressively market their products. | |
| Low switching costs make it easy for consumers to transfer to other restaurants, such as Wendy’s and Burger King. This external factor adds to the force of competition. | |
CPM
Financial Analysis
| 2019 Financial Statements | 2019 Financial Analysis: McDonalds Inc. | ||||||||||||||
| McDonalds Inc. | McDonalds, Inc | Use Excel formulas to compute the following 2019 ratios from Section 1: Financial Statements | |||||||||||||
| Consolidated Balance Sheets | Consolidated Statements of Income | 2019 | 2018 | Competitors 2019 | |||||||||||
| Current Ratio | 0.98 | 1.36 | 0.98 | ||||||||||||
| December 31, 2019 | December 31, 2019 | Inventory Turnover | 59.4 | 61.7 | 21.7 | ||||||||||
| 2019 | 2018 | 2019 | 2018 | Profit Margin | 28.6% | 28.2% | 30.4% | ||||||||
| Assets | Revenues | 21,076.5 | 21,025.2 | Return on Assets | 12.68% | 18.06% | 11.40% | ||||||||
| Currrent Assets | Operating Costs and Expenses | Return on Stockholders Equity | -73.4% | -94.7% | 12.3% | ||||||||||
| Cash | 898.5 | 866.0 | Cost of Goods Sold | 2,980.3 | 3,153.8 | Debt to Total Asset Ratio | 117.28% | 119.07% | 81.10% | ||||||
| Accounts Receivable | 2,224.2 | 2,441.5 | Labor | 2,704.4 | 2,937.9 | ||||||||||
| Inventories | 50.2 | 51.1 | Other Operating Expenses | 1,892.0 | 1,937.4 | Percent Changes | Revenue | Result | |||||||
| Deferred Taxes | 0.0 | 0.0 | General and Administrative Expenses | 2,229.4 | 2,200.2 | Enter 2018 Revenue | 21,025 | ||||||||
| Other Current Assets | 385.0 | 694.6 | Franchise Occupancy Expenses | 2,200.6 | 1,973.3 | Enter 2019 Revenue | 21,077 | 0.2% | |||||||
| Total Current Assets | 3,557.9 | 4,053.2 | Asset Impairment Expense | 0.0 | 0.0 | Revenue | Result | ||||||||
| Property and Equipment | 24,160.0 | 22,842.7 | Preopening Expenses | 0.0 | 0.0 | Enter 2018 Net Income | 5,924 | ||||||||
| Goodwill and Trademarks | 2,677.4 | 2,331.5 | Total Operating Costs and Expenses | 12,006.7 | 12,202.6 | Enter 2019 Net Income | 6,025 | 2% | |||||||
| Other Intangible Assets | 1,270.3 | 1,202.8 | Operating Income | 9,069.8 | 8,822.6 | ||||||||||
| Other Assets | 15,845.2 | 2,381.0 | Other Expense | ||||||||||||
| Total Asets | 47,510.8 | 32,811.2 | Interest Expense | 1,051.7 | 1,006.5 | ||||||||||
| Other | 0.0 | 0.0 | |||||||||||||
| Liabilities and Stockholder Equity | Income Before Income Tax | 0.0 | 0.0 | ||||||||||||
| Current Liabilities | Income Tax | 1,992.7 | 1,891.8 | ||||||||||||
| Accounts Payable | 988.2 | 1,207.9 | Net Income | 6,025.4 | 5,924.3 | ||||||||||
| Accrued Liabilities | 1,373.5 | 1,283.6 | |||||||||||||
| Income Taxes Payable | 579.2 | 482.0 | |||||||||||||
| Current Portion of Long Term Notes | 680.1 | 0.0 | |||||||||||||
| Total Current Liabilities | 3,621.0 | 2,973.5 | |||||||||||||
| Long Term Notes | 49,802.4 | 33,784.3 | |||||||||||||
| Deffered Taxes | 1,318.1 | 1,215.5 | |||||||||||||
| Other Liabilities | 979.6 | 1,096.3 | |||||||||||||
| Total Liabilities | 55,721.1 | 39,069.6 | |||||||||||||
| Stockholders Equity | |||||||||||||||
| Common Stock ($0.1 Par Value, | |||||||||||||||
| 60,000,000 shares authorized, | |||||||||||||||
| 21,593,823 and 25,607,573 | |||||||||||||||
| issued and outstanding, respectively) | -68,794.7 | -64,121.4 | |||||||||||||
| Additional paid-in Capital | 7,653.9 | 7,376.0 | |||||||||||||
| Deffered Stock Compensation | 0.0 | 0.0 | |||||||||||||
| Retained Earnings | 52,930.5 | 50,487.0 | |||||||||||||
| Total Stockholders Equity | -8,210.3 | -6,258.4 | |||||||||||||
| Total Liabilities and Stockholders Equity | 47,510.8 | 32,811.2 | |||||||||||||
| -16,421 |
SWOT
| SWOT Analysis: McDonalds, Inc. | |||
| Strengths | Weaknesses | ||
| Opportunities | Threats | ||
EFE
| Company Name: McDonalds | |||
| Key External Factors | Weight | Rating | Weighted Score |
| Opportunities | |||
| Threats | |||
| Total |
IFE
| Company Name: McDonalds | |||
| Key Internal Factors | Weight | Rating | Weighted Score |
| Opportunities | |||
| Threats | |||
| Total |
