CAPM of Pepsi Co.

ASSURANCE OF LEARNING EXERCISE 3D: DEVELOPING A COMPETITIVE PROFILE MATRIX FOR MCDONALD’S CORPORATION

PURPOSE:

Monitoring competitors’ performance and strategies is a key aspect of an external audit. This exercise is designed to give you practice evaluating the competitive position of organizations in a given industry and assimilating that information in the form of a Competitive Profile Matrix.

INSTRUCTIONS:

1. Gather information from Assurance of Learning Exercise 1A. Also, turn back to the Cohesion Case and review the section on competitors (pages 33-35).

2. On a separate sheet of paper, prepare a Competitive Profile Matrix that includes McDonald’s, Burger King Holdings, and Yum! Brands, Inc.

3. Turn in your Competitive Profile Matrix for a class work grade.

TEACHING NOTES:

Answers to this question will vary depending on the factors chosen and the competitors analyzed.

The following is what a typical answer might look like.

· List critical success factors identified in the internal and external analysis.

· Assign to each factor a weight from .0 (not important) to 1.0 (very important). These weights show the relative importance. The total of all the weights should equal 1.0.

· Assign a 1-4 rating to each factor to describe the factor: 1= major weakness, 2 = minor weakness, 3 = minor strength, and 4 = major strength.

· Multiply each factor’s weight by its rating to get a weighted score.

· Sum the weighted scores for each variable to determine the total weighted score for the organization.

· Do the same for one or more competing organizations using the same critical success factors and weights.

		McDonald's	YUM! Brands	Burger King
Critical Success Factors	Weight	Rating	Score	Rating	Score	Rating	Score
Global Presence	0.13	4	0.52	3	0.39	2	0.26
Market Share	0.07	4	0.28	3	0.21	3	0.14
Product Quality	0.09	3	0.27	2	0.18	4	0.36
Customer Satisfaction	0.08	2	0.16	3	0.24	4	0.32
Financial Stability	0.14	4	0.56	2	0.28	3	0.42
Technology	0.08	4	0.32	3	0.24	3	0.16
Product Development	0.05	4	0.20	3	0.15	2	0.10
Brand Awareness	0.16	4	0.64	3	0.48	3	0.32
Price Competitiveness	0.13	4	0.52	3	0.39	3	0.26
Diversification	0.07	3	0.21	4	0.28	3	0.14
TOTALS:	1.00		3.68		2.84		2.48

Source: Dale Wiersema. 2009. McDonald’s Corporation Strategic Management Plan.