Environmental Analysis of an Organization

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McDonald's is the world best known brand name in the fast food industry with over 30,000 stores worldwide. Opened by brothers Dick and Maurice McDonald in 1937, the restaurant has been successful since the start. From a production line of most common food to concentration on burgers, the franchising system of McDonald's works its magic in expanding domestically and internationally. Having a stable partnership with Wal-mart and Disney and a large franchising network, and an improving business strategy, McDonald's works its way to build a sustainable competitive advantage in order to stay on the top of global fast-food industry.

In achieving low-cost strategy, McDonald's, the leader of fast food industry, uses diversification strategy in its international business, a franchising system that earns the most profit, and a Plan to Win strategy to improve the company's overall performance.
McDonald's starts out with a franchising system, which continues to play a significant role in its business that made up 60 percent or more of McDonald's total sales. After collecting franchising fees, McDonald's continues to receive monthly service fee and property rent as ways to increase its income. Then realizing the value of real estate, McDonald's implements its strategy and raises its income by marketing excess land, property and buildings.
In order to compete with other international fast food restaurants, McDonald's tries to differentiate its products and services corresponding with foreign customers' tastes and needs while continuing expanding in international market. McDonald's introduced the McChicken Premirere in the United Kingdom, France, Italy, and Belgium, and a premium sandwich, Le 280, in France. In Jerusalem, McDonald's did not serve dairy products and it closed on the Jewish Sabbath day. Knowing that the trend of widening international market is growing, by the year of 2002, McDonald's has 16,534 foreign outlets which are five times more than Burger King, the second largest hamburger fast food chain has.
Thus McDonald's has become emblematic of globalization, sometimes referred as The Mcdonaldization of society. The Economist magazine uses the "Big Mac index" (the price of a Big Mac) as an informal measure of purchasing power parity among world currencies
http://en.wikipedia.org/wiki/McDonalds#Emblem_for_globalization

Mission

To leverage the unique talents, strengths and assets of our diversity in order to be the World's best quick service restaurant experience.

Values of McDonalds
"At McDonald's, we are committed to listening to our customers and to being open and direct about the facts surrounding our people, our food, and our restaurants"

(Corporate website of Mcdonalds)

Environmental analysis

Whole strategic planning process starts from extensive scanning of external and internal environment of an organization to understand the relative positioning of the firm in the business environment or industry it operates in and to identify the relative strengths and weaknesses of the organization. Companies should constantly make changes in the way they manage their firm to keep up with the competition and to satisfy the consumers. For example, Ford, Chrysler and GM must always change their business tactics and strategies to lure customers and to stop the Japanese competition from taking away their customers. As experienced in the summer of 2005, the American competitors changed their strategy by offering employee discounts. Sales however, did increase but consumers were still lured to the Japanese imports. Thus, they needed to improve their strategy and adapt to the ever changing needs of the market.

There is no doubt that strategies evolve because of the unexpected responses such as customers' expectations, new technologies, popular commodities, the change in the environment and pop culture. Thus a company's strategy must be combined with a proactive strategy and reactive strategy

IF we closely analyze this statement, the patterns of an organization's actions will be clearly reflected not only in the financial performance of an organization over the years but in the relative strengths, weaknesses and strategic positioning of the firm in the business environment, industry or economy it operates in. The understanding of these elements is the prima facie requirement in the strategic planning and management process and is closely ...