McDonald’s Report: Analysis of the internal and external business environment and the role of IT

McDonald’s Report: Analysis of the internal and external business environment and the role of IT


Analysis of McDonald’s competitive environment using Porter’s force analysis

Create a report on a selected company, analyze the company’s internal and external business environment, and assess the role of information technology (IT) in achieving the company’s competitive advantage. A management information system (MIS) is a computer-based system that consists of hardware and software and serves as the backbone for subsequent organizational processes (Fountas et al. 2015)。 This particular system collects the following data from multiple online systems, analyzes the information, and further reports relevant data to support the management decision-making process. It helps you better coordinate, analyze, visualize, and control your information. The next goal of this management information system is to increase the profits and value of the company. Several different popular organizations have implemented this type of IT to gain maximum competitive advantage and one of these important organizations is McDonald’s Corporation (McDonald’s. 2020). It is a major American fast food organization founded in 1940 as a restaurant by Richard and Maurice McDonald.

The organization’s headquarters are located in Chicago, Illinois, USA, and currently has over 38,000 restaurants worldwide. The founders changed the name of their respective companies to Stand of Hamburgers'' and turned them into their own franchisees with theGolden Arches” logo, which was established in 1953 at a store in Arizona (McDonald’s). , 2020). In 1955, Ray Klock, one of the most famous businessmen, joined McDonald’s as his franchise agent and subsequently bought the chain from this brother. Currently, the organization is the largest restaurant chain by revenue, serving more than 69 million customers in 100 countries around the world. The organization’s main products include burgers, chicken, milkshakes, fries, salads, soft drinks, breakfast items, wraps, coffee, and desserts. The total number of employees employed by McDonald’s is approximately 210,000, and they ensure maximum competitive advantage for the company without complexity. The organization is best known for its burgers, fries, and cheeseburgers, but it also offers chicken products and desserts (McDonald’s. 2020). After considering customer feedback, we have also added salads, fruit, smoothies and fish to our respective menus. The organization’s primary income comes from royalties, fees, and rent paid by franchisees, as well as sales within the organization’s restaurants.


McDonald’s has approximately 1.7 million employees and is considered the second-largest private employer after Walmart, according to two separate published reports. One of the most important and important strategies of this organization is to use cutting-edge technology in the business to ensure maximum effectiveness and efficiency is achieved without any problems or complications. Additionally, the company has maintained its top position for several years and has adopted high-level employee satisfaction strategies (McDonald’s, 2020). McDonald’s is doing well, competing with popular fast food organizations such as KFC, Starbucks, and Burger King. This report details the competitive landscape of McDonald’s, including the following details:

Environmental analysis can be described as a strategic tool and is a procedure for identifying all internal and external factors that can affect an organization’s performance. This type of analysis may include a subsequent assessment of the level of opportunities or threats represented by various factors (Laudon and Laudon 2015). Such evaluations should be introduced into the decision-making process and also help adapt the strategy to the company’s environment. The environment drives the business, and each situational factor helps determine the periodic conditions that affect the business. Therefore, these companies need to continuously analyze both the trading environment and the market (Shiau, Chen, and Tsai 2015). There are several strategic analysis tools that can provide insight into an organization’s environment. Identification of all possible opportunities and risks keeps business activities up to date and gives companies a competitive advantage. The organization of McDonald’s Corporation needs to consider the external and internal environment so that maximum effectiveness can be achieved without too much complexity. To achieve high success, various factors are considered to understand the current position of the organization in the existing market (Mathooko and Ogutu 2015). A proper analysis of this competitive environment of McDonald’s organization with Porter’s five forces is provided in the next section.

Competitive rivalries: The first and most important element of Porter’s Five Forces analysis of the McDonald’s Corporation organization is competitive rivalries. This particular force is strong because this organization is one of the most competitive enterprises in the current situation (Kanakulya and Jinzhao 2017). Several local and international restaurants around the world offer the same menu. This intense competition will only intensify over time as all players in the industry strive for market share. A certain level of saturation also occurs within organizations. This organization of McDonald’s Corporation around the world has several competitors such as Burger King, KFC, Johnny Rockets, Starbucks, and several others. All players invest in marketing at some point to be able to develop major innovations and open new franchises, with the main purpose of increasing subsequent access to new potential customers. This increase in the total number of participants has significantly increased the level of competition for McDonald’s.

Threat of new market entrants

Threat of new entrants: The second most important and critical element of Porter’s Five Forces analysis for McDonald’s organization is the threat of new entrants (Koc and Bozdag 2017). This particular force is weak internationally because McDonald’s has several different entry barriers. To be a successful competitor of this organization, this particular market participant will need to open more branches around the world, which will require huge amounts of capital and time. In addition, each organization invests time to quickly achieve economies of scale and increase profits, and to facilitate subsequent marketing implementation and creating awareness within the organization. You also need to have access to the respective suppliers of raw materials. customer. This makes it very difficult for new entrants to enter companies like McDonald’s and provide strong competition. However, similar threats are much higher at the local level, where investments are not high, only two or three stores are enough, and economies of scale are well realized (Kehoe and Mateer 2015). This pressure is moderate for McDonald’s as local branches can also bring competition.

Bargaining Power of Suppliers: Porter’s third distinct and notable force of McDonald’s organization in his five forces analysis is the bargaining power of suppliers. Various raw materials such as potatoes and chicken that are regularly used by organizations are available through more suppliers, and the various orders from organizations are always huge (Simatupang, Piboonrungroj, and Williams 2017). Since there are several suppliers in the local area, there is no opportunity to discuss with the company or even try to force them to increase their respective prices. Additionally, you can easily and quickly switch suppliers while keeping switching costs low. Therefore, this aspect is weak for the organization.

Bargaining Power of Buyers: Another clear and important force of Porter’s Five Forces analysis for McDonald’s organization is the bargaining power of buyers. This special force is powerful for the organization. Different McDonald’s buyers have multiple follow-on options available on the market, which could put them in a bargaining position. Shoppers can easily switch from one restaurant to another without switching costs if they are not satisfied (Prajogo, Oke, and Olhager 2016). Customer loyalty to such fast food companies regularly declines when there are several competitors. In addition, buyers may protest against price increases, which can cause disruption to company operations and customer loyalty.

Supplier bargaining power

Threat of Substitution: The final force is the threat of substitution. There are several alternatives to McDonald’s, such as KFC and Domino’s Pizza. The baked goods are also considered an alternative to McDonald’s products. Therefore, the company may face intense competition while retaining customers. Most of these substitutes are highly competitive in terms of consumer satisfaction and quality, and there are no associated switching costs when switching to a substitute (Indris and Primiana 2015). Several health concerns have also been raised against various products of such organizations and customers are complaining about their products as they do not consider the maximum health benefits under any circumstances. may say. As a result, it is thought that McDonald’s influence over the organization became stronger.

To ensure maximum effectiveness and efficiency without adding too much complexity, technology must be integrated into your business. Organizations can reap the most significant and significant benefits by successfully implementing technology in their respective businesses. Various business applications include various databases such as SQL Server, transactional systems such as real-time order entry, email servers such as Exchange, and more. After analyzing inbound and outbound logistics, organizations can incorporate various technologies (Shtal et al. 2018). Below is a proper analysis of Porter’s value chain in McDonald’s. McDonald’s main activities in this value chain include the production and sale of each product directly to its target customers. A proper analysis of key value chain activities could improve McDonald’s performance. Below you will find the following information:

Inbound logistics: Strengthening relationships with suppliers is critical, as receiving, storing, and delivering products requires their support (Ansah and Sorooshian 2017). Without proper analysis of these inbound logistics, you may also face multiple experiments during the product development stage. It also highlights all the functions that convert various raw materials into finished products. Key examples of this inbound logistics include sourcing raw materials, storing raw materials, and ultimately distributing raw materials to begin production. Operations: Once the raw materials are available and McDonald’s operations are ready to process the raw materials into several final products and launch them into the market, the overall importance of analyzing these operational activities increases . The most important examples of these operational activities include processing, inspection, collection, and packaging. Proper maintenance and repair of equipment also falls into this category (Kraja and Osmani 2015). This includes both service and manufacturing operations. This maximizes efficiency and increases productivity. It also achieves solid economic development and relies on competitive advantages.

Threaten a substitute

Outbound Logistics: This logistics includes various activities that deliver products to customers through various intermediaries. Several different activities include warehousing, order processing, shipping, material handling, and scheduling (Hueske and Guenther 2015). You can also analyze and optimize logistics to identify competitive advantages to better realize your company’s growth goals.

His two pertinent and important support activities within the Porters value chain of McDonald’s Corporation are:

Corporate Infrastructure: The first and most important supporting activity within Porter’s value chain for McDonald’s Corporation is corporate infrastructure. Ultimately, it refers to various activities such as quality control, legal processing, accounting and planning, and even strategic management (Zinovieva et al. 2016). The most efficient infrastructure management enables organizations to optimize overall value across the value chain. The McDonald’s Corporation organization can also manage related infrastructure activities with the main purpose of enhancing its competitiveness in the market. This enables businesses to achieve maximum effectiveness and efficiency without complexity.

Technology Development: His second most important and important support activity within Porter’s value chain for McDonald’s Corporation is technology development. Several different activities of technology are highly dependent on subsequent technical support (Bartusková and Kresta 2015). For such technology integration in production, marketing, human resources, and sales, organizations need to realize the importance of overall technology development. Ultimately, they may be divided into process development activities and product technology development activities. Specific technology development activities at McDonald’s include software automation, product design research, data analysis, and technology-enabled customer service. Each R&D department falls into a specific organizational technology development category for McDonald’s (Gilbert 2015). You can also incorporate its superior effectiveness and efficiency into your procurement activities. Value-added activities are the key activities that ultimately create value for different customers, and are categorized into three different key activities, including the step of converting the item towards completion, the step of completion after the first time, and finally the customer support. perform the steps. that at some point the first step is taken (Zheng and Manoharan 2015). Key value-added activities include work that the customer is willing to pay for, the physical transformation of the product, and finally the work in such a way that it is completed in the first place. After incorporating various important value-adding activities, McDonald’s organization will be able to deal with different types of problems and complexities. These activities ensure that companies gain a competitive advantage or advantage, such as:

Buyer’s bargaining power

The first and most important value-adding activity for the McDonald’s organization would be to successfully eliminate waste. To ensure maximum hygiene of food particles and maintain a high level of satisfaction for all customers, waste must be removed from the product. This can be achieved after implementing various advanced technologies. Moreover, the respective complexities will also be resolved (Bae 2017). Significantly reducing waiting times and waste disposal will ensure the success of your business under any circumstances. Moreover, defects are successfully avoided and at the same time staff are well trained and motivated. It also simplifies the process and ensures a high success rate. Another important and significant value-adding activity for McDonald’s organization is the implementation of Lean methodology within the company. It is beneficial for businesses to achieve good performance and enable organizations to follow all kinds of success criteria and ensure high levels of customer satisfaction.

Conclusion and recommendations

Therefore, we can conclude that IT is the critical use of various systems for the core purpose of storing, retrieving, and manipulating sensitive information and data. This type of technology includes all kinds of peripherals, software, and hardware and is operated by a limited number of users. This means that each organization can deal with a wide range of problems and tough situations efficiently and quickly. This commercial use of information technology can easily include telephone technology and computer technology. Information technology includes various layers of physical equipment such as hardware, operating systems, software applications, and virtualization.

Several different applications may execute programmed instructions to manipulate, integrate, distribute, and even influence dates for the following business purposes: Computer servers are responsible for running business applications, and various servers are connected not only to clients, but also to all other servers in other business networks. These technologies are also responsible for delivering maximum benefits to businesses and mitigating problems at a high level. McDonald’s is one of the most important fast food chain companies in the world. They enjoy the most important and significant competitive advantage within the company. Therefore, they have focused on innovation and new creativity in business processes.

Evaluating the role of information technology at McDonald’s

After analyzing organizations with Porter’s Value Chain and Porter’s Five Forces, we found that we need to innovate products at lower costs to improve customer loyalty and maintain our market position. Ta. Using information technology, they have gained the ability to detect various changes in the world market earlier than usual. McDonald’s worked more effectively and efficiently to maximize productivity, thereby achieving rapid communication and subsequent high levels of record protection. In the above report, a detailed analysis of McDonald’s competitive environment including various details such as Porter’s five forces and Porter’s value chain is well presented.

Below are some good recommendations for McDonald’s organization’s business processes that use IT to improve business processes and increase competitiveness.

Streamline processes: The first and most useful recommendation for McDonald’s organization to improve its business operations is to properly streamline its processes and activities. This simplifies tasks through specific modeling techniques and eliminates unnecessary steps, cuts, and waste, which will definitely increase the efficiency of your organization.

Reducing delivery time through process improvement: Another appropriate and essential recommendation for McDonald’s organization to improve its competitiveness is to reduce delivery time appropriately through process improvement. Faster delivery times make it easier for companies to automate business processes and modernize customer relationship systems. This will solve existing problems related to your business.


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