Under Armour External Analyisis Essay
General External Environment Opportunities: McDonalds “Plan to Win” is driving results and has played a primary role in the company’s strategic direction. Now, the strategic direction is “to be better, not just bigger. ” CEO Skinner stated, “ our customers centric plan to win continues to dive sustained momentum and is generating broad based growth in our business. Our performance confirms that our emphasis is on improving the McDonalds restaurant experience on the 5 P’s of people, product, place, price, and promotion is the right strategy for our customers and McDonalds.
One of our two separate but equally important goals is to stay sharply focused on the here and now and to run day to day operations with maximum efficiency and productivity. The other is to ensure that the right people and processes are concentrating on the future and developing new innovations that can sustain profitable growth over the long haul. ” McDonalds is developing many new innovative niches that could provide multiple opportunities for them in the coming years.
These niches include; Economic Opportunities: Home meal delivery: McDonald’s could exploit an opportunity of delivering food to home and increase its reach to customers. * Full adaptation of its new practices: McDonald’s has redesigned its logo and restaurant design in 2006. In addition, it has introduced some new practices. As a result, remodeled restaurants have seen 8-9% higher than average market growth. McDonald’s should finish remodeling all of the restaurants and adapt the best practices in them as soon as possible Demographic Opportunities: * Changing customer habits and new customer groups: Changing customer habits represent new needs that must be met by businesses.
So far, McDonald’s has been successful in introducing its McCafe, McExpress and McStop restaurants to meet the changing customer habits and the needs of previously untapped customer groups. Sociocultural Oppurtunities: * Increasing demand for healthier food. While demand for healthier food increases, McDonald’s could introduce more healthy food choices in its menu and reverse its weakness into strength. McDonald’s is trying to seize such an opportunity and soon plans to open only vegetarian restaurant in India. THREATS * Even with all these opportunities McDonalds still faces a number of threats that could stall their continued development
Economic Threats: * Saturated fast food markets in the developed economies: The fast food market in the developed countries is already overcrowded by so many fast food restaurant chains and this already proves to be a threat to McDonald’s as it barely grew through 2012. * Currency fluctuations. McDonald’s receives a part of its income from foreign operations. The profits that are sent back to US have to be converted into dollars and may be affected by the exchange rates, especially when the dollar is appreciating against other currencies.
In 2012, McDonald’s profit was largely affected by appreciating dollar. Demographic Threats: * Local fast food restaurant chains. Local fast food restaurants can often offer a more local approach to serving food and menu that exactly represents local tastes. Although McDonald’s does a great job in adapting its own menu to local tastes, the rising number of local fast food chains and their lower meal prices is a threat to McDonald’s. Sociocultural Threats * Lawsuits against McDonald’s. McDonald’s has already been sued for many times and lost quite a few lawsuits.
Lawsuits are expensive as they require time and money. And as McDonald’s continues to operate more or less the same way, there is high probability for more expensive lawsuits to come. * Trend towards healthy eating. Due to government and various organizations attempts to fight obesity, people are becoming more conscious of eating healthy food rather than what McDonald’s has to offer in its menu. Newer franchises like Chipotle and PF Chang are beginning to trend with the concept of “fast casual dining. ” They are offering a higher quality product with relatively low prices, ranging between 7- 14 dollars.