The table below represents the SWOT analysis for the entire McDonald´s Corporation. Each category outlines the major factors that build on the analysis and reflects the suggestions on the future actions and strategic goals for the company.
Exercise 6B – SPACE Matrix
Components of the analysis
The SPACE Matrix below reflects the position of the company in terms of external and internal factors that are outlined in the table above. Based on the ranking and the analysis completed for the McDonald´s Corporation, the company should pursue ‘competitive’ strategy that will ensure average risk and high responsiveness in current and forecasted economic environment.
McDonald´s is a large multinational company with relatively low product range and high volume of sales. Geographical spread of the business and the scope of operation make the company choose asset-high strategy and, thus, very high fixed cost and pressure on the capital liquidity. At the same time extremely high brand recognition and quality of the product contribute towards development of customer loyalty and strong supplier relationships with high switching costs for the partners (Harris, 2009). This leverage the risks associated with the competitive market environment, but do not address the threats of governmental regulations and changing customer trends. The suggested ‘competitive strategy’ should be looking at the long-term flexibilization of the product that will include further diversification to healthy fast-food brand and expansion of McCafé type activities globally. Short-term operational strategy should benefit the company from delivery and online sales that can create additional revenue at very low cost. Immediate focus of the long-term strategy should be on creation of competitive advantage through product differentiation to address changing customer trends with more flexibility and responsiveness (Johnson, Scholes and Wittington, 2011).
Harris P.S. (2009). None of Us is as Good as All of Us. How McDonald´s Prospers by Embracing Inclusion and Diversity. Hoboken, NJ: John Willey & Sons.
Johnson G, Scholes K and Wittington R (2011). Exploring Strategy. 9th Edition. London: Prentice Hall.
Sadler Ph (2003). Strategic Management. 2nd Edition. London: Kogan Page Limited.