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Mc Donalds A Financial And Stategic Case Study

5497 words - 22 pages

1.0 SummaryThis report has been produced in conjunction with the Case study: McDonalds - A Company Brief, for the purpose of the Strategic Management assessment.2.0 IntroductionMcDonalds is currently the third most recognized brand in Britain and associated with fast food terminology, although in recent times, has moved into different menu choices.This analysis of the case study will highlight the differentiation and marketing strategy adopted by McDonalds and recommend ways in which to progress. Furthermore, an analysis of the company's financial, corporate and organisational strategic plans has been achieved to ascertain the attractiveness of the brand to investors, employees and interest parties.3.0 Findings3.1 Financial AnalysisThe comparison of ratios, either within the firm over time, or against external benchmarks, can be useful for further investigation to a manager and the outside analyst. However, when analysing the ratios, factors such as industry trends, changes within the firm, consumer tastes, technological changes and economic factors cannot be ignored, (Atrill & McLaney, 2003). For the purpose of this report, consumer trends and the economy are the most important factors. Although natural disasters, acts of terrorism, political stability of the country and trading seasons have hit the restaurant fast food service industry, food retail sales are still increasing by 0.3 per cent, year on year, (People1st, 2005).To gain a more rounded view of the company, Ashton & Hopper, 1991, states that other types of information that should be disclosed are details of other financial statement amounts such as detailed explanations of long-term debt. Other disclosures such as any possible accounting principle change, business mergers, acquisitions and dispositions, organisational structure, comments on organisational culture, recent corporate paradigm shifts, competitor analysis and market trends must be included.Finally, it must be noted that all financial ratios and published accounts are not the same. According to author, year, they can be manipulated to show the exact information that is required by directors and executives to enhance confidence within the markets.3.1.1 Management & Operational EfficiencyIn 2003, the asset turnover for this period was 1.56, compared with 1.63 in 2002. It can be argued that the higher the turnover, the better use of your assets. However, as highlighted earlier, McDonalds restaurants UK purposely strays away from being an asset rich company with franchises taking most of the risk in freehold leases of premises, ( 2006). Nonetheless, industry standard shows an average of 0.96:1 in 2003, (People1st, 2005); suggesting that the assets such as land plots, property and associated brand logos are used effectively. A cautionary note should be made, as this ratio is dependant on many market variables and this ratio may not necessarily be a true reflection of management efficiency, rather a...

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