Unit #3:Day 2

Opening Activity

• Pull out your homework from last class

• Write one of your key challenges or opportunities on the board in the respective column

• Turn in your homework into the folder

Unit #3:Day 2

Opening Activity: Did You Know?

Break down of sales at a typical restaurant in Garner, N.C.

1. Breakfast: 5 AM to 11 AM– 30% of the day’s sales– The McGriddle, a pork patty between two pancakes, is

McDonald’s biggest hit in a generation

2. Lunch: 11 AM to 2 PM– 24% of the day’s sales– The most popular noontime sandwich is the Dollar Menu’s

double cheeseburger

Unit #3:Day 2

Opening Activity: Did You Know?3. Afternoon: 2 PM to 5 PM

– 15% of the day’s sales– U.S. chicken product sales, including the new Snack

Wrap, total $4.5 billion, up from $2 billion in 2002

4. Dinner: 5 PM to 8 PM– 15% of the day’s sales– With fewer families eating dinner at home, McDonald’s

sells more beef, chicken, salad greens, and apples than any other food company

5. Late Night/Early Morning: 8 PM to 5 AM– 16% of the day’s sales– Nearly two-thirds of its business in the U.S. is done at

drive-through windows

Unit #3:Day 2

1. What is a SWOT analysis?

2. What are some challenges & opportunities for McDonald’s?

Today’s Questions?

30

24

15 15 16

0

5

10

15

20

25

30

% 0f Daily Sales

BreakfastLunchAfternoonDinnerLate Night

Unit #3:Day 2

• Based on your homework assignment you have identified a lot of challenges but also numerous opportunities for McDonald’s

• The question is, how does McDonald’s uncover this untapped potential when faced with the daily challenges of running a $22 billion business?

Identify Opportunities

Unit #3:Day 2

• Research– What looking for?

• Existing competition

• Is there demand for the product

• Necessary investment– New equipment, suppliers or training required?

• Potential sales and profits

– Sources of information• Consumer observations, focus groups and surveys

• Government publications & data– www.zipskinny.com

• Perform analysis– SWOT

Identify Opportunities

Unit #3:Day 2

SWOT Analysis

Our mission is to be the world's premier consumer products company focused on

convenience foods and beverages.  We seek to produce healthy financial rewards to

investors as we provide opportunities for growth and enrichment to our employees, our

business partners and the communities in which we operate.  And in everything we do, we strive for honesty, fairness and integrity.

Unit #3:Day 2

SWOT Analysis

How can Pepsi achieve this mission of growth?– New products

– New distribution outlets/increase sales

– Acquisitions• Pepsi did this acquiring Quaker Oats in 2000 for

$14 billion

• By purchasing Quaker Oats, Pepsi got Gatorade but also oatmeal, cereal, etc.

– Let’s prepare a SWOT analysis Pepsi might have done in evaluating this acquisition

Unit #3:Day 2

SWOT Analysis

Strengths Weaknesses

ThreatsOpportunities

Unit #3:Day 2

SWOT Analysis

Strengths

• Gatorade #1 sports drink

• Increased revenue

• Get to be instant market leader

Weaknesses

• Get products don’t need/want

• Expensive

Threats

• Coke’s reaction

• Sponsorship conflicts

• FTC may block

Opportunities

• Can piggy back on Pepsi’s existing distribution channels

Unit #3:Day 2

SWOT Analysis on McD’s Decision To Stay Open Late

Strengths Weaknesses

ThreatsOpportunities

Unit #3:Day 2

McDonald’s Analysis Activity • Going to put the class into 5 teams• With your McDonald’s team, I would like you to do the

following:– Come up with a name based on a McDonald’s product– Assign everyone a number (1 through 4 or 5) depending on the

number of individuals in your group

• Pick up your assigned article based on your number1. “Mickey D’s McMakeover” or “How McDonald’s turned it around”2. “Shrimp Burgers to the Rescue”3. “Hooked on McDonald’s at Age 3”4. “McDonald’s tries to keep workers from flipping jobs”5. “Specialty coffee a tall order for McDonald’s”

Please do not write on the articles as I will need them back!

Unit #3:Day 2

McDonald’s Analysis Activity • Article reading

– Read your article & write down a summary & key points in the last column of your note sheet

• Meeting of the minds– Get together with other individuals that had your article &

discuss your analysis of it– Articles were:

1. “Mickey D’s McMakeover” or “How McDonald’s turned it around”2. “Shrimp Burgers to the Rescue”3. “Hooked on McDonald’s at Age 3”4. “McDonald’s tries to keep workers from flipping jobs”5. “Specialty coffee a tall order for McDonald’s”

• Regroup with your team

Unit #3:Day 2

McDonald’s Analysis Activity • Regroup with your team

– Share with your teammates your articles & key information learned– As a group, rank the following 5 challenges in terms of which your

group thinks is the biggest challenge currently facing McDonald’s today (1 being the greatest challenge and 5 being the least significant one)

a. Domestic Business Operations/Franchises • E.g., How the stores are run, layout, service, franchisee relationship, etc.

b. Product Offering/Innovation• E.g., Menu items available & new food items, etc.

c. Social Responsibility• E.g., Concerns over obesity, paying fair wages, promoting diversity, etc.

d. International Expansion & Operations• E.g., Pressure to grow, challenges presented by operating restaurants abroad

e. Marketing• E.g., Challenges to break through the clutter, stay relevant, and new campaigns, etc.

– Write your rankings on your card

Unit #3:Day 2

McDonald’s Analysis Activity • Assign Challenges

a. Domestic Business Operations/Franchises • E.g., How the stores are run, layout, service, franchisee relationship, etc.

b. Product Offering/Innovation• E.g., Menu items available & new food items, etc.

c. Social Responsibility• E.g., Concerns over obesity, paying fair wages, promoting diversity, etc.

d. International Expansion & Operations• E.g., Pressure to grow, challenges presented by operating restaurants abroad

e. Marketing• E.g., Challenges to break through the clutter, stay relevant, & new campaigns

• Your group’s task for next class:– 3 – 6 slide PowerPoint Presentation on your challenge– 3 slides must include:

1. SWOT analysis on your challenge2. Information about McDonald’s efforts addressing this challenge3. Identification of a firm in a different industry that faces the similar challenge & how

they are addressing it

Unit #3:Day 2

Homework • Going to computer lab for remainder of class

– Work with group on deliverables

– Be creative, look for articles about your challenge and incorporate pictures

– Copy & paste your presentation into my To Teach folder as well as upload it to Moodle

• Next class we will discuss these challenges further and talk about how other firms in similar situations have faced them

– Will also begin our discussion on Nike

Unit #3:Day 2

Today’s Question Wrap-Up 1. What is a SWOT analysis?

– Strengths

– Weaknesses

– Opportunities

– Threats

2. What are some challenges & opportunities for McDonald’s?

– We will find out more next time!!!