The Successful Business Plan: McDonald's Corporation - Example

Business continuity planning Name Institution Subject Instructor Date TABLE OF CONTENTS 1.Introduction 3 2.Business Impact Analysis of McDonalds 3 3.Methodology for monitoring dependencies 6 4.Strategies for recovering and maintaining dependencies 7 5.Appropriate constituent members for formation of crisis planning team in various conditions 9 6.Methodology for triggering the plan 10 7.Communication and embedding of the methodology into the organization 12 8.Methodology for testing the plan 13 9.Conclusion 13 10.References 14 1. Introduction Assessment of risks is significant when a business is entering into a specific field of operation. For instance, the knowledge of political and social risks that a business is likely to face is significant in getting a proper understanding of the operation conditions so that the business creates assessment methods that are efficient in controlling the risks. It would be important to know the role that the government will play in controlling the operations of a business so that a business is able to have a stable and regulated condition in which the business is conducted and fewer barriers are created for conducting the business (Abrams, 2003). The barriers may be in form of political, management and economic barriers. The role of international businesses is also considered a factor that affects the operations of regional businesses.Th e study of barriers or risks to efficient business operations is significant in communing up with ways of mitigating these risks so that the business potential is achieved (Chiocca, 2011). This paper presents an analysis of risks and dependencies that are faced by McDonalds Corporation and the strategies for monitoring the risks within the company. It also involves an approach for recovering and maintaining the risks and appropriate membership of the risks management team who will be responsible for risks monitoring process and triggering the implementation plan. The assessment is done in the areas of financial risks, operational risks, strategic risks and hazard risks. 2. Business Impact Analysis of McDonalds Impact analysis can be done by creating a balance between rewards and risks as a way of improving the status of the business. The process of taking risks is essential in ensuring returns is generated while risks are avoided through the right control measures (Dening and Milne, 2011). McDonalds is aware that risks are encounter when a new product is launched as well as when they sell their products to their customers on credit. This is because it is not a guarantee that their debtors will repay the debt. When the company ventures into international businesses, there is the need to determine the risks associated with changes in currencies and a possible political influence (Hill and Jones, 2010). McDonalds has experience a loss in corporate identity from other companies while employees at McDonalds have also been affected through the use of their personal information in corporate records of other competing companies. Governments of various nations have also contributed to barriers of operation for McDonalds by taxing the company’s outlets fraudulently. The business impact analysis of McDonalds can be done by comparing the performance of the business in its various sections and how efficient those sections are towards the attainment of business objectives of the company (Kieso, Weygandt, and Warfield, 2012). This analysis involves the study of various areas where risks can be encountered in the process of operation the business. For instance, the role of hazard risks can be studied by determining the role of employees in contribution to the success of the business. It also involves the study of the role played by properties owned by the organization in bringing success to the business. The product and services that are sold in the market are also investigated in terms of the levels of sales of the products and the amount of profitability related to the products and services (Lam, 2003). The role of external factors such as amounts of contracts are also investigated by determining whether contracts play any role in determining the level of profitability and value creation in the business. Impacts can also be measured by determining the role played by suppliers in bringing success to the company. This can be measured by the number of suppliers that provide the company with raw materials and other services such as expertise. McDonalds has also been observed to have a great impact on operational characteristic of its various sectors (Marchetti, 2005). For instance, the company has been successful in keeping the right accounting records that assists in maintenance of employee data and enhancement of data exchange within the organization. The company has also come up with internal information and communication systems that assist in understanding operation processes within the organization and communication between employees. It has also been possible to recruit the most qualified employees that are resourceful to the organization (McDonald, 2010). This has ensured that the company makes maximum use of its resources while costs of production are reduced through skilled working techniques. The company has also had a significant impact on the external environment through complying with government regulations and enhancement of the cultures of neighboring inhabitants (Needles, Powers and Crosson, 2010). It has also ensured that board is composed of people who have the entrepreneurial skills in production of the right approach. This has been useful in creating the right policies and attitude for creating successful business goals. The practice of dealing with product range explosion is also a measure of impact that has been brought by McDonalds. It has been observed that the company has been able to do well with a range of products (Peng, 2009). However, it has been observed that falling per unit sales is a threat that is being faced by the firm. Competitors have been observed to gain ground on McDonalds and it is an indication that there is a need for refreshment of the product line. This has been proposed to be done by alternating between ranges of highly promoted new items in the menu. This has been proposed to contribute to enlivening the products menu without any need to compete with competitors in prices. The slackening for every unit sales is also an indication that there has been a significant change in success factors for McDonald’s firm. In the new business environment, fast, convenient service is not considered enough for the organization. The emergence of a new significant factor is required: the need to have an efficient satisfying experience for final users of products. 3. Methodology for monitoring dependencies In order to monitor the dependencies that affect the operation of the company, the dependencies will be identified based on the functions to the organization and a strategy for monitoring them will be determined by measuring their performance and the possibility of any corrections in their implementation.Operational dependencies will be monitored by measuring the performance and competences of attributes that are significant in controlling operation. For instance, it will involve the measuring of accounting records to determine whether there are any malpractices or incompetence in managing accounting records. It will also involve monitoring of IT systems to determine whether there are any constraints in the It systems and the levels of interaction through the IT systems. The recruitment process will also be measures by determining the qualification criteria that can be used by McDonalds to ensure the most qualified employees are recruited. It will also measure the level of lack of bias in the recruitment process. Financial dependencies will be monitored by determining the research and development strategies that can be used to control the business operations such as methods that can be used to integrate the business into competitive environment. It will also involve a study of factors that affect financial performance of the business such as interest rates and exchange rates. Hazard risks will be monitored by observing the role played by employees in achieving the business goals, the functions of properties owned by the organization in achieving the intended goals of the organization and level of public access to the products and services offered by the organization. It will also involve the study of the role of contractors, natural events and suppliers in achieving the goals of the company. This will be done by determining contract procedures that are used by the company, the role of natural events on the outcome of operations of the company and the role of natural environment on products and services of the company. 4. Strategies for recovering and maintaining dependencies In order to recover the dependencies which are affected by risks, the company can come up with a strategy for managing a number of risks based on category of the risks. One of the strategies that have been proposed can involve the use of management principles that ensures the dependencies of operation of the company are maintained (Smart, 1999). For instance, the strategies of ensuring that financial dependencies are recovered will involve the use of financial approaches such as cash flow analysis, liquidity analysis and credit analysis. It will also involve the study of foreign exchange rates and interests’ rates so that the company can know where it is affected most and ensure more losses are not incurred and the business is operation at a profit (Treviñe, 2001). It will also ensure that the business is not heavily taxed and this will result into retention of high profits by the company. Strategic risk assessment will also be conducted. In this case, research and development will be done to determine the level of competition, intellectual capital, customer changes and industry changes. The purpose of research and development will be to determine the level of competition that the business is experiencing so that it can come up with means of competing favorably with competitors (United States and United States, 2007). It will also be significant in establishing customer changes so that products produced by the company are distributed to places with high demands and it will also result into monitoring of industry changes so that the company can know the most profitable product to specialize in producing. In order to recover operational dependencies of the company, factors that affect these dependencies will be controlled. For instance, this strategy will involve a recovery of accounting control measures, Information and Communication systems, recruitment processes and supply chain management. Operational strategies will then be recovered by studying the culture of customers in various locations where the company outlets are located. This will be followed by strategizing on methods that can be used to make these customers loyal to the company through advertisements and promotions. It will also involve a study of regulation measures that have been put in place by the government to control the operations of the company. Compliance measures will then be created to ensure the company is operating according to the laws of various countries. Operational dependencies will also be recovered by creation of a board of directors that is responsible for maintaining the principles of the organization and also ensuring the right policies that govern the company are created. This will be useful in recovering losses that would have been incurred as a result of implementing wrong operational strategies. 5. Appropriate constituent members for formation of crisis planning team in various conditions In order to come up with a crisis management team, the team will be composed of members who are experts in their areas of operation and will be responsible for mitigation of any challenges that prevent expansion and future success of the business. The teams will also ensure the strategies of continuity of the company are implemented with the organization. The team will also ensure that the recommendations of the study. These members will ensure that various areas where impact measures have been created are implemented and changes are observed. Internal impacts such as financial risks will have to be measured. Consequently, financial risk personnel will constitute the crisis planning team and the will be significant in obtaining the correct financial position of the business or financial risks that the business is facing. In addition, there will be strategic risks manager who will be responsible for management of risks associated with the operations of the business, they will determine the areas where weaknesses of the business are and where there is need to make changes with respect to changes in customer demands. The other member of the committee will be local residents’ representatives who may be in authority. This person will be responsible for communicating the local residents’ opinions regarding the operations of the business as well as areas where changes need to be made by the business to accomplish the needs of the society. Other member of the risks assessment committee will include IT expert’s representatives who will be able to assess the performance of IT facilities within the organization and the impacts brought by their use to the organization. The committee will also constitute supply chain representative who will ensure the supply chain system is monitored and any impacts brought by the process to the organization are monitored and changes effected. The committee will also constitute a representative of employees who will be responsible for monitoring the activities of employees and giving feedback on the process. 6. Methodology for triggering the plan There are certain actions that will be taken by McDonalds in order to ensure that both internal and external impact plans are triggered and it is successfully implemented in the organization. One of the steps that will be followed in triggering the impact plan involves maintenance of consistency of the new products by relying on test marketing of new menu items in various locations. This technique will be useful in identifying items that can be popular among consumers while ensuring the capability of the company to deliver a range of new products with consistent quality in a number of regions within a country. The company already has a theory of doing this and it will only take a few changes to its operations strategy. If there is diversity in the products line, then the function of maintaining quality is likely to be exponentially harder. The trick involves a process of eliminating a number of current menu items when new ones have been introduced, while making sure that there is proper training for the staffs with regards to execution of products successfully. The core competencies of McDonalds i.e. adherence to quality standards and continuous promotion of experimentation in a number of venues can be useful in maintaining continuity of the company’s operations. This can be achieved by diversifying in another restaurant businesses where similar concepts are franchised to assist in obtain additional income from investors. In addition, McDonalds intends to promote flexibility through operating strategy. This will involve an experimentation process where there will be the need to make a breakthrough in the avenues of growth and it is estimated that this will result into growth in profitability in areas such as the sales of Chicken Nuggets and breakfast menus. However, experimentation is considered the most significant approach to be use by McDonalds in retaining its key strengths and maintaining high quality and consistency of its operations. The plan will also be implemented by partnering with Environmental Defense Funds, (EDF) that brings both respectability and valued expertise in the efforts to conserve the environment. This partnership is argued to be able to bring respectability treatment of expertise in its environment. It also enables a provision of a primetime venue where it is possible to make a difference while success such as incremental improvements is likely to have major ramifications as a result of the huge size of McDonalds’s operations. The concern for the impact on environment will be addressed by getting into partnerships with corporations that are considered friendly to the environment and have the goal of protecting the environment. This can be accomplished by ensuring its performs its responsibilities in environmental conservation. However, if there is a possibility of managing to get a breakthrough in collaborating with other organizations such as EDF, there is the possibility of high amount of good will with the public, that may result in can halo effect that can be preventive to other public relations challenges. The extent to which McDonalds can go on issues related to environment depends on the amount of success targets that need to be achieved by the activities that the company is involved in. The extent to which involvement in environmental issues should go is dependent on the costs of the initiative with respect to hard-dollar benefits as well as the levels of public relations that are obtained from being in the fight against environmental challenges. The bottom line is that effects brought about by environmental causes cannot prevent the accomplishment of the company’s mission related to environmental issues and the effort to provide consumers with quality products and services. 7. Communication and embedding of the methodology into the organization The information from the committee of risk assessment team will be communicated to various areas of implementation through respective representatives of those areas within the company. For instance financial personnel within the organization will be responsible for monitoring financial programs and activities within the organization and communication the reports to the risk assessment committee. This committee will then make recommendations that will be communicated to the accounting and financial control sector of the company. Any proposed changes will be suggested to employees by the financial advisor within the committee. The representatives in charge of IT systems will also come up with methods of monitoring those IT systems within the organization to see the impacts brought by their use to the organization. This will be useful in determining where greatest impact is felt. The observation will be forwarded to risk assessment committee who will make a recommendation for any changes to the process. The changes will them be communicated to employees in the IT sector within the company. These people will then make the changes required by the risk assessment committee. 8. Methodology for testing the plan Testing the plan will involve implementation of the recommendations of the risks assessment committee into action in various areas where recommendations have been proposed. For instance, recommendations of the committee to environmental representatives will be communicated to them so that they communicate the recommendations to employees in the field. The impact of implementation of the recommendation will be measured. If the recommendation brings a [positive impact, it will be considered a good recommendation. If it does not result into any good outcome, the risk assessment committee will have to come up with an alternative approach for the situation. The plan relating to management of financial risks will be tested by suggesting the implementation of communication from the risk assessment committee on the areas where financial allocations need to be made. The impacts of this budgeting proposal will be determined in terms of business performance in comparison to the previous budgets. The same methods of testing will be applied when implementing the recommendations of the committee to other areas of operation within the company. The impacts of these plans will be determined and any changes suggested. 9. Conclusion There are a number of difficult challenges that are being experienced by McDonalds. Key to its success is dependent on maintaining major strengths of provision of unending focus on maintaining high quality and consistent production while making tests on new options. The role of innovative initiatives may include provision of higher ends restaurants with new brands that cannot be tightened to McDonald’s new impression. The company can also engage in expanding more efficiently in other countries where it is estimated that the prospects of success is higher. However, despite the company’s environmental efforts they should not overshadow marketing initiatives that are the components of the goals of the company. Generally, the continuity plan proposed by this paper can be useful in sustaining the growth of McDonalds in the competitive business environment. 10. References Abrams, R. M.,2003. The successful business plan: Secrets and strategies. Palo Alto, Calif: The Planning Shop. Chiocca, E. M., 2011. Advanced pediatric assessment. Philadelphia: Wolters Kluwer Health/Lippincott Williams and Wilkins. Dening, T., and Milne, A.,2011. Mental health and care homes. Oxford: Oxford University Press. Hill, C. W. L., and Jones, G. R.,2010. Strategic management theory. Kieso, D. E., Weygandt, J. J., and Warfield, T. D. (2012). Intermediate accounting. Hoboken, NJ: Wiley. Lam, J., 2003. Enterprise risk management: From incentives to controls. Hoboken, N.J: John Wiley and Sons. Marchetti, A. M., 2005. Beyond Sarbanes-Oxley compliance: Effective enterprise risk management. Hoboken, N.J: John Wiley and Sons. McDonald, K. T. ,2010. Above the clouds: Managing risk in the world of cloud computing. Ely: IT Governance Pub. Needles, B. E., Powers, M., and Crosson, S. V. 2010. Financial and managerial accounting. Mason, OH: South-Western Cengage Learning. Peng, M. W., 2009. Global business. Mason, OH: South-Western Cengage Learning. Smart, B., 1999. Resisting McDonaldization. London [u.a.: Sage. Treviñe, A. J.,2001. Talcott Parsons today: His theory and legacy in contemporary sociology. Lanham [u.a.: Rowman and Littlefield Publ. Read More