Business policy and strategy

Summary of McDonald’s strategies and performance

The McDonalds Corporation is a successful global restaurant that operates chains around the globe. The organization has employed global expansion and effective management strategies to enter new markets and gain a share of the diverse, fast food market. It is clear that McDonalds has achieved this massive success. The business has established best practices in the global food industry. However, it has also experienced international growth challenges trends in the recent past. These factors have seen the company perform poorly in its different businesses in both local and foreign nations. (Mourdoukoutas, 2013)

One of the strategies employed by McDonalds is the creation of both customer and brand loyalty for its products and services. Right from the beginning, the founder, Ray Kroc ensured that the French fries customers bought in one restaurant would be similar to another McDonald restaurant by developing a sophisticated operating and delivery system. He proved himself an industrial pioneer who revolutionized the American restaurant industry by imposing discipline on the production of milkshakes, hamburgers, and French fries. The consistency made McDonald’s the brand name that defined American fast food. In the restaurant industry, the McDonald’s is well known for high-quality foods and services evident in the quantity of customers they serve. The making of a uniform and consistent product for customers is one of the most important aspects of McDonald’s success. (Beef Central, 2015)

Irrespective of where customers purchase their products, once they see the ever-present “golden arches” they know exactly they are expected to get. McDonald’s Mission Statement has helped the business to focus on what really matters both to itself and to stakeholders. It has acted as a guide to strategic and routine operational decisions. In addition, it represents the glue that binds all the franchises under the organization together. Another strategy employed by McDonalds is rapid expansion. Right from the beginning, McDonalds expanded by franchising. By 1960, more than 200 McDonald’s outlets were operational. McDonald’s Corporation has been recording declining sales and profits both in its local and foreign businesses. On the other hand, competitors have been formulating strategies to attract more customers to their business. In 2015, McDonald’s reported 30% drop in profit and 11% decrease in revenue for the first three months of the year. It announced hundreds of store closings. The company has been trying to fix its problems particularly in the U.S market that generates 40% of its profit. It is simplifying its menu to appeal to its customers. It is testing all-day breakfast and has slowed down service and focused efforts on reducing errors in orders. (Mourdoukoutas, 2013)

The reality is that McDonald’s recent performance has been poor. In 2015 first quarter, the company recorded US$5.6 billion in global revenue down from $6.7 Billion in 2014 first quarter. The net income recorded amounted to $ 811 million down from $1.2 billion in the year 2013. Part of the business expenses arose from charges linked to restaurant closures. In the US and Canada, 220 restaurants were closed as well as 130 in Japan. The company is expected to close other 350 restaurants worldwide to avoid further loses. McDonald’s largest division in the United States saw a decrease in sales of up to 2.6% reflecting low customer traffic and negative sales amidst high competition. (Mourdoukoutas, 2013)

The operating income decreased by 11% as a result of weak sales and restructuring and closing activities. In its Europe’s division, the business experienced a decline in sales of 0.6%. First quarter operating income decreased by 20% partly as a result of currency and inflation pressures in Russia and continuing macroeconomic pressures facing much of Europe The business’s Pacific, Asia, Middle East and African divisions saw first quarter sales decrease by 8.3%. Asia region had a prolonged impact of consumer perception issues particularly in Japan over food safety breaches. The operating income in these regions decreased due to restaurant closing in response to poor performance.

Compare and Contrast Systems Development Life Cycle (SDLC) Models

Introduction
SDLC is a conceptual model integrated into the system development process that consists of a series of phases to plan, analyze, design, implement and support an information system.

Seven-Step SDLC Model
Planning
Planning is the first phase of the seven-step SDLC model and is essential in determining the necessity of a proposed system so as to achieve efficiently and effectively the organization’s strategic goals. Planning phase entails of determining the project scope and the IT specialists and analysts define the location for the execution of the system functions. (Ahituv, Neumann & Zviran 2002)

System analysis
System analysis involves the IT specialists and analysts, and the end-users to work together to identify the need for change or the source of the problem. (Babers, 2015) The development team that got identified in the planning phase works together with the system users in modeling and the definition of the business process in detail.

Design
This phase involves the determination of the information requirements of the new system. (Shim, 2000) Simply the description of the necessary features, specifications, and operations of the new system get done in detail.

Development
The development phase involves the transformation of the design documents into the actual system. (Ruparelia 2010) System designers build and program information technologies and information system projects at this stage.

Testing
The purpose of integration and systems testing is to determine whether the new system meets the set of business objectives set out in the planning phase and to check for bugs, errors, and interoperability. The typical approach to testing of the design is to move from an individual element to the view of the entire system. (Norton, & McGraw-Hill, 2002)

Implementation
The implementation phase entails of the distribution of the new system to all the organization’s personnel and installation in the various departments. After installation in the departments, the workers get training on the operation of the new system. (Crnkovic, & Larsson, 2002) They also receive documentation such as system manuals and user guide to instruct them on the use of the system.

Operation and Maintenance

The final phase of the seven-step SDLC model involves the evaluation and maintenance of the new system. During the systems support and security phase, the IT staff is responsible for the maintenance, improvement, and protection of the new system. Maintenance involves correction of errors and adaptation to the changes of the environment. Improvement involves the alterations to provide new features and benefits while protection includes the safeguarding the new system from internal and external threats. (Shelly, & Rosenblatt, 2011)

Four-step SDLC Model
Definition Phase
The definition phase is the initial phase of the four-step model and consists of preliminary analysis, feasibility study, information analysis, and system design. The preliminary analysis gets used to determine the problem that requires a new system or system modification in an organization. The feasibility study also determines the necessity of the project and draws a preliminary plan on how it should proceed if justified. The information analysis consists of an analysis of the present system, the determination of the information requirements and the conceptual design of the proposed system. The system design entails of developing a program and procedure specifications that would get used by IT specialists and developers of the proposed system.

Construction Phase
The construction phase comprises of the programming, procedure and development. (Ruparelia, 2010) The programming activity involves the coding and testing of the computer programs on the computer system. The procedure and development include writing and the testing of procedures for various users and operators. The programming results in computer instructions whereas the procedure and development results in instructions meant to guide the people involved in the proposed system.

Implementation Phase
The third phase is the implementation phase that involves conversion in Information systems technologies. The implementation phase involves the training of the workers that will operate and use the new system, breaking the system in, and finally acceptance testing by the end-user. (Li, 1990)

Operation and Testing Phase

The last step of the four-step model comprises of operation and maintenance, post audit, and termination. The new system at this stage operates as a production facility, processing and producing information, and at the same time undergoing maintenance. Throughout the functioning of the system, periodic post audit review forms control points. The purpose of the reviews is to indicate when the operation cycle of the current system approaches the end, and a new cycle life get indicated. The current system gets terminated when its operation in the organization is not worthwhile. (Ahituv, Neumann & Zviran 2002)

Compare and Contrast the seven-step and four-step SDLC Models
The seven-step and four-step models are systematic processes used in system development by organizations and businesses. They also have closely related processes though with different activities at each phase. Both processes are used to produce new systems that assist in corporate transactions, the connection of businesses and office data, and also support users in the architecture of strategy. The life cycle of the two models starts at initiation and ends after termination. (Isaias & Issa 2015) However, there are several differences between the two SDLC models. The seven-step model is highly preferable and produces high-quality systems because it entails of more stages that allow the solving of complex problems, end-user involvement, and flexibility. Unlike the four-step SDLC model, the seven-step SDLC model consumes more time and resources in building, implementation, and construction of information systems. The suitability of the seven-step SDLC model is handling complex problems that require more concentration. The four-step SDLC model gets suited for the less complex issues that get needed in a short period.

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