Analysis of McDonald’s IT Governance Assignment

Management Assignment Sample on Analysis of McDonald’s IT Governance Assignment

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Management Assignment Question

Assessment one requires students to complete an in-depth capability (internal) analysis of their target organisation.

1.I really like the structure of the Trafalgar paper, where the authors assess the physical, human and organizational resources of the British fleet. They note that the combined Spanish and French fleet probably had superior physical resources, but this was overcome by the superiority of the British human and organizational resources.
2. The authors assess these resources using a variant of the VRIO (valuable, rare, inimitable, well organized) model, specifying those resources that led to the British fleet's competitive advantage.
Will Mitchell's 'Primer' provides an excellent overview of relevant models that you could use to structure the first assessment item. Section D of this document is the relevant section. He uses the VRIN model, which is a variant of the VRIO model.

Read more in the complete solution PDF document at the end of this page.

Management Assignment Solution

Assessment one requires students to complete an in-depth capability (internal) analysis of their target organisation.


The purpose of this assignment to choose a local company and perform an in-depth capability analysis with is internal in nature. For this task, McDonald's has been chosen as a target company.

There are various methods /models through which an internal analysis can be performed. In this, two methods can be considered as the models, which can be applied to McDonald's and identify McDonald's strengths and weaknesses in its business capabilities. In doing so VRIO model is chosen over VRIN model because the assignment requires an in-depth analysis of and VRIN model is used to differentiate between the necessary capabilities and key capabilities. VRIO framework highlights the capabilities, of an organization, which can provide competitive advantage to the organization through the nature of its capabilities, whether they are valuable, rare difficult to imitate and have organizational support. VRIO framework helps to distinguish between strengths and weakness of the company and thus helps to understand whether those strengths can really provide competitive advantage to the company or not.

McDonald's – An overview

Dick and Mac McDonald started McDonald's in 1940. It was started in San Bernardino, California.  The business pattern of McDonald's is either through franchisee, an affiliate, or the corporation itself. The revenue of McDonald's is generated through rent, royalties, franchise fees and the sales through its outlets (McDonald's, 2014).

Resources and Capabilities of McDonald's

McDonald has been one of the pioneers in the quick food industry. It has a wide range of menu, but the thing that differentiates McDonald's from other competitors is that it has created favorite menu. In doing so it must have applied or followed some strategy in its business. This strategy is developed based on its resources and capabilities of McDonald's. McDonald's resources and capabilities provide competitive advantage to McDonald's over its competitors.
In relation to resources McDonald's can have either tangible or intangible resources.
Tangible resources:
•    Financial resources – This is a fast food giant, which has a menu as per the different countries, so that there won't be any religious or cultural obstacles. McDonald is known for its geographically friendly foods menu. At present, McDonald has extended its wings to 120 countries round the globe. It is estimated that it serves more than 54 million consumers in a day (McDonald's, 2014). It has a net income of 5.58 billion (McDonald's, 2013).

•    Physical resources – There are lots of other similar players in the market. This has created a situation where McDonald's needed to innovate its products and operation so that the cost is minimized and thus the price of food is also decreased accordingly. Customer satisfaction is very important for any business. McDonald's should have better customer service so that more and more new customers are generated and the existing consumers become loyal consumers. In the present life style, customers look for healthy, nutritious food, which keeps them fit and fine. McDonald's has this range of foods, but still more development is required so that they can win in the competition. Locations are the key to any business. McDonald's location should be near to the locality, safe and also reachable.

•    Technological resources – The impressive part of McDonald's is that it does not only provide tasty and healthy foods, but it also makes the service so fast. It has a 90 second service goal, which is very impressive, and every customer wants service like this. In doing this technological resources have a huge role to play.

•    Organizational Structure – McDonald are highly reliable in franchise business. This type of business style makes it difficult for McDonald's to devise and implement strategy, which can be one and all for everyone. Thus, there is one management for all the franchise, which is central in nature.

Intangible resources:

•    Human resource – It does not work with local suppliers and distributors. This can lead to a problem of trust and confidence among its consumers. The local suppliers and distributors are trusted more by the local consumers than those who are international. With this weakness, there are chances that the image of McDonald's can be affected negatively. There are also chances that consumers may refuse to buy foods from McDonald's and thus McDonald's may need to shut its operation. The local consumers may also not like if the company does not employ local citizens and thus there will be problem in communication and also the local consumers may feel hesitate to talk to non-local. Language, customs, traditions, religion, and culture play a huge role in the success of any international company.

•    Innovation resources – McDonald's has a culture wherein innovation is from within the organization. It always forges for new opportunities. It has diversity in its workforce, which helps the company to deal with culture and language driven countries. It runs on a simple production system, which has an input – process – output. Since it makes in economies of scale, it allows the company to cut its cost and thus decrease the price of its products. It is known for its universal taste and quality. The products offered are tasty at the same time healthy as well. The impressive part of McDonald's is that it does not only provide tasty and healthy foods, but it also makes the service so fast. It has a 90 second service goal, which is very impressive, and every customer wants service like this. This can be considered as a McDonald's unique selling point apart from others.

•    Brand value – McDonald's possesses high value when it comes its brand. According to survey by Forbes (2014), McDonald's is ranked 7th in the world's most powerful brand. It has a brand value of $37.4 billion.

•    Organizational capabilities – McDonald's other special feature with the quick delivery system is that it has an assembly line procedure to fulfill customer's order. Once the order is made. It has also introduced the method of delivery wherein the delivery to the customer is done through drive-thru window. Once the order is made and the order is assembled for delivery the customer can collect through the window. The quality and taste of the foods are kept at the same for its entire restaurant no matter whether it is in Australia, or American or in Asia.


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