SMOC Group Presentation Golden Arches ver 1 25Sept final version

8/7/2019 SMOC Group Presentation Golden Arches ver 1 25Sept final version

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SMOC Group PresentationSMOC Group Presentation

Scenario Planning forScenario Planning for

Golden Arches RestaurantGolden Arches Restaurant

SdnSdn BhdBhd (McDonald)(McDonald)

by,by,Christine ChewChristine Chew

LamLam SienSien TziTzi

LewLew PuiPui MangMang

RustamRustam AffandiAffandi


2/20

Objective of Study:Objective of Study:

To study the strategic planning of Golden

Arches Restaurant Sdn Bhd (GARSB)

Study was done based on Scenario Planning

(initiated by Paul Schoemaker)

Scenario Planning is a planning tool to identify

the basic trends and uncertainty of GARSB

To develop tool to forecast near-term future and

anticipation of plausible future events that might

happen which give rise to significant effect on

GARSB


3/20

1980Dec

29Apr1982

Todate2010

License

obtainedfor McD

for Msia

1st McD

at JalanBukit

Bintang

194Restaurants

Nationwide

Important Development Milestones of Golden

Arches Restaurant Sdn Bhd (GARSB)

History in Malaysia

(Source: www.mcdonals.com.my)


4/20

To be our customers favourite placeand way to eat

To provide Simple Easy Enjoyment toevery customer at every visit

McDonalds mission is to be our customers favourite place and way to eat with inspired people who delight each customer with unmatchedquality, service, cleanliness and value every time.

Brand

Mission

(Source: www.mcdonals.com.my)


5/20

McDonalds 40% of quick-service

market, 72 million burgers

End of 2010 82 million burgers, 208outlets

By 2014 300 outlets, 50% market share

of quick-service, investment up to

RM530million

Source: (Ganesan, 2010).


6/20


7/20

Time frame &

Scope of analysis:

Review Past 5 years

Anticipation for Next 5 years

External forces e.g. Govt Policies, supplies,

consumers demand, competitors, economy

situation & social

Shall GARSB develop & extend

healthy product menu?


8/20

Source: (Kaur, 2005), (Singh 2007)

Highlights encountered in passed 5 years:i. Banned advertisement from kids health issues

such as obesity & diabetes

ii. April 2005: shortage of chicken due to HALAL

certification chicken prices 20%

iii. Encourage Bumiputra to be entrepreneur, financial

scheme, training, encourage rapid franchising

iv. Enforcement of nutrition facts labellingv. Pricing strategy

Lunch value meal RM5.95

vi. Operation hours

24 hours


9/20

Stake-holders

Share-holders

Employees

CustomersMalaysia

Government

Suppliers


10/20

Political-Legal Factors

Regulation and de-regulation trends :

Social & employment legislation

ax policy, trade & tariff controls

he stronger opposition parties inParliament ouse

Economic Factors

International Sourcing for raw materials

ax on Profit

Franchise fee to US Q outflow ofForex

Unemployment rate & inflation rate

Social Factors

Lifestyle changed

Cultural Factors

Environment Factors

Technological

IC advancement

Insignificant and not giving direct impactto technology


11/20

Political-Legal Factors

Regulation and de-regulation trends :

y Government policies on the

regulation of Fast Food Operation

y Government controlling on the

marketing of Fast Food Restaurantsdue to Health issues such as obesity,

cardiovascular diseases & etc

y Government controls the licenserelease of Fast Food Restaurants

Social & employment legislation

y Seek for balance relationship to

achieve mutual benefit ofemployment

Tax policy, trade & tariff controls

y The implementation of the GST innear future

y Foreign workers policy

The stronger opposition parties inParliament House

Economic Factors

International Sourcing for raw materials

y Global supply trends

y Currency Exchange (USD vs RM)

y Import Beef & Potatoes demand >supply in local market

Tax on Profit

Franchise fee to US HQ outflow ofForex

Unemployment rate & inflation rate

Social Factors

Lifestyle changed

y Higher income

y Trend to dine out & demand for

higher food quality

y Ambient, hygiene environment

requirement

y Facilities available: wireless, online-menu, delivery service

Cultural Factors

y HALAL certification

y Localized menu such as Fried

Chicken, chicken porridge

Environment Factors

y Critics from environmentalists one

of the largest of potatoes, beef andchicken consumption

y Causes of Green House Effect

methane gas from cows ranch

y Use of polystyrene boxes to servefood

Technological

ICT advancement

y Leverage of Supply ChainManagement on inventory

management, ordering procedure,

payment system to suppliers etc

y Implementation of technology

promotes cost saving, improveeffectiveness and efficiency

Insignificant and not giving direct impactto technology


12/20

Porters 5 Forces

Suppliers

Power

Mac Food (M) Sdn Bhd

near monopolyLow bargain power on price

Competitors Compete with others Fast food e.g. A&W, KFC

Compete with local restaurants e.g. Old Town Ipoh

White coffee, Secret Recipe

Customers High Power in customers many choices

Price driven, attracted by promotion e.g. value

meal at RM5.95

Substitutes Wide range of substitutesGARSB: low power

Threat of New

Entrant

Market leader in hamburger

Established & outlets in major cities/towns

Threat low towards GARSB


13/20

Trend Perceived Trend in McDonalds

T1 Political Legal : regulation & deregulation

T2 Economy Factors : International sourcing forraw materials, inflation rate, unemployment

T3 Social : life style change

T4 Technology : ICT advancement (not givingdirect impact to technology)

T5 Fast Food Lovers

T6 Switching to Vegetarian


14/20

Uncertainties in 5 years Possible outcomes of Uncertainties

1st Local Politics & Policies y Election in every 4-5 years interval

Political status y New Policies maybe implemented

2nd Uncertainty

Competitors

3rd Uncertainty y Decreased in sales

Health conscious y Loss market share

4th Uncertainty

Inflation rate

5th Uncertainty y Cost Effect

Raw Material supply y Quality Effect

6th Uncertainty

Withdrawal of franchise license

7th Uncertainty y Tarnish market image

Extremists to boycott Western F&B y Low Public Relation

y Increasing number of competitors to take

over the market share

y Government reduces commodity subsidies

(Eg: petrol)

y Possibility of changes in master franchise

licensing for McDonald


15/20

Correlation Matrix U1 U2 U3 U4 U5 U6 U7

U1 - ocal Politics & Policies x + + + + +

U2 - Competitors x x ? + + 0

U3 - Health Concious x x x + + ?

U4 - nflation Rate x x x x + ? ?

U5 - Raw Material & Supply Chain x x x x x + +

U6 - Withdrawal of Franchise isence x x x x x x 0

U7 - xtremist to boycott Western Food x x x x x x x

Legend:

+ : Positive 0 : Zero

- : Negative ? : Indetermination x : access via mirror image


16/20

Key

Drivers

Govt Policies

(regulations)

Social

(lifestyle)

Raw Materials

supply

Economy

(tax & subsidy)

Govt banned advertisement on

children

Govt may ban carbonated

beverage in fast food restaurants,

only fruits juice and plain waterpackage

Consumers are more health

conscious, avoiding high calories,

high fat & high sodium

Govt may increase higher taxon import materials & reduce

subsidy

Higher tax & reduce subsidy

higher raw material cost

Tiger

roar

Scenario


17/20

Key

Drivers

Reinvigorate

Food by

competitors

Market Leader inInnovative and

Creative Health

Based

Health Consciousness

And Health Initiatives

Employees as

The Advocator

Healthier As

Hercules

Scenario

Specific health food providers

and lifestylesb

enefits Market leader in innovative

and creative health-food-based

promotion

Longer life expectancy

Decrease NGOs demand Range food and daily

consumptions regularly

Vigorously health initiative

Employees as advocates of

healthy lifestyles as internalchange agents

Ray Kroc once quotes,

Look after the customer and

the business will take care of

itself.

New Innovation

on Menu by

competitors(Source: www.mcdonals.com.my)


18/20

QuestionTiger Roar

Scenario

Healthier as

Hercules

Scenario

Q1: Are the trends compatiblewithin the chosen time frame?

Yes. Yes.

Q2: Do the scenarios combine

outcomes of uncertainties that

indeed go together?

Yes. Yes

Q3: Are the Major Stakeholders

placed in positions they do not

like and can change?

No. Yes


19/20

Govt policies promote healthy lifestyle

Consumers increasing awareness in health

management

Competitors develop low cal, low fat, low

sodium menu

GARSB: To develop & extend

healthy product menu locally


20/20

Thank you

Documents

SMOC Group Presentation Golden Arches ver 1 25Sept final version