NX0474 Strategic Management for Competitive Advantage

Introduction

Strategic management accounts for providing overall direction through development of policies and plans designed for accomplishing objectives. Emphasising the aspect of D-AEX, the major business objective is increasing the market share by about 3 to 4% for both medium and large sized cars within 4 years. It is correlated with its mission concerning earning satisfaction of customers by delivering good services and sales. In the course of the game, the company performance has been identified to be under performed in round one with a potential reason being inadequate market research. Performance of D-AEX in course of the round too has highlighted a slight improvement in its performance than estimates. Outcomes of D-AEX from round 3 has highlighted significantly better financial and non-financial performance with higher actual performance in round 4. Elicited from these performance outcomes, this assignment is also aimed at undertaking a reflective account on obtained learning and team performance.

Company Performance

Part 1 Round 1

Round 1 forecast

In round 1, it was expected by D-AEX that it will achieve a market share of 3%-4% within 4 years by selling both medium and large-sized cars.
Assumed profit of this company was £1000m within 4 years from inception, so around £333m average profit each year.
To enhance production, the D-AEX forecasted employment of 4000 employees and increase by 5% each year till the end of year 4. Estimated cost of D10 model car was £22,925 and estimated price of D9 model car was £31,190.

Round 1 result

In reality, market share of D-AEX was 1.46% for D10 cars and 1.71% for D9 cars.
Actual sales of D-AEX were £2894.75m in round 1 with a model price of £22925 for D10, and £30000 for D9. Besides, profit from round 1 was £235.59m.
Total workforce during round 1 was 2725. This highlights underperformed results of D-ZEX as compared to targets.

Differences and explanation

The evaluation of estimated and actual results highlights underperformed market share of D-AEX. One of the reasons that might have impacted market share of this company was inadequate market research. As per Moisander et al. (2020), market research helps in gathering data regarding target demographics and making the offerings much more efficient. In case of D-AEX, lack of adequate market research resulted in improper setting of sale price of D9 cars and also impacted forecast of market share. Besides, similar results have been found in actual and forecasted sales even when actual cost of D9 has been reduced by £1190. Based on production record, it can be seen that no unsold stock was left and the company might consider increasing production in next round.

Round 2

Round 2 forecast

In round 2, it was expected by D-AEX that it would achieve a market share of 3% by selling D10, D9, and D8 car models.
Considering last round’s results, estimated profit margins were £300m.
For enhancing production, the D-AEX forecasted employment of 3000 employees in this round. Estimated price of D10 model car was £75000, £46500 for D9 and estimated cost of D8 model car was £60000.

Round 2 results

In reality, market share of D-AEX was 1.46% for D10 cars, 1.71% for D9, and 1.07% for D8 cars.
Actual sales of D-AEX were £4104.38m in round 2 with a model price of £75000 for D10, £46500 for D9 and £60000 for D8. Besides, profit from round 2 was £318.79m.
Total workforce during round 2 was This highlights slightly over performed results of D-ZEX as compared to targets.

Differences and explanation

Analysis of D-AEX round 2 results highlights slightly better performance than estimates. The company was able to maintain similar sales as per targets, and acquired slightly higher profits, along with high market share. The company employed 950 higher employees in round 2 than estimated results. To get higher market share in automobile industry, the company discovered an uncontested market space where D-AEX can become the dominant operator. Comparing estimates with actual results, similarities can be found in profit margins, market share, and workforce. It can be seen that actual results of D-AEX were better than estimated results. Also, achievement of higher market share highlights better performance of D-AEX in round 2 in comparison to round 1.

Round 3

Round 3 forecast

In round 3, it was expected by D-AEX that it will achieve a market share of 4% through sales of both medium and large-sized cars.
As assumed profit for next 4 years is £1000m, so £333 is estimated amount of profit for each year.
For production process, D-AEX forecasted employment of 4000 employees in third round.
Target price for cars are £75000 for D10, £46500 for D9, £60000 for D8, and £80000 for D7.

Round 3 results

In reality, market share of D-AEX was 1.35% for D10 cars, 1.60% for D9, 0.95% for D8, and 1.44% for D7 cars.
Actual sales of D-AEX were £5972.68m in round 3 with estimated model prices. Besides, profit from round 3 was £475.16m.
Total workforce during round 3 was This highlights significantly better performance of D-AEX than round 3’s estimates.

Differences and explanation

By comparing estimates and actual results of round 3, it can be seen that D-AEX has maintained better financial and non-financial performance. On one hand, the company was able to gain 1.34% higher market share than estimates, on the other hand, the company has £142.16m higher net profits. The company was able to gain higher market share by launching a new car model named D7 in the market. Main reason for improving performance is to cater to a higher number of customers between age group 25-40 years. As argued by Streimikiene et al. (2021), demographics are key to businesses in today’s market. Developing products and services by focusing on particular target markets allows organisations to attract a higher number of customers. Usage of such strategy has allowed D-AEX to become more visible in target market.

Round 4

Round 4 forecast

In round 4, it was expected by D-AEX that it will achieve a market share of 5% through sales of both medium and large-sized cars.
As assumed profit for next 4 years is £1000m, so £333 is estimated amount of profit for each year.
For production process, D-AEX forecasted employment of 5000 employees in fourth round.
Target price for cars are £75000 for D10, £46500 for D9, £60000 for D8, £80000 for D7, and £78000 for D6.

Round 4 results

In reality, market share of D-AEX was 1.32% for D10 cars, 1.61% for D9, 0.91% for D8, 1.41% for D7 and 1.19% for D6 cars.
Actual sales of D-AEX were £7276.83m in round 4 with estimated model prices. Besides, profit from round 4 was £710.54m.
Total workforce during round 3 was These results indicate that the company has over performed in comparison to estimates.

Differences and explanation

As per comparison of round 4 results with estimation, it can be seen that actual performance of D-AEX is significantly high. The company has acquired a 1.44% high market share, profits increased by £377.54m, and has employed 2950 higher employees than estimated. Main reason for such an improved performance is good leadership and management of operations. In both rounds, the company had 0 unsold stocks and an increasing trend of profits. During inception, the entrepreneurs had aim of developing D10, and D9 model cars as per customers’ points of view. During round 4, it can be seen that the company is efficiently developing cars as per customer wants as it has increased demand.

Part 2

Key Performance Measures
D-AEX
	Round 1	Round 2	Round 3	Round 4
(1) Production (Units)

D10	70000	75000	75000	75000
D9	43000	46500	46500	46500
D8		60000	60000	60000
D7			80000	80000
D6				78000

(2) Sales (£)	2894.75	4104.38	5972.68	7276.83

(3) Gross margin (£)	868.98	1138.92	1587.52	1763.42

(4) Unsold stock (Units)	0	0	0	0

(5) Post-tax profit (£)	235.59	318.79	475.16	710.54

(6) Net cash position (£)	131.19	570.09	610.25	1470.94

(7) Market share (%)

D10	1.46	1.46	1.35	1.32
D9	1.71	1.71	1.6	1.61
D8		1.07	0.95	0.91
D7			1.44	1.41
D6				1.19

(1) Production

Production highlights total units of products manufactured by an organisation. These entities aim to manufacture products according to needs and requirements of customers (Helo et al. 2017). In the case of D-AEX, an increasing trend of SKUs has been found. In round 1, it had 2 models of cars but increased to 3 in round 2, 4 in round 3 and 5 in round 4. Main reason for this increasing trend of SKUs was expansion in the market. The company aimed to develop car models according to customer expectations. Thus, with increasing demand, D-AEX started increasing number of car models while keeping production units of each model the same.

(2) Sales

Sales referred to revenue earned by the company by selling the produced goods and services. As argued by Bartolacci et al. (2018), maintaining an increasing trend of sales revenue highlights sound financial performance of a company. In the case of D-AEX, an increasing trend of sales has been found. In round 1 the revenue was £2894.75m which increased by 42% in round 2, 46% in round 3 and 22% in round 4. Main recession for such improvement was increasing number of car models from 2 to 5 by round 4. This means the company was able to cater higher number of customers based on their preference for car price and model.

(3) Gross margin

(4) Unsold stock

Unsold stock highlights stock in hand at end of a financial period. Keeping lower unsold stock highlights the sound ability of organisations to convert stocks into sales or cash (Akbar et al. 2021). In case of D-AEX, 0 unsold stocks have been found in both rounds. This highlights strong market research by entrepreneurs of D-AEX which has helped them manufacture an exact number of cars demanded in the market. Moreover, as the company is developing car models as per customer needs, it could be one of the reasons behind sales of all stocks. However, the company maintains production unit of each model constant in the four rounds. Thus, it can be said that a light increment in product units could be helpful. For instance, in round 3, market share of D8 model has been reduced to 0.95% from 1.07%. Shortage of supply could be the reason behind reduced market share of D-AEX for this model. A similar reduction in market share can be also observed for D10 and D9 models in round 3. Thus, production units of each model should be increased slightly even when there exists a risk of closing inventories.

(5) Post-tax profit

The post-tax profit highlights the amount of profit remaining within the business after fulfilling tax obligations. As it is the net earnings that remain in the business, having these earnings in an increasing trend is crucial for an organisation (Bala and Verma, 2018). Post-tax profits of D-AEX increased to £710.56m in round 4 from £235.59m in round 1. Post-tax profit has increased by 35% in round 2, 49% in round 3 and 50% in round 4. Main reason for such improvement in post-tax profit is gradually increasing models of cars in each round. Also, the company is charging significantly a higher price for each model. Thus, the company left with a significant amount of post-tax profit at end of each round.

(6) Net cash position

Net cash position represents the amount of cash left in the business after paying off all liabilities. This means, having enough cash to fulfil short/medium/long-term obligations highlights a solvent business position (Benson and Odey, 2022). D-AEX has a cash balance of £1470.94m in round 4, £610.25m in round 3, £570.09m in round 2, and £131.19m in round 1. These figures reflect an increasing trend in cash balance. Contextual reason for such increasing liquidity is keeping lower debts in comparison to revenues. Hence, D-AEX was able to maintain a favourable amount of cash even after paying off all dues.

(7) Market share

Market share is the portion of the market controlled by a specific product or organisation. Having a higher market share gives a competitive edge to companies (Shapiro, 2019). D-AEX has total market share of 3.17% in round 1, 4.24% in round 2, 5.34% in round 3, and 6.44% in round 4. This highlights increasing trend of D-AEX’s market share. Main reason for such an increasing trend is ability of this company to serve a higher number of customers. As it offers car models of different price ranges, it is able to cater to the needs of many customers. However, the company has reducing trend of market share for each model of car that could be improved be increasing production units. In essence, favourable financial and non-financial performance of D-AEX has been found by rounds 2-4.

Learning

Financial Performance Review

In terms of the financial performance review of D-AEX, it can be found that the financial performance review has highlighted the actual results thereby focusing upon the market share of D-AEX. Through this, the key aspects have been recognised which aids in impacting the market share of the company initiating the market research (Saragih et al. 2020). With respect to the evaluation of expenses, it has been found that the overall expense for promotion turns out to be 83 million. The expenses of promotion aids in proper marketing thereby showcasing the prominent performance in the sales. It also aids in offering the customers with proper services so as to initiate growth and development.

D-AEX International is identified to maintain the decision of 3 main pricing strategies namely value based, cost plus, and competition. This leverages a scope for the brand to sell its D10 and D9 models at a significantly lower rate thereby giving them a competitive advantage over peers. D-AEX is noted to have undertaken a loan of £50.00 in Round 1 followed by another new loan in Round 2. However, both balance before loan and closing bank balance accounted for £570.09, thus signifying an existing loan and no involvement of a new loan. Small businesses tend to become crucial for economic development following its rule as an engine of employment. Saadallah and Salah (2019) asserted that loan volume renders a negative impact on financial performance of small businesses. In this context, having a new loan of £120.00 in Round 3 and yet having a similar initial and closing balance in Round 4 highlights the absence of any new loan.

Cash flow is substantially essential as it enables organisations to meet their existing financial obligations along with accounting for future planning. Conversely, cash flow is also undertaken as a potential challenge among small and medium-sized enterprises (American Express, 2021). Concerning the operations of D-AEX, it is identified that its cash flow is the closing bank balance of £1470.94. This has highlighted a constructive balance between its inflows and outflows in the course of the last tenure. It is identified from the pricing structure of D-AEX that it makes the cars significantly worthy with the countless up-to-date features, thereby inviting a massive demand in the European market. Faith (2018) opined that consumers tend to have a substantial perception of value reflected by the products of a form through its established prices. This also has a determining impact on the purchase decision of customers and a market hold over other competitors.

Contrary to this understanding, a major limitation or a factor that can be improved for D-AEX is its pricing approach. Its substantially high pricing can be a challenge for the brand over competitors in the European market. On a contrasting note, a major advantage for D-AEX and associated stakeholders is its significantly good market research. Malhotra (2018) posited that current state-of-the-art requires potential emphasis on market research for shaping the business future. This is highlighted by the significant role played by D-AEX in terms of extensive research to bring about and produce exact units. The same is also highlighted through negligible closing stock at the end of each round posing a strength for the brand.

Operational Performance Review

Increase in competition, globalisation as well as increase in customer demand for the unique products have led to a prominent and drastic increase in the number of products offers in terms of D-AEX. The business is accounted as a recently budding car manufacturing business in the European market who aids in endeavouring towards the development of the automobiles at the affordable prices as well as incorporation of new technologies which turns out to be relevant for the customer requirements in a regular manner (Prajogo et al. 2018). Since the operational performance of D-AEX turns out to accounted as a key to competitiveness with respect to the business performance. It is critical in understanding the impact of complex product offerings in terms of operational performance with respect to time, cost, quality as well as delivery. Here, understanding the key impact on the lead time as well as reliability of delivery turns out to be imperative in the era to compete with the supply chains where D-AEX is needed to enhance the flexibility towards the customer with respect to logistics, lead time and variety.

For D-AEX, operational performance management plays a significant role in terms of monitoring as well as determining that it addresses all of its prescribed goals along with targets. It also aims to communicate the achievement in an effective manner to the key internal and external stakeholders. In the case of D-AEX, the business aids in imposing the different techniques and measurements in keeping track of the performance which is predominantly on the basis of productivity (Aydiner et al. 2019). For instance, the company measures its manufacturing performance on the basis of the number of cars produced a day for the customer service division, it aids in considering the significant number of inquiries resolved, emails answered as well as complaints handled. Other than this, D-AEX also aims to establish key performance indicators which aids in monitoring the production along with inventories. It also primarily evaluates the success of achievement of objectives within the predetermined duration.

Risk management also comprises the identification of risks in the form of sudden unintended accelerations and brake failures, evaluating the same and finding key ways to control the same. In fact, for the prospective managers at D-AEX, familiarity along with experience aids in application and monitoring KPIs for the particular area which determines core advantages thereby depending upon the core business values. D-AEX key stakeholders primarily comprises the investors, directors, employees, shareholders, partners, financial institutes as well as the public. Communicating performance of the entities is not restricted in terms of disclosing the financial reports thereby informing them about the vision, strategies, milestones, key challenges along with major accomplishments (Munir et al. 2020). In addition to this, the company further aims in publishing its annual report on the website thereby disclosing the financial data in terms of the strengths along with values of the company. It also focuses upon the potential risk factors, its products, services, infrastructures and network information. In addition to this, some major crises primarily happen where the company aids in responding promptly for the purpose of keeping the crisis under control. It also helps in the utilisation of the managerial resources for the purpose of reducing future risks in a proactive manner.

Marketing Performance Review

The objective of engineers of D-AEX aids in the production of the best high performance luxury sedan on the market regardless of its electric capabilities. It is being composed through the help of a perfect blend between the exceptional performance, attractive styling as well as functionalities needed to be taken into consideration. Beyond the performance, in terms of styling along with energy effectiveness determines additional advantages which initiates to bring value to the consumers (Dubey et al. 2020). Furthermore, in terms of reviewing the marketing performance of D-AEX, it aims to target the individuals belonging to the age group of 25-40 years of age for the first model medium cars. D-AEX almost aims in ensuring a prominent market share within the highest number of 1.46 on the Model D10 for the respective medium cars during the first year. In addition to this, the demand turns out to be quite high for both the framework and the market here, which aims in sharing for the medium cars which turns out to be excellent only because of the age group which is being targeted. In addition to this, D-AEX aims to target individuals from the age group of 25-40 years for the second model large cars. It also entertained proper market share almost with the high number of 1.71 on the model D9 for the large cars during the initial years. In addition to this, the business aids in concentrating more upon offering the high tech cars determined at a reasonable price range.

In addition to this, it has been found that the designs along with features are being picked out for the customers who wanted a reasonable as well as affordable automobiles with respect to the prominent range of the contemporary comforts. One of the prominent channels of network and promotions for D-AEX turns out to be dealer incentives. In this respect, with respect to the dealer incentive the business firms such as D-AEX would aid in offering key incentives to the dealer which aids to showcase proper performance in terms of their respective sales. Other than this, the second most significant channel of promotion for D-AEX is to provide promotional offers (Abushaikha et al. 2018). This aids in giving the customers in terms of the tendency for purchasing as this is accounted as a primary attribute of the customer. Through the usage of the smart driving techniques, it would help in lessening traffic congestion which can help in the prevention of certain accidents. The lighter engine is found to put less strain in terms of the front axle and cause less wear over time thereby allowing lower expense of maintenance thereby seeking improvement of the fuel effectiveness of the car.

HR Performance Review

In terms of being an emerging and new business concerning the global automobile sector, D-AEX accounted for making the decision of keeping producers at quite a usable and adaptable response. Creation of a base pay structure from scratch or accounting for revising an existing one to accomplish changing needs requires a project to challenge its best (SHRM, 2022). It is also argued that the process of compensation system development does not require to be a dreaded or overwhelming goal. Illustrated from the case example of the D-AEX International, it is identified that the pay structure of this company was significantly higher than the above average. As an example, given the average amount of £315 or that of the wages of its competitors accounting for £485, a monthly wage for D-AEX accounted for £580. In this regard, DAE X can account for HR performance in terms of gathering background information and determining sources of external market data.

HR performance requires conducting relevant market data analysis along with developing effective pay structures. This is to be accompanied by calculating potential costs of the pay structures followed by implementation and evaluation of the new developed structures. However, it is identified for D-AEX that training requires to be engaged besides 2% of the overall wage structure for establishing a greater supply concerning the relevant period. Stock of human capital regarding an organisation serves as an essential determinant for its innovation capability (Dostie, 2018). Henceforth, any increase in the particular stock through involvement of organisation-sponsored training holds a potential impact on increased innovation. On this note, the decision of D-AEX in incorporating training as part of the structure has had a significant positive impact on its stakeholders. This can also prove effective on a future note for its employees or workers in the matter of improving their efficiency and overall productivity. Additionally, this can also cater to reduce waste of money, time, and other resources through effective training of the workforce for D-AEX.

Concerning the external stakeholders for D-AEX, being subject to minimum wage and legal working hours can also render a substantial positive impact on the government. Following substantial compliance with legal attributes, this firm will also have a significant advantage through this decision in gaining brand equity and market edge. Cooke (2018) contended that human resources hold a significant role in ensuring safety, health, and satisfaction of the workforce. Having a substantial HR operation in place enables the existence of proactive workplace policies for maintaining desired protective measures along with implementing and providing relevant solutions. The following decision is identified to have been considerably beneficial for D-AEX in terms of improving the total workforce accounting for 2,725 in Round 1 to that of 3,950 during Round 2. Likewise, the count is also identified to have improved and risen towards 5,950 during Round 3 accompanied by 7,950 during Round 4.

Conclusion

Through the concerning study, it is inferred that D-AEX has been subject to a significant performance management with a proactive blend of financial, operational, marketing, HR structures. It is determined from the constructive analysis that D-AEX is having considerable strengths on grounds of its HR structures and financial performance. Accounting for in-depth market research is identified to have been serving as a strength in maintaining a planned loan approach and cash flow. It is also attributed through the training standards and workforce increase incurred by D-AEX International. On a contrasting note, all the associated driving factors are also deduced to have certain limitations. This is concerning the aspect that D-AEX requires emphasising the pricing structure being substantially high along with addressing the wage structure as per the market standards. It is also obtained that D-AEX would require focusing on its risk of sudden unintended accelerations and brake failure operations.

Team Performance

Team Part

Concerning a reflective statement, the undertaken team performance as part of carrying out this significant assessment involved a potential role of collaboration. According to Reeves et al. (2018), workplace collaboration accounts for a potential role in improving productivity while rendering a sense of purpose in group work. Despite the involvement of diverse members in our assigned team, we had the ability to involve substantial collaboration that made it easy to brainstorm ideas. This act of collaboration became beneficial for us with the substantial involvement of giving and receiving feedback from our group members. It was also accompanied by sharing credit for good ideas with others in addition to acknowledging the skills, creativity, contributions, and experience of others for effective establishment of interpersonal relationships. Besides, listening to and acknowledging the concerns, opinions, ideas, and feelings of others proved advantageous in bringing about productive collaboration for our target project outcome (University of Strathclyde, 2022). Each of the individuals taking up the responsibility of being honest and honest and having integrity in addition to being supportive and kind played a crucial role for our project success.

Following our successful teamwork and project outcome, another crucial advantage was communication. Mohanty and Mohanty (2018) put forward that intervention strategies and project development has a potential role in enhancing teamwork effectiveness. On this note, major skills concerning effective communication that enabled our successful team work with events regarding desired body language and trying not to rush. Moreover, being clear and concise in addition to having substantial awareness of each other played a crucial role in understanding the need for informal or formal approach. It is attributed that every individual tends to have different communication abilities and skills with significant hold over verbal and nonverbal communication styles (Rosser, 2021). Despite our differences in opinions and diverse cultural aspects, resolving a judgmental approach and having fair treatment for everyone proved advantageous for us in maintaining teamwork and working in collaboration towards our set goals. On a parallel note, teamwork can also focus on better sharing of ideas and understanding individual roles for future performance.

Individual Part

Through this project operation and the undertaken team work, I had a significant insight into my leadership skills that served as an advantage. Great leadership is identified to be dependent on a complex correlation of managerial circumstances and skills but without emergence on its own (Emeritus, 2022). In this respect, through constant self-reflection and obtaining feedback from the peers involved with this project, I developed that my leadership strengths involved strong communication ability and strategic thinking. This also involved delegation, emotional intelligence, and integrity that helped me motivate others. I have developed the insight that my leadership’s approach holds a substantial correlation with transformational leadership in the matter of involving others and collaborating in a team performance for making relevant decisions. Imran et al. (2019) pointed out that there tends to be a significant correlation between project success and projecting work factors. This was further promoted through my transformational leadership attribute in the matter of being open to new thoughts, having the inclination towards broadening minds, and commitment towards active listening.

Feedback from mighty members also elaborated my tolerance for intelligent risks, ability of inspiring them, and willingness to accept responsibility contributing to developing a sense of trust and confidence among them. Irrespective of this, it is argued that I had certain difficulties with work allocation and flexibility. Flexible managers possess the understanding that processes and works can always be improved (Emeritus, 2022). However, my sense of rigidity and confusion often made it challenging for me in making adequate decisions. It also served as a weakness for me in deciding on the significant works to be allocated to the team members and being resilient with my actions. The following can be managed by extensive research and analysis in addition to prioritising opinions of others for being more flexible. Papadopoulos (2018) established that societies tend to be enriched by the entrepreneurial and hardworking drive of immigrants with vibrant cultural and social diversity. As a way of setting down my roots for diverse team members, it was also deduced that my cultural competence and ability to blend with them proved effective.

Assignment C

Introduction

In the age of globalisation, social expectations towards corporate behaviour changes influence evolutionary process of implementing “Corporate Social Responsibility (CSR)” within the business process. Owing to the concept of CSR activities, commencing sustainable development in business processes has received potential attention into industrial perspectives and policy makers accordingly. This report aims to determine CSR, sustainability, financial performance and corporate governance activities of “McDonald’s”. This company had been selected in this report as a case example to underpin responsible decision making approaches in terms of organisational sustainability agenda. Considering the analysis part, CSR and sustainability approaches, financial performance and corporate governance were measured to develop an organisational sustainable agenda and execution process.

Evaluation of McDonald’s Sustainability

The process of innovation for sustainable development and adaptation has received three important aspects such as uncertainty, complexity and dynamism. Silvestre and Ţîrcă (2019) suggested introducing sustainability in business processes helps to tackle best practices of innovation-oriented approaches to resolve current challenges in business performance management. “The Triple Bottom Line Theory” would be used in this scenario to analyse sustainability practices and development of McDonald’s in the concerned business domain.

Figure 1: Triple Bottom Line Theory

(Source: Inspired by Khan et al. 2021)

Incorporation of “Triple Bottom Line Theory” posits firm capabilities towards committing social and environmental impacts. Khan et al. (2021) stated that in the era of industrial evaluation demands systematic ways of sustainable development, consideration of “People, Planet and Profit” in business processes fosters aspects of the circular economic landscape. It has been observed that McDonald’s provides safe, inclusive and empowering opportunities to existing workforces for serving a bright future across the business (CORPORATE.MCDONALDS, 2021). In 2020, over 37% of women in McDonald’s associated with leadership roles and maintained greater visibility of underrepresented groups of people within the workplace. McDonald’s initiated over 40000 apprenticeships by 2025 on basis of “European Alliance for Apprenticeships” to promote and improve access to vocational training for young people (CORPORATE.MCDONALDS, 2021). Therefore, taking care of employees by providing inclusive fund had a positive influence on management of employee development aspects in this company.

Figure 2: Recycling of cooking oil and reduce waste of oil

(Source: LIVEMINT, 2020)

Incorporating “Triple Bottom Line Theory” attributes of “Profit and environment” has been analysed representing sustainability approaches of McDonald’s. Introducing recycled based approaches of waste oil after frying chips for lorry petrol signifies aspects of sustainability approaches of McDonald’s. Promotion of waste petrol in lorries, McDonald’s invested additional US $ 10 million as next generation consortium to improve environmental sustainability standards within foodservice industrial domain (PACKAGINGINSIGHTS, 2021). Owing to these sustainability approaches, this company developed franchises with “Hardcastle Restaurant Pvt Ltd” generating 750,000 litres of used cooking oil every month from frying across the 270 restaurants (LIVEMINT, 2020). Introducing these approaches provide positive influences on disposal of waste oil and developed piloted conversion of used oil into bio-diesel.

Insufficient balance between people and profit disrupted the process of implementing sustainability approaches within the business process. However, it has been contradicted that imbalance of people and profit attributed, McDonald’s was witnessing potential issues of suppressing prices of beef, chicken and eggs to the suppliers. Due to soaring prices in raw material, Mcdoland’s failed to maintain fair payments to suppliers which increased supply of raw materials in in-store operations (TIMESOFINDIA.INDIATIMES, 2019). Uncertainties in management of supplier’s payment and supply chain operations had a bad impact on customer confidences and engagement process and sudden closure of outlets.

Analysis of McDonald’s CSR

CSR is becoming an integral strategic approach for companies mediating the role of CSR authenticity to manage relationships between CSR activities and key customer responses. As per views of Afzali and Kim (2021), development of authenticity in CSR activities by organisations helps to maintain marketing of brand, organisational resources, capabilities and leadership practices. “Stakeholder Theory” would be incorporated in this scenario to analyse supporting approaches of McDonald’s for long-term perspectives.

Figure 3: Stakeholder Theory

(Source: Inspired by Bermanand Johnson-Cramer, 2019)

CSR activities have been managed by business organisations to integrate inclusive corporate culture and effective aspects of corporate performance reviews. Bermanand Johnson-Cramer (2019) suggested integration of social, economic and environmental dimensions of business helps to develop operational activities. Based on context of community engagement or supporting sports events, McDonald’s offered extended support of grassroots football until 2022 to provide a chance for over 5000k children in UK. This commitment imposed by McDonald’s assisted renewal of partnership with FA for four years (THEFA, 2018). In this regard, thousands of grassroots clubs in UK get benefited from extensive support of McDonald’s incorporating national sports events.

In terms of analysing aspects of CSR activities adopted by McDonald’s towards taking care of community or residents, this company celebrates healthcare workers with free “Thank You Meal” (PRNEWSWIRE, 2020). This contribution of McDonald’s during the pandemic situation positively influenced engagement of healthcare workers towards both in the company and workplace including their duties. Apart from this, during the pandemic situation, majority of US restaurant chains faced higher expenses in availability of ingredients and higher labour management. Under these consequences, McDonald’s reported comparatively higher sales of $22.93 billion in 2022 which helps to maintain steady online demands and higher prices of products (RETAIL.ECONOMICTIMES, 2022). Ensuring aspects of fast food delivery approaches for customers assisted McDonald’s to maintain an operative environment across competitive landscape and fulfil requirements of customers as well.

Despite well-documented CSR approaches of Mcdoland’s in current competitive landscape, McDonald’s was witnessing a chemical pollution crisis in process of food packaging. Over 70,000 people across UK have undertaken demanding actions on toxic trash and chemical pollution of McDonald’s (CORPORATE.MCDONALDS, 2020). “Learning Disabilities Association of America” had sent a letter to McDonald’s to reduce chemical waste in food packaging and take urgent actions for future generation communities. Waste generation of pollution in food packaging had disrupted the environmental responsibilities of McDonald’s. On the other hand, during management of internal stakeholders including employees, unfair payments of wages of employees increased occurrences of employee retention in business process. In this regard, McDonald’s over 10000 new employees in US raised their concern regarding increasing hourly wages between $11 to $15 (QUARTZ, 2021). Lower washes workers or employees in US had undertaken action on increased payment processes.

Evaluation of Corporate Governance

In terms of analysing agent issues faced by McDonald’s in management of corporate governance, an Italian antitrust probe investigated violation of agreements with franchise operators. According to a report of the Italian authority of AGCM, McDonald’s fast food chain was at risk of a fine of 10% in context of global turnover due to breaching Italian antitrust rules by McDonald’s (REUTERS, 2021). Due to lack of availability of information in franchise management and operation processes by this company, the overall relationship of economic dependence between stores operators and McDonald’s had been disrupted. On the other hand, constitute abuse of economic dependence by McDonald’s increased consequences of prices, promotions and financial management within business conduction. Poltarykhin et al. (2020) stated that violation of antitrust laws by business organisations from, abusing economic dependencies imposed unjustified burden along with discriminatory contractual conditions within the business domain. Further, it was found that three operators of McDonald’s complaint in March determined violation of investment process and sales policies within the industrial domain.

In terms of analysing well-documented corporate governance, McDonald’s imposed certain correctness of work and managed aspects of Italian antitrust violence. Reducing potential risk redundancies in supply chain operations McDonald’s involved in opening collaborating approaches with agencies to manage annual sales volume. Collaboration assisted this company to increase $19.2 billion in revenues by the financial year of 2020 (REUTERS, 2021). In this regard, overall elements of abuse documents and aspects of discriminatory actions or conditions are measured by this company and reduce consequences of agent related problems in business process.

Financial Performance

Figure 4: Global Revenue of McDonald’s

(Source: Statista, 2022)

Obtained from the global reach, a high revenue and large number of units, McDonald’s has been placed in the Forbes top 100 largest global companies of 2022 on grounds of market capitalization. As of 2021, US accounted for a rough count of $8.7 billion as of revenue while international markets like France, Canada, Australia, and UK accounted for the largest overall contribution (Statista, 2022). This is subject to their total contribution accounting for $12.09 billion and an overall revenue of McDonald’s being subject to reaching $23.22 billion in 2021. A significant financial performance of the brand makes McDonald’s as one of the most valuable global fast food brands followed by an estimated brand value of approximately $154.9 billion (Statista, 2022). Its significant financial performance had also leveraged scope for this company to generate about $40.5 billion in 2020 and substantially higher than its closest rival, Starbucks.

Figure 5: Brand Value of McDonald’s

(Source: Statista, 2022)

Besides having a substantially high brand value, it is also attributed as a quick service restaurant with a large margin in 2021. This is accompanied by McDonald’s global operating cost of about $10.36 billion along with $7.55 million as global net income and $459.9 million as global advertising costs (Statista, 2022). It is also identified that as of 2021, global comparable sales for McDonald’s increased by 17% owing to strong sales performance concerning all segments. Comparable sales concerning US market increased by 13.8% while that of the International operated segments witnessed a rise by 21.6% (MCDONALDS, 2022). Furthermore, comparable sales relevant to the international development licensed segments observed a spike by 16.6% with consolidated revenues and systemwide sales both rising by 21%.

Conclusion

This above discussion provides detailed information regarding CSR, Sustainability, financial performance, and corporate governance activities of McDonald’s. Incorporating “Stakeholder Theory” assisted business organisations to develop approaches that facilitate engagement of customers, stakeholders and community accordingly. Aligning with this theoretical underpinning it has been concluded that both attributes of profit and people have been measured to analyse sustainability practices of McDonald’s. Subsequently, limitations in managing balance between profit and people in the business process affected implementation of CSR activities as well. Thus, it can be concluded that enforcing diversity, equity and inclusion attributes in business helped McDonald’s to gain potential progression by end of 2020.

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NX0474 Strategic Management for Competitive Advantage