Management

Management

Introduction

Today's business environment is turbulent and subject to unprecedented challenges due to rapid changes in the forces of external environment. Strategic management equips the organisations to take decisions that influence long-term activities of the organisation that facilitates attuning to the external changes. Environmental scan is a process that enables to plan the development strategies for a business plan.

Chosen Firm & Domain

Fast Food sector, one of the complex and unpredictable industries, is now playing a dominant role in the service economy. The fast food giant McDonald's has been chosen for applying an environmental scan. McDonald's, largest retailing chain has 31,377 restaurants across 118 countries including 1200 outlets in UK, employed 1.6million recorded $ 23 billion revenue. McDonald's developed many successful products such as hamburgers, chicken sandwiches, French fries, Happy Meal, Big Mac, Egg McMuffin and innovative products like McSalads, chicken McNuggets & McLean Deluxe Sandwich etc and follows value strategy for keeping the prices relatively low (McDonald's Annual report-2007) .

However, after 2001 the company lost its reputation and became identified with poor quality and service. The failure of new product launches, tough competition from rivals Burger King, KFC, YUM, Taco Bell & Wendy' and strained relations with franchise operators, resulted in the record of its first quarterly loss in 2003. (McDonald's Annual report-2005)

Environmental Scanning

Environmental scanning (ES) refers to collection, analysis and evaluation of data using the information about the organisation, happenings of the field, trends, and interactions in an organisation's external environment for designing the future plans (Aguilar, 1967, Choo & Auster, 1993 as cited by Chun Wei Choo, 1995, Saskachewan Finance, 2006).

There are two major categories of environments that influence the organisations. The broad environment or remote environment constitutes the firm, its industry, and other external stakeholders and their components include political, economic, social and technological and ecological, which are mostly beyond the control of the organisations. While the task environment refers to the firm and its external stakeholders like customers and suppliers, with whom the firm deals regularly (Harrison, Jeffrey S, 2003). The Task environment can be subdivided into Industry environment, Firm environment and Functional Environment (Olsen et al, 1998). Environmental scan takes place in two phases.

Phase 1

In the First phase necessary preparations are made for a workshop like identification of stakeholders, analysis of the available information, possible questions, selection of methods of stimulating the discussion, moderator selection, training of participants etc. The Environmental scan begins with the collection of relevant data from internal and external sources and to share the data with the participants.

Phase 2

ES is applied through workshops and different steps for identification of issues, gaps and suggestions.

Step-1

McDonald's mission will be analysed, which is to become worlds best fast food restaurant with service, quality, value and cleanliness to make all customers happy. The goals are set in tune with the mission.

Step-2

Remote environment is scanned, while identifying the external stakeholders and their analysis using PESTE analysis.

PESTE analysis

Political stability and continuity of policies would boost the economy. The tax structure, environmental laws, employee laws, sexual discrimination act, Health and safety ...