Beruflich Dokumente
Kultur Dokumente
Qualification:
UNIT 20
Business Health Check (BHC)
Student No.
Assessor name:
Amerjit Walia
Date of Issue:
Completion date:
Submitted on:
27th March 2015
Learner declaration:
I certify that the work submitted for this assignment is my own and research sources are fully
acknowledged.
Student Signature:
Date:
Assignment Brief
Unit Number and title:
Qualification:
UNIT 20
Business Health Check
Pearson BTEC Level 4 HND Diploma in Hospitality Management
Start Date:
Deadline:
Assessor:
Amerjit Walia
Assignment title
2014 was a challenging year for McDonalds around the world. Our results declined as unforeseen events
and weak operating performance pressured results in each of our geographic segments, said McDonalds
President and Chief Executive Officer Don Thompson. "As we begin 2015, we are taking decisive action to
regain momentum in sales, guest counts and market share. This involves driving foundational improvements
in our major markets and continuing our recovery efforts in markets affected by unusual events. We are
accelerating our efforts behind solutions that capitalize on the investments were making in our technology
and our restaurants to bring McDonalds Experience of the Future to life for our customers and deliver on
our commitment to drive sustained, profitable growth for all stakeholders.
Full year results included:
Global comparable sales decrease of 1.0%, reflecting negative guest traffic in all major segments
Consolidated revenues decrease of 2% (flat in constant currencies)
Consolidated operating income decrease of 9% (8% in constant currencies), primarily due to the impact
of the previously disclosed supplier issue in APMEA (Asia/Pacific, Middle East and Africa) and weak
operating performance in the U.S.
Effective tax rate of 35.5%, primarily due to an increase in reserves related to certain foreign tax matters
Diluted earnings per share of $4.82, a decrease of 13% (11% in constant currencies). The following
items, which total $0.54 per share, negatively impacted diluted earnings per share by 10% (10% in
constant currencies) for the year:
$0.31 per share due to an increase in reserves related to certain foreign tax matters
$0.23 per share due to the estimated impact of the supplier issue resulting from lost sales and
profitability in APMEA
Excluding the impact of these items, earnings per share for the year would have been down 3% (1%
in constant currencies) compared to the prior year
Returned $6.4 billion to shareholders through dividends and share repurchases, in connection with our
$18-$20 billion, 3-year cash return target for the years 2014-2016
Fourth quarter results included:
Global comparable sales decrease of 0.9%, reflecting negative guest traffic in all major segments
Consolidated revenues decrease of 7% (1% in constant currencies)
Consolidated operating income decrease of 20% (15% in constant currencies), primarily due to weak
operating performance in the U.S. and the impact of the supplier issue in APMEA
Diluted earnings per share of $1.13, a decrease of 19% (14% in constant currencies), which includes a
negative impact of $0.09 per share due to the supplier issue in APMEA
Returned $1.8 billion to shareholders through dividends and share repurchases
In the U.S., fourth quarter comparable sales decreased 1.7% and operating income declined 15%, reflecting
negative guest traffic amid ongoing broad-based challenges, including sustained competitive activity. In
addition, results were impacted by higher selling, general and administrative and other expenses associated
with positioning the business for the future.
growth initiatives. These targets are designed to enhance long-term shareholder value while supporting the
work underway to reignite our business results, and we remain on track to meet these targets.
Bensen continued, As we begin 2015, were exercising further financial discipline - starting with a capital
expenditure plan for the year of approximately $2.0 billion - our lowest capital budget in more than 5 years as we're strategically targeting fewer openings in our most challenged markets. We believe this lower level
of capital spending is prudent while we work to regain our business momentum and improve the sales and
profitability at our more than 36,000 restaurants around the world.
Don Thompson concluded, Our business continues to face meaningful headwinds. As the worlds leading
food service organization, we will continue to evolve, focusing on the customer as our first priority. Over the
next 12 months, our charge is to ensure that we are adapting to the changing marketplace and maximizing
the potential of our global growth priorities to serve our customers favourite food and drink, create
memorable experiences, offer unparalleled convenience and become an even more trusted brand. While
January comparable sales are expected to be negative and results are expected to remain pressured,
particularly in the first half of the year, I am energized by the opportunities ahead for McDonalds and remain
confident that we can regain our momentum and build value for shareholders over the long term.
The Chipotle Strategy
McDonald's just expanded a test for burgers that are 100% customizable. The brand hopes the strategy,
which is currently in four restaurants in San Diego, California, could help attract a younger crowd and revive
lagging sales. Many analysts believe that the customization will soon become widespread at McDonald's and
allow it to better compete with fast-casual competitors like Chipotle.
Chipotle is largely successful because the ingredients for its burritos, bowls, tacos, and salads are entirely
selected by customers, who increasingly crave tailored options and high-quality ingredients.
Here are some drastic changes to the McDonald brand is making to improve business.
was sending corporate representatives in for a "service reset." This could include adding more workers and
assigning new tasks to existing ones. The company is retraining workers to improve customer service.
3. Revamping marketing.
Thompson is aware that many view McDonald's as unhealthy junk food. This problem has been exacerbated
by a food factory scandal in China. To improve public perception of the company, McDonald's is doing a global
audit of the marketing department. Thompson said he planned to make new internal hires. "We are also
strengthening our creative messages by placing greater emphasis on the quality of our food and again reestablishing the emotional connection that our customers associate with the McDonalds experience,"
Thompson said.
In his new role Fairhurst will be responsible for international Human Resources which includes Europe, Asia
Pacific Middle East and Africa (APMEA), and Latin America, as well as the global Human Resources functions
of Systems, Strategy and Design. He will continue to be based in London and will report to Rich Floersch,
Executive Vice President and Chief Human Resources Officer, McDonalds Corporation.
Floersch, said: With his strategic vision, passion for the business and his international experience, David will
be a valuable addition to our corporate team. His keen insights on development will benefit us greatly as we
continue to strengthen our talent pool to drive our business for the future.
Fairhurst joined McDonalds UK in 2005 as Vice President of People and was promoted to Chief People Officer,
Northern Europe, in 2007 with responsibility for HR, training, education, customer services and environment.
In 2011 he was appointed to the newly created position of Chief People Officer, Europe.
Doug Goare, President, McDonalds Europe, said:
David is a highly innovative leader who has made a significant impact on our business. He has led the creation
and implementation of a ground breaking People strategy that has played a critical role in driving our results
and building trust in our brand across Europe.
New CEO
28th January 2015 CNBC reported - Amid a tumultuous past year for McDonald's, the world's biggest
restaurant chain's CEO Don Thompson is retiring after two years on the job, effective March 1 2015. The fast
food is also getting a new CFO. The restaurant's Senior Executive Vice President and Chief Brand Officer Steve
Easterbrook will replace Thompson, who is a 25-year veteran of the company, the company announced on
Wednesday.
Previously, Easterbrook served as president of McDonald's Europe and led the chain's "efforts to elevate its
marketing, advance menu innovation, and create an infrastructure for its digital initiatives," it said in a release.
The company's CFO Pete Bensen will also transition to the role of chief administrative officer while Kevin Ozan,
the company's current corporate controller, will become the chain's new CFO.
On Friday, the company delivered its latest update on its continuing U.S. turnaround, ongoing problems in
Asia and the currency headwinds it faces.
Following the CEO departure news, the company's stock ticked up 3 percent. As McDonald's continues its
turnaround effort, Bill Smead, CEO and chief investment officer of Smead Capital Management, said he'd like
to see the company take more risks and focus more on what customers want. The firm is a long-term
shareholder in the company with about 180,000 shares.
"Trying to please everybody is one of the issues that they're dealing with," he said in a phone interview. He
also added he thinks the current low interest environment and McDonald's high dividend yield has kept
McDonald's stock higher than it typically would be. McDonald's stock is nearly flat during Thompson's tenure
as CEO, compared to a 33 percent surge in the Dow and a 47 percent jump in the S&P 500.
In fiscal year 2014, global comparable sales growth, a key restaurant industry metric, dropped 1 percent, and
its U.S. unit delivered a 2.1 percent decrease in comps. In fiscal year 2013, global comparable sales growth, a
key restaurant industry metric, rose just 0.2 percent.
TASK 1:
(a) Critically analyse and evaluate McDonalds business environment and its impact on the industry and
McDonalds business performance by applying:
PESTLE
PORTERs 5 Force Model
SWOT
(b) Outline potential areas for business improvement to the business organisation and its operations. You
should consider the current business situation of McDonalds finance, market share, trends in sales and
eating habits, etc.
(LO1, 1.1., 1.2, 1.3; M1, M2, M3, D1, D2, D3)
TASK 2:
(a) As a Business Development Consultant to McDonalds outline the steps you would take to carry out a
Business Health Check (BHC) on McDonalds (you may concentrate on one region or one branch of McDonalds
for the BHC);
(b) Based on your findings in (a) and the information the case study, provide a business Improvement Plan for
McDonalds.
(LO1, LO2, M1, M2, M3, D1, D2, D3)
(1000 words)
TASK 3:
You are the HR Consultant to the new Chief People Officer and he has asked you to provide an evaluation of
the current skills of management and staff an outline of a development plan.
Provide a short report on how you would evaluate the skills of management & staff in a Branch of McDonalds?
The report should provide justification for why management and staff should be developed and trained. You
should use your knowledge from the case study.
(LO3, M1, , M3, D1, D2, D3)
(700 Words)
Evidence
Checklist
Task 1
Task 2
Task 3
Summary of evidence
Evidence presented
Important
Plagiarism, collusion and non-compliance with assessment regulations are offences under the awarding
body regulations and where suspected will be thoroughly investigated under official procedures.
Penalties may be imposed depending on the severity of the offence, as per the awarding body
guidance.
Appropriate citations of source documents are essential when presenting written/word
processed work and it is crucial that you quote the books, journals, websites etc. that you
used whilst you carried out desk research.
Learning
Outcome
Learning
outcome
LO1
Understand
the focuses
of
the business
LO2
LO3
Be able to
develop
plans for
businesses
Be able to
evaluate and
develop skills
of
management
and staff
Assessment
criteria
Task
No.
Evidence
(Page no)
10
In addition to the above PASS criteria, this assignment gives you the opportunity to submit evidence in order to achieve the following MERIT and
DISTINCTION grades.
Grade Descriptor
Indicative characteristic/s
Contextualisation
Detailed tools & techniques have been applied and used for
critical analyses & evaluations:
11
D3 Demonstrate convergent/lateral
and creative thinking
12
Achievement Summary
Qualification
Unit Number
and title
Student Name
Criteria
Reference
LO1
1.1
1.2
1.3
LO2
2.1
2.2
LO3
3.1
3.2
Grade Descriptor
M3 Present and
communicate appropriate
findings
D3 Demonstrate
convergent/lateral and
creative thinking
Achieved?
(tick)
Achieved?
(tick)
13
Assignment Feedback
Formative Feedback: Assessor to Student
Action Plan
Summative feedback
14
Assessor
Signature
Date
Student
Signature
Date
15