Strategic Business Analysis Midterms

Republic of the Philippines
MARINDUQUE STATE COLLEGE

SCHOOL OF BUSINESS & MANAGEMENT
Main Campus: Boac / Branches: Santa Cruz • Torrijos • Gasan
Panfilo P. Manguera Sr. Rd., Tanza, Boac, Marinduque 4900
Tel. No.: (042) 332-2028 Email Address: [email protected]
Website: www.marinduquestatecollege.edu.ph
AE24- STRATEGIC BUSINESS ANALYSIS

MID-TERM EXAM
October 24, 2020
Part I: Case Analysis

McDonald’s Corporation
When most firms were struggling in 2008, McDonald’s increased its revenues from $22.7
billion in 2007 to $23.5 billion in 2008. Headquartered in Oak Brook, Illinois McDonald’s net
income nearly doubled during that time from $2.4 billion to $4.3 billion—quite impressive. Fortune
magazine in 2009 rated McDonald’s as their 16th “Most Admired Company in the World” in terms
of their management and performance.
McDonald’s added 650 new outlets in 2009 when many restaurants struggled to keep their
doors open. McDonald’s low prices and expanded menu items have attracted millions of new
customers away from sit-down chains and independent eateries. Jim Skinner, CEO of McDonald’s,
says, “We do so well because our strategies have been so well planned out.” McDonald’s served
about 60 million customers every day in 2009, 2 million more than in 2008. Nearly 80 percent of
McDonald’s are run by franchisees (or affiliates).
McDonald’s in 2009 spent $2.1 billion to remodel many of its 32,000 restaurants and build
new ones at a more rapid pace than in recent years. This is in stark contrast to most restaurant
chains that are struggling to survive, laying off employees, closing restaurants, and reducing
expansion plans. McDonald's restaurants are in 120 countries. Going out to eat is one of the first
activities that customers cut in tough times. A rising U.S. dollar is another external factor that hurts
McDonald’s. An internal weakness of McDonald’s is that the firm now offers upscale coffee drinks
like lattes and cappuccinos in over 7,000 locations just as budget conscious consumers are cutting
back on such extravagances. About half of McDonald’s 31,000 locations are outside the United
States.
But McDonald’s top management team says everything the firm does is for the long term.
McDonald’s for several years referred to their strategic plan as “Plan to Win.” This strategy has been
to increase sales at existing locations by improving the menu, remodeling dining rooms, extending
hours, and adding snacks. The company has avoided deep price cuts on its menu items. McDonald’s
was only one of three large U.S. firms that saw its stock price rise in 2008. The other two firms were
Wal-Mart and Family Dollar Stores.
Other strategies being pursued currently by McDonald’s include replacing gasoline-
powered cars with energy-efficient cars, lowering advertising rates, halting building new outlets on
street corners where nearby development shows signs of weakness, boosting the firm’s coffee
business, and improving the drive-through windows to increase sales and efficiency.
McDonald’s receives nearly two thirds of its revenues from outside the United States. The
company has 14,000 U.S. outlets and 18,000 outlets outside the United States. McDonald’s feeds 58
million customers every day. The company operates Hamburger University in suburban Chicago.
McDonald's reported that first quarter 2009 profits rose 4 percent and same-store sales rose 4.3
percent across the globe. Same-store sales in the second quarter of 2009 were up another 4.8
percent.
Questions (4pts. each):
1. Compare the strategy of McDonald’s Corporation to a military strategy.
2. Is it adequate for McDonald’s Corporation to simply obtain competitive advantage? Why?
3. How can McDonald’s Corporation best achieve sustained competitive advantage?
Vision: MSC – is a research - driven higher education institution pursuing excellence and innovation by 2025.
Mission: MSC – is committed to pursue progressive and innovative lifelong education founded on
humanistic, professional and technologically communities by establishing centers of excellence and development
and research – driven outreach programs..
”Serving Beyond Excellence”
4. In your opinion, what is the major benefit of using a strategic business analysis approach to
decision making?
5. List three financial and three non-financial benefits of a firm engaging in strategic planning.
Part II: Identification

1. It refers to an alternative plan that can be put into effect if certain key events do not occur
as expected.
2. The purpose of this stage is to identify, evaluate or prioritize a firm’s strengths and
weaknesses.
3. This stage includes developing a vision and mission, identifying an organization’s external
opportunities and threats, determining internal strengths and weaknesses, establishing
long-term objectives, generating alternative strategies, and choosing particular strategies to
pursue.
4. An internationalization theory which suggests that the idea of operating internationally
based on an advantage, where the same amount of resources lead to greater production of a
good or service than another one.
5. An internationalization theory which suggests that a company should internationalize
according to a network, where the forces of Porter’s model are already present.
6. April Jin Corporation, a company operating internationally, is adapting their products to the
local preferences. What kind of international strategy does the entity use?
7. It refers to offering, giving, receiving, or soliciting of any item of value to influence the
actions of an official or other person in discharge of a public or legal duty.
8. When a firm acquires control over another firm operating into the same value chain, it is
called ____________________________.
9. This level of strategy encompasses all the actions and approaches for competing against the
competitors and the ways management addresses various strategic issues.
10. It is considered as the riskiest type of diversification because it requires the company to
enter a new market and sell products or services to a new consumer base.
Part III: True of False
1. The final component of the strategic management process is crafting the organization’s
mission statement, which provides the framework or context within which strategies are
formulated.
2. Paying bribes is considered both illegal and unethical in all countries all over the world.
3. The need for the expansion through diversification arises when an organization has
explored all the potential to expand domestically and look for the expansion opportunities
beyond the national boundaries.
4. Research finds that strategic leaders who exhibit high degree of emotional intelligence tend
to be significantly less effective than those who are not.
5. Mission and vision can be used interchangeably.
6. The values of the company state how managers and employees should conduct themselves.
7. One of the factors that distinguish organizations in the non-profit sector from profit making
business is the lack for a need for strategic management.
8. To increase the shareholder value, managers must try to venture into new markets whether
the results are profitable or not.
9. Rules of thumb, or heuristics, always help to avoid systematic errors in decision making
process.
10. Competitive analysis that involves assessing the costs, benefits, and risks associated with
marketing decisions.
Part IV: Multiple Choice

1. Which of the following is not a tool for effective Strategic Analysis?
a. Welcome bad news and encourage devil’s advocate thinking.
b. Do not allow technicians to monopolize the planning process.
c. Keep the routine processes to encourage specialization.
d. Eliminate vague planning jargon.
2. A - One of the advantages of Globalization is that it serves major factor in the economic
squeeze on the middle class.
B - Born global concept states that due to increased information available, for any person or
organization, one can start from scratch anywhere without first needing to gather
information in a domestic market.
a. A is true and B is false
b. A is false and B is true
c. Both are true
d. Both are False
3. Which of the following statements is true about competitive advantage?

a. It is unaffected by the strategies taken by the company
b. It is considered to be sustained when it lasts for three months
c. It exists only when the company’s profitability is greater than the average profitability
and profit goals of its rivals
d. It is seldom affected by the business model of the company.
4. Tricia Ribleza works for Drew Corp. She is involved in all important decision-making
process of the company and is also responsible for the overall performance of the company.
In the context of strategic management, Ticia is most likely to be a ____________________.
a. General manager
b. Line manger
c. Production supervisor
d. Project Manager
5. Which of the following statements is true about non-profit organizations?

a. They seldom set any performance goals like profit-making organizations do.
b. They do not have to worry about exceeding budgets.
c. Their ultimate aim is to maximize shareholder value in order to attract risk capital.
d. They compete with each other for resources.
6. Which of the following is the organizations principal general manager?

a. Project Manager
b. Production Supervisor
c. Chief Executive officer
d. Sales Manager
7. The first component of strategic management process is:

a. Deciding on a fit between the organization’s strength and weaknesses and the
environment’s opportunities and threats.
b. Crafting the organization’s mission statement
c. Analyzing the macroenvironment
d. Analyzing the internal controls of the business
8. A company, at its inception, states that its goal is “to provide the best customer service
possible”. Which of the following best describes this objective?
a. The company’s marketing strategy
b. The company’s mission statement
c. The company’s vision statement
d. The company’s strategic plan
9. A component of strategy implementation is :

a. Eliminating the feedback loop.
b. Defining the goals and objectives of the organization.
c. Answering the question, “What is our business?”
d. Designing the best organization control system to put strategy into action
10. A - Workplace romance is always a question of whether to allow the practice, and or even
how to prevent it.
B - Companies shall not consider whistle blowing because this is unethical.
a. A is true and B is false
b. A is false and B is true
c. Both are true
d. Both are false
- End of Examination –
Hinga ka muna. 
Name: Mae Kristine L. Montaron

Section: BSAIS- 3A
Contact No: 0915-595-8661
E-mail Address: [email protected]
AE3 - REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

MID-TERM EXAM
Part I: Case Analysis

1. A
2. A
3. A
4. A
5. A
Part II: Identification

1. A
2. A
3. A
4. A
5. A
6. A
7. A
8. A
9. A
10. A
Part III: True or False

1. A
2. A
3. A
4. A
5. A
6. A
7. A
8. A
9. A
10. A
Part IV: Multiple Choice
1. 1.A

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Republic of the Philippines

MARINDUQUE STATE COLLEGE

AE24- STRATEGIC BUSINESS ANALYSIS

Part I: Case Analysis

Part II: Identification

Part III: True of False

Part IV: Multiple Choice

3. Which of the following statements is true about competitive advantage?

5. Which of the following statements is true about non-profit organizations?

6. Which of the following is the organizations principal general manager?

7. The first component of strategic management process is:

9. A component of strategy implementation is :

Name: Mae Kristine L. Montaron

AE3 - REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS

Part I: Case Analysis

Part II: Identification

Part III: True or False

Part IV: Multiple Choice

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