QUESTION

STAFFORDSHIRE UNIVERSITY
Business School
APIIT Kuala Lumpur

Module Code:

Module Title:

Site:

Module Leader

Managers, Information and E-Business
Kuala Lumpur
M Ash / Aw Yoke Cheng

Assessment Type: Written Assignment

Assignment Title: Information and knowledge underpinning of
strategy and e commerce planning

Weighting:

Written by:

Moderated by:

100%
Malcolm Ash / Aw Yoke Cheng
External:
Additional Attachment:
1. How to Cite References using the Harvard
Date of Issue:

Submission Date:

System.  See hyperlink

April 2009

Assignment must be submitted by the due date. The only circumstances in which
the assignment can be submitted late are if an extenuating circumstances form is
submitted at the same time. In these circumstances work may be submitted up to
10 (ten) days late only. If extenuating circumstances are upheld, the assignment
will be graded; otherwise a ‘0’ will be awarded.

Maximum word length: 2,000 words

Ethics disclaimer:
We confirm that the University’s guidelines for ethical approval have been
consulted and that all ethical issues and implications in relations to the above
assignment have been considered. We confirm that ethical approval need not be
sought.

Semester March 2012
APIIT UCTI Kuala Lumpur

Managers, Information and E-Business
Individual assignment: One written report (100%)

Examiner: Aw Yoke Cheng

Hand out date:  April  2012

Hand in date: by ………….

Assignment brief

Success is derived by leveraging the potential of online information networks
and new media interfaces – value is often derived from knowledge
management, or the gathering, synthesizing, and use of information to enable
competitive advantage

Based around a company of your choice and with reference to appropriate
academic theory and identified examples of best practice application, show
how leverage of information and application of knowledge can lead to
achievement of strategic goals.

Your solution should be framed within the context of the development of a
business strategy and plan for the company.  That plan should cover the key
stages below.  At each stage you should identify the information and
knowledge needs of the company and show how such information is used to
develop an applied, critically analysed and justified solution to the particular
situation of the company and any strategic or tactical goals you have
assumed.

1. identifying and framing the opportunity
2. strategic and business model choices
3. customer interface model
4. traffic generation
5. metrics and control

Learning Outcomes:

This assessment is designed to assess the student’s ability to meet
the following LO’s:

a) Demonstrate a critical view on the role of information in management and
business
b) Identify and justify competitive advantage solutions
c) Demonstrate a critical view on emerging e-business solutions

Report Guidelines:

The written report must be compiled in a suitable format that must
incorporate the following:

 A clear and concise outline of the practical strategic information
issues involved;
 Generation of analysis and solutions that draw upon both
theoretical and practical aspects;
 Use of appropriate terminology that will indicate a thorough
understanding of information, strategy and application of e
commerce  principles;
 Suitable referencing of the materials used to support arguments
put forward that will indicate competence in the academic issues
discussed;
 Evidence to suggest an in-depth understanding of the information,
marketing and strategic e commerce  concepts being reviewed
and their practical applications to the case involved
 Written content and structure that will demonstrate practical
benefits being derived from the module, reading lists and research
required for the assignment;
 A wide range of sources used or cited (a minimum of 5) and they
should be current (not before 1999 onwards).
 Full referencing of material and sources cited that incorporate the
Harvard Referencing System (see ‘How to Cite References using
the Harvard System’ attached).

Assessment requirements:

You should produce a written report of approximately 2,000 words
which comprehensively addresses the case study questions. One
paper copy of the report is required. IN ADDITION the work should
be supplied on a CD.

Please state the number of words used at the end of the assignment.
You may include diagrams, figures and appendices without including
in the word count.  A sliding scale of penalties for excess length will
be imposed as follows:
Up to 10% excess no penalty
11-20% excess -5% penalty
21-30% excess -10% penalty
31% + excess -cannot achieve more than 50%

Assessment Guidelines

Level M modules require that work carried out will incorporate most of
the following features:

Fail:
 The assignment will lack the structure, content and use of
appropriate terminology that would be expected from a student able
to conduct a disciplined analysis of strategic information and e
commerce issues.
 Recommendations and conclusions will not be justified and may be
inappropriate and there will be little or no evidence that any critical
evaluation of a range of ideas has been undertaken.
 Reflection will be subjective or descriptive.
 The plan will not balance academic theory and the practical
application of such to the specific research issue and will give little
thought to resources available.
 The plan will provide little, if any, evidence of the student having
“read around” the subject matter.  As such the report will contain
few, if any, academic references or, if they do, sources are unlikely
to be consistently and/or accurately cited and referenced using
Harvard Referencing System.
 The plan may be inconsistent in approach as well as content –
sometimes minor areas, or inappropriate theories, might be
discussed at length while relevant theories are omitted all together.
It may not be clear which theoretical area or practical problem the
student is critically analysing in the report
 Any conclusions to resolve the practical problem discussed will
probably not result from a disciplined analysis of the marketing
problem or a critical evaluation of a range of theoretical strategic
options available to the organisation.

Pass:
 Sufficient issues are addressed in order to distinguish between the
rote learning student and those students with the ability to generate
a required level of independent thought processes. Use of structure
and terminology that shows an ability to undertake disciplined
analysis of the issues presented.
 Content indicates an ability to analyse and make logical conclusions
regarding the strategic marketing issues that encompass both
practical and theoretical elements.
 Evidence that the theory behind the practical application of
knowledge management techniques and strategic e commerce
concepts is understood although some aspects of the analysis may
be more or less extensive indicating a less insightful critique.
 Evidence that some contemporary sources have been used
although some of the referencing may be more dated, limited or
unrelated.
 A grasp of the requirements necessary to conduct an analysis of
informational and e commerce strategic  issues
 The work will demonstrate an understanding of the role and value of
contemporary e commerce issues and demonstrate an appreciation
of the various implications of marketing plan decisions
 .Resource implications of strategy and plan recommendations will
be recognised as realistic within the scale of the various resources
of the company

Merit:
As for the pass criteria the report will also encompass the following

 Clearly demonstrates thought processes that are independent
and consistent and a good level of understanding shown.
 Structure and content is well rounded with practical and
theoretical aspects being considered.
 Strong evidence of having read around the chosen topic with a
range of referencing showing key contemporary theories
relevant to the work.
 Clearly stated and realistic research objectives and arguments.
 Higher level of critical evaluation demonstrated. Appropriate
recommendations are well justified using relevant sources.
 Resource implications of suggestions is recognised and a clear
effort is made to maximise the effectiveness of resource
utilisation

Distinction:
Apart from the attributes of a MERIT report, these reports will
need to encompass the following:

 Strong evidence of having read extensively around the chosen topic
with extensive referencing of the key theories and arguments
proposed and which encompasses the creative application of
academic knowledge in such a way that it might lead to the
extension of such academic knowledge.
 Consistency in the arguments used to evaluate and critically
analyse the theories reviewed as well as in the utilisation of basic
analytical tools.
 A substantial level of critical evaluation demonstrated. Appropriate
recommendations are strongly justified using relevant sources.
 The theoretical concepts utilised are more extensive than that of a
MERIT paper, but which clearly and methodically stays focused on
the issues at hand.
 Clearly demonstrates thought processes that are independent and
consistent with a  high level of understanding shown
 Structure and content is well structured with practical and theoretical
aspects being used in a sophisticated manner and integrated to
underpin analysis and develop solutions
 Proposals will be based on rigorous and identification of important
evidence and will convincingly explain and justify proposed
solutions

Plagiarism:

Contrary to popular student belief, getting caught and being punished
for committing plagiarism is not an uncommon occurrence. It is
strongly recommended that students read the full document on
plagiarism rule.
http://www.staffs.ac.uk/images/academic_dishonesty_tcm6812681.pdf

Summarised

below are some of the key points.  You will have
committed plagiarism and may be caught, reported and punished (as
described below) if you:
 Copy from the work of others (from sources such as books,
magazines, journals and websites for example) and submit the
work as your own.  NB. It is acceptable to refer to the work of
others as long as you do not use too much, and reference your
sources properly.
 copy another student’s work and submit it for assessment
under your own name
 allow another student to copy your work and they then submit
it for assessment under their name

The last item is of particular importance, as few students seem to
understand what it means.  You should be aware that if, for example,
you allow another student to borrow your work and they subsequently
copy some of that work and present it as their own, you and they will
both be punished, even though they copied your work.

What happens if you get caught?  Examination boards may punish
offending students in a number of ways.  Typically, punishments
range from reducing grades, making students re-sit modules, through
to failing students on a module or an entire award.

The University regards this form of cheating as a serious
offence.  Please consider yourself warned!
SOLUTION

Introduction

Identified examples of best practice application to show how leveraging of information and application of knowledge will lead to achievement of strategic goals.

The ever flourishing business of McDonald’s started in 1940 with a restaurant opened by the two brothers Richard and Maurice McDonald in California. The Golden arched restaurant corporation is dates back to its founding in 1955 when the first franchised restaurant was opened by Ray Kroc (Kroc and Anderson, 1977). Now presently McDonald’s stands tall as a typical symbol of globalisation with its ever expanding network. It is disseminating the true American way of living with a wide span in around 119 countries worldwide (McDonald’s Corporation, 2009).

Around 15% of McDonald’s Restaurants are being owned and operated by McDonald’s Corporation on their own and it earns most of the revenue through investment in properties, an operator of restaurants and as a franchiser in restaurants.

The Mission of McDonald’s Corporation is to become the world’s best quick service restaurant with great experience by providing outstanding quality, cleanliness, value and service, so that every customer who visits McDonald’s restaurant gets a smile on his/her face.

This is the reason why there are 1.5 million employees worldwide employed by McDonald’s and  it has become the largest fast food restaurants chain all across the globe serving 47 million customers on everyday basis with more than 31,000 restaurant chains worldwide (Love, 1995).

Academic Theory for Strategic Planning

Strategic Planning helps in determining the scope and direction of any organisation in the long term. It does so by developing a perfect match between the resources and the changing environment and mainly matching with its markets, clients and customers so that eth expectations of all the stakeholders could be met (Schmidt, Enock and Laycock, 2009).

The theory of Strategic Planning which would be of great help is Theory of Change (Weiss, 1995) which describes a set of assumptions which covers the smaller steps which could be taken for achieving long term goals as desired by any organisation and it also explains the connection between the program activities and the respective outputs which are achieved from each ministep.

Michael Porter’, a modern day strategist researched organisational and governmental competitiveness along with competence and has written many books on business strategy. He developed many popularly used tools and techniques for strategic Planning and the two most famous ones are (Witzel, 2003):

• Porter’s Five Forces
• Value Chain

The Five Forces Analysis of McDonalds (MCD)

• Threat Of Competition : HIGH

Although there are large number of fast-food restaurants, MCD is by far the largest one. The main competitors are the large corporation which operate in multiple branches and brands. These large firms are able to support their business because of high level of marketing.

Amongst all these the ready-to-eat sandwich market is the biggest threat and covers one-third market. Followed by the burger market which is predominantly covered by McDonalds and Burger King as 91% market share. The competitive advantage McDonalds has is product differentiation and that is why it achieves cost benefit. The location of fast food outlets, which is the key success factor for McDonalds too and pushes it ahead in the race (Hahnfeld, 2010).

• Threat Of New Entrants: HIGH

The main barrier for entering fast food market is authority’s regulatory norms that specific number of outlets of specific type can be opened in a particular geographic area. Moreover the new entrants also get limited because they do not get cost advantage in short term and moreover the loyalty of consumer is also low towards new entrants. Since accessing the market is easy, so the fast food new entrants offer their potential customers new offerings. They also face difficulty in getting space in prime locations on high streets. So the new entrants are major threat not for MCD as it has extensive marketing support (Hahnfeld, 2010).

• Threat of Substitutes: LOW-MODERATE

There are external competitors also for this industry, not just the strong competition within the fast food industry but they have to face competition from other food service providers too. The full service restaurants, per-prepared foods found in supermarkets and caterers are also trying to create a fair share in household expenditure of families on meals (Hahnfeld, 2010).

• Power of Suppliers :LOW

In terms of system wide sales McDonalds occupies the topmost position as largest restaurant chain as it has tremendous economies of scale as compared to its peers in quick-service restaurants. That is the reason why MCD can apply great amount of pressure regarding bargaining power on its suppliers, where many of the suppliers owe their very existence in the market due to MCD. Thus MCD enjoys the benefit of accessing the raw materials and food at very competitive and predictable prices (Hahnfeld, 2010).

• Power of Buyers: LOW

The power exercised by the buyers in fast food industry is very low.

Business Strategy and plan for the company

The Win Strategy which has a multifaceted approach has been adopted by McDonald’s in order to enhance its sales and profitability at various or most of the existing locations. The main tenets of the MCD’s plan include:

• Increasing menu variety
• Adding more beverage choices
• Adding convince
• Extending the working hours
• Improving the restaurants operations
• Maintenance of everyday affordability
• Continuous restaurant investment

The financial objectives which MCD is planning to achieve are annual growth of system wide sales by 3%- 5% along with increase in average annual operating income growth by 6%-7%. It also targets annual returns on incremented invested capital done on the higher teens.

Identifying and framing the opportunity

The main opportunity which has been identified by McDonalds is to find a perfect pair for its new Frozen Strawberry Lemonade Drink in order to promote it just like hamburgers is a perfect pair with French fries. The perfect application of leveraging online information networks and new media interfaces can be seen in this opportunity identification (Baar, 2012).

This has been done by McDonalds using the best social media platform that is TWITTER. Using its knowledge base and leveraging the online information network McDonalds has asked its tweeters to come together and they need to describe in just 140 characters or less the perfect pair and why New Frozen Strawberry lemonade would be a perfect pair with their choice.

The winning combination will get $5000 in cash and $5000 in the form of vacationing vouchers, so total $10,000 at stake, but this is the best way to utilise the online information network and leverage knowledge management before bringing any new product into the market. This way McDonald should be able to know the real time choice and unique aspects of the perfect pair from the horse’s mouth that is eth customer themselves.

This way McDonalds is continuously looking for the best ways in which they can use social media to enhance their new campaign and extend it to larger number of audience. This way the new creative aspect would be explored.

 Strategic and business model choices

The rational System strategies which are applied to every aspect of business which has made it a metaphor which stands for a powerful and glamorous organisation which is quoted for mass producing success as  it does mass–production of hamburgers (Marks and Mirvis, 2001). The reason why it is exemplified for its success because of its simplistic strategic as well as managerial practices it follows (Calori and Dufour, 1995) which are mainly based on cookie-cutter approach  (Hallowell, Bowen and Knoop, 2002).

The global strategy adopted by McDonalds is based typically on cookie-cutter approach only (Beam, 2002) (Gupta and Govindarajan, 2001). The priorities which have been set by McDonalds for achieving sustainable success can be seen from following figure:

Figure 1: McDonald’s Priorities

Business Model of McDonald’s

The most critical factor contributing towards eth success of McDonalds is the strength of being aligned which has been demonstrated by its employees, suppliers, franchisees and the Company at large. The business model which is being followed by McDonalds is depicted below in Figure 2. This model has been consistent in providing the customers of McDonalds a locally-relevant experience and thus helps it to become an integral part of the community which the company is serving. The main three legs of Business model followed by MCD are:

• Franchisees:  They are the owner and operate most of the MCD restaurants all across the world.
• Suppliers:  they are the people who provide resources and raw materials for food and packaging to the company.
•  Company Employees:  They are the main supporters and help in delivering and managing the restaurant operation all across the globe.

Figure 2: Business Model “Three-legged Model” followed at McDonalds

Customer Interface Model

Customer Interface technologies or model are becoming universally acceptable. But McDonalds does not have such information oriented or knowledge based customer interface model utilising the latest information technology or online networks. Toady also McDonalds either takes order by placing a call over the phone or by verbally placing the order in the fast food restaurant by being present there.

McDrive is one of the fast-food restaurants where in order to reduce the human cost because the human power is very expensive. the company wants to use and build a system where the operators can be re[placed by this system in McDrive so that this system can efficiently take orders from the customers.

The new automated system will be based on speech recognition technology so that it can communicate with the customers. It will talk to the customers, it would be able to understand what the customer wants to say and will give back the correct and desired response. The system will not just give audio but also visual feedback in the graphic or textual; form (Pang, 2002).

Thus this kind of customer interface which will leverage the online information can be used to place online orders too by the customers, and usage of knowledge management along with information technology. This will not just be helpful in achieving the strategic goal of reducing the human or manpower cost but will also maintain the service level as desired by the customers (Pang, 2002).

 Traffic Generation

It has been found that with the mobile technology becoming more robust a pervasive the social networking leveraging will become an essential part of strategic planning for fast-food restaurant chains like McDonalds (Melnick, 2011). The web presence to attract or generate traffic for the website of McDonalds is not enough now the social networking sites which are very popular also need to attract traffic and generate more customers for McDonalds to become successful in coming years.

The so called “fans” and “followers” should now get converted into regular and loyal customers using and leveraging the social online networks of social media like Twitter and Face book. Rather these can be converted into real-time “brand ambassadors” for the company to achieve and enhance their strategic goals in near future.

Revolutionised advertising is being brought into the social networking by incorporating brands in the popular social networking games like Farmville and Mafia Wars. McDonalds need to leverage its social networking and capitalise using these kind of revolutionised marketing to achieve their strategic and business goals.

The time is right now to develop a new kind of integrated advertising by inculcating the social networks and media in order to attract greater number of traffic and converting them to real customers for long term (Melnick, 2011).

Metrics and Control

Since the customers are the valuable asset for McDonalds so safety and well-being of the customers so the company maintains rigorous and science based standards and does regular monitoring and evaluation in all the critical areas all across the food and toy supply chain of the company. It is being guaranteed that the food suppliers have the food safety and management system intact which covers the sanitation programs, good manufacturing practices and hazard analysis critical control point. It also implements crisis management along with food security programs which follow the metrics and control along with regular monitoring using the knowledge base and latest information technology.

Bibliography

Baar, A. (2012) McDonald’s Looks To Tweeters For Inspiration, 23 May, [Online], Available: http://www.scribd.com/doc/55382592/McDonald-s-Looks-To-Tweeters-For-Inspiration [24 May 2012].

Beam, H.H. (2002) ‘From global to metanational’, Academy of Management Executive, vol. 16, no. 2, pp. 173-4.

Calori, R. and Dufour, B. (1995) ‘Management European style,’, Academy of Management Executive, vol. 9, no. 3, pp. 61-72.

Gupta, A.K. and Govindarajan, V. (2001) ‘Converting global presence into global competitive advantage’, Academy of Management Executive, vol. 15, no. 2, pp. 45-59.

Hahnfeld, A. (2010) ‘McDonalds Corpoartion: ‘, M.J. Neeley School of Business, July, p. 18.

Hallowell, R., Bowen, D. and Knoop, C.-I. (2002) ‘Four Seasons goes to Paris’, Academy of Management Executive, vol. 16, no. 4, pp. 7-25.

Kroc, R. and Anderson, R. (1977) Grinding It Out: The Making of McDonald’s, Chicago: Regnery.

Love, J.F. (1995) McDonald’s: Behind the Arches., New York: Bentam.

Marks, M.L. and Mirvis, P.H. (2001) ‘Making mergers and acquisitions work: Strategic and psychological preparation’, Academy of Management Executive, vol. 15, no. 2.

McDonald’s Corporation (2009), [Online], Available: http://www.mcdonalds.at/presse/maps/McDCSR.pdf [24 May 2012].

Melnick, J. (2011) The 7 Trends of 2011, Janaury, [Online], Available: http://www.qsrmagazine.com/reports/7-trends-2011-0 [24 May 2012].

Pang, Y. (2002) ‘Multimodal McDrive System’, Delft University of Technology, The Netherlands Faculty of Information Technology and Systems, August.

Schmidt, J.C., Enock, K. and Laycock, M. (2009) Understanding the Theory and Process of Strategy Development: Theories of Strategic Planning, [Online], Available: http://www.healthknowledge.org.uk/public-health-textbook/organisation-management/5d-theory-process-strategy-development/strategic-planning [24 May 2012].

Weiss, C. (1995) New Approaches to Evaluating Comprehensive Community Initiatives.

Witzel, M. (2003) Finanacial times, 5 AUgust, p. 11.

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