global strategic management plan
TRANSCRIPT
The Global Strategic Management
Plan:
Nike Inc., Levi Strauss & Co., and
McDonald’s Corporation
Herbert Thweatt, D.B.A.
Executive SummaryThe purpose of this presentation is to develop, analyze, evaluate,
and measure the Global Strategic Management Plan. Three Firms
founded in the United States of America (Nike Inc., Levi Strauss & Co.,
and McDonald’s Corporation) were researched and used as examples
of successful global strategic planners. The summary will examine
each step taken to complete this Global Strategic management Plan
Presentation.
The Need for a Global Management Plan
The need for a global management plan or global strategy is very real for the
most successful Firms. Global strategy is defined in business terms is an
organization's strategic guide to globalization. A sound global strategy should address
these questions: what must be (versus what is) the extent of market presence in the
world's major markets? How to build the necessary global presence? What must be
(versus what is) the optimal locations around the world for the various value chain
activities? How to run global presence into global competitive advantage?
Purpose and Scope of the Plan
The purpose and scope of global strategy or planning
is appropriate in industries where Firms are faced with
strong pressures for cost reduction but with weak
pressures for local responsiveness. Therefore, it allows
these firms to sell a standardized product worldwide.
Outline of Global Strategies
Global strategies or planning require Firms to tightly coordinate their
product and pricing strategies across international markets and locations, and
therefore Firms that pursue a global strategy are typically highly centralized.
Scope & Steps of the Global Strategic Planning Process:
Role of the Planning Consultant
Planning to Plan
Values Scan
Areas of Influence
Stakeholders
Role map - who does what, identifying influential relationships, both
formal and informal
Situation Analysis - identification of current issues
Environmental Monitoring - External
Competition Analysis
Internal Business Culture -- [Models of Business Culture]
Knowledge Analysis
Plan Development
Vision [ deeper understanding ]
Mission Formulation [ deeper understanding ]
Business Modeling
Strategy Development
Testing
Performance Audit
Gap Analysis
Implementation
Commitment to Change - Influence Plan
Balanced Scorecard - document and communicate: strategy, objectives and measures
Measure results
Plan Maintenance
Feedback System - take corrective action as needed; loop back to previous steps as required
Ever important in global strategy are the “Four P’s” of marketing:
product, price, placement, and promotion are all affected as a company
moves through the five evolutionary phases to become a global
company. Ultimately, at the global marketing level, a company trying to
speak with one voice is faced with many challenges when creating a
worldwide marketing plan. Unless a company holds the same position
against its competition in all markets (market leader, low cost, etc.) it is
impossible to launch identical marketing plans worldwide.
Situation Analysis: Nike Inc. and Strategic Opportunities
Nike, Inc. is a major publicly traded sportswear and equipment
supplier based in the United States. The Company has found
strategic global opportunity by doing the right thing
environmentally and socially. This analysis will examine the
company behind the Swoosh as they “Just Do It” with management
strategies that identifies opportunities, addresses threats, and
analyzes and takes on industry competition.
Throughout the 1980s, Nike expanded its product line to include
many other sports and regions throughout the world. Nike is the
world's leading supplier of athletic shoes and apparel and a major
manufacturer of sports equipment with revenue in excess of US$18.6
billion in its fiscal year 2008 (ending May 31, 2008). As of 2008, it
employed more than 30,000 people worldwide. Nike and Precision
Castparts are the only Fortune 500 companies headquartered in the
state of Oregon, according to The Oregonian.
Nike is also the official kit sponsor for the Indian
cricket team for 5 years, from 2006 till end of 2010. Nike beat Adidas
and Puma by bidding highest (US$43 Million total). Nike also
sponsors some of the leading clubs in world football, such as the
Brazil National Team, Portugal National Team, Netherlands National
Team, US National Team, Manchester United, Arsenal, FC Barcelona,
Dan Wieden, Juventus Shakhtar, Porto, Steaua, Red Star, Boca Juniors,
Corinthians, Club América, Aston Villa, Celtic and PSV Eindhoven.
Nike also sponsored Dundee United summer 2009 and several of the
world's top golf players, including Tiger Woods, Trevor Immelman and Paul
Casey. Nike also sponsors various minor events including Hoop It Up (high
school basketball) and The Golden West Invitational (high school track and
field). Nike uses web sites as a promotional tool to cover these events.
Nike also has several websites for individual sports, including
nikebasketball.com, nikefootball.com, and nikerunning.com.
Problem IdentificationNike is a large participant in manufacturing and many of its processes
negatively contribute to the environment. The ways that Nike’s industry
affects the environment is by contributing to water pollution, climate change,
the use of fossil fuel, and raw material consumption. In addition to this,
today's electronic textile plants spend significant amounts of energy while
also producing a throw-away mindset for consumers due to trends founded
upon fast fashion and cheap clothing. (“Emerging Textiles,” Retrieved 2010).
Complexities in Developing a Global Strategy
Nike’s management has developed a complex global strategy and tries to counteract
negative press and environmental controversy with different projects. According to
a New England-based environmental organization Clean Air-Cool Planet, Nike ranks
among the top 3 companies (out of 56) on a survey conducted about climate-
friendly companies. Zabarenko, D. (2007). Nike has also been praised for its Nike
Grind program (which closes the product lifecycle) by groups like Climate Counts.
In addition to this, one campaign that Nike began for Earth Day
2008 was a commercial that featured Steve Nash wearing Nike's Trash
Talk Shoe, a shoe that had been constructed in February 2008 from
pieces of leather and synthetic leather waste that derived from the
factory floor. The Trash Talk Shoe also featured a sole composed of
ground-up rubber from a shoe recycling program. Nike claims this is
the first performance basketball shoe that has
been created from manufacturing waste, but it only
produced 5,000 pairs for sale.
Another project Nike strategic management has begun is
called Nike's Reuse-A-Shoe program. This program, started in
1993, is Nike's longest-running program that benefits both the
environment and the community by collecting old athletic shoes
of any type in order to process and recycle them. The material
that is created from the recycled shoes is then used to help create
sports surfaces, such as basketball courts, running tracks,
and playgrounds. “Wicked Local,” (2010).
Developing a Global Management Plan: Levi Strauss & Company
In 1971, Levi Strauss & Co.'s long-standing status as a wholly family- and employee-owned
enterprise came to an end, when the company’s global management plan included selling stock to
the public for the first time. Denim jeans, Levi's in particular, had transcended the status of a mere
product to become a worldwide social and cultural phenomenon, and the company could no longer
raise enough capital privately to pay for needed expansion. The craze for jeans continued to grow,
with seemingly no end in sight. The company coped with a constant shortage of denim. Levi Strauss
& Co.'s existing, heavily centralized structure became inadequate, and operations were broken into
four divisions: jeans, Levi's for women, boys' wear, and men's sportswear.
The company's phenomenal growth caught up with it in 1973, when its
European division found itself with huge supplies of jeans in an outmoded style--
straight-legged, as opposed to flared, or bell-bottomed--with more of the same on
order. The problem was the culmination of years of under-management, and cost the
company $12 million as it tried to unload the overstock. For the first time since the
Depression, Levi Strauss & Co. announced a losing quarter and the company's stock
price fell dramatically. The following year, European operations were reorganized, and
the company moved its headquarters from the site it had occupied on Battery Street
for 108 years to new quarters. Seven years later, the company would move again to
Levi's Plaza, a newly built complex.
Major Global Strategies of the Levi Strauss Plan
Global strategies in the Levi Strauss plan require the Firm to tightly coordinate
product, pricing, placement, and promotion planning across international markets
and locations. Today, Levi Strauss & Co. is a global corporation with more than
10,500 employees. The Firm’s business is organized and deployed in three divisions
covering the Americas, Europe and Asia Pacific. Levi sells products in 110
countries, 55,000-plus retail locations and 1,500 brand-dedicated stores. The
following strategic locations are home to Levi Strauss internationally:
San Francisco — Corporate and Americas Division
Headquarters San Francisco is one of the United States’
most progressive and aesthetically pleasing cities, has been the
Firm’s home base since the company’s founding in 1853. It also
serves as headquarters for both the Americas Division,
which includes nearly 4,000 employees in Canada, the U.S.,
Mexico and Latin America, and retail, sourcing, and
manufacturing operations in 15 countries.
Brussels — Europe, Middle East and North Africa Division
Headquarters Recognized as Europe’s center of creativity,
originality, and design, Brussels is the site of the headquarters
for Levi Strauss Europe, Middle East and North Africa. This
division encompasses 3,500 employees, nine sales offices, six
distribution centers and three production
facilities. It markets and sells products in more
than 60 countries.
Singapore — Asia Pacific Division Headquarters Singapore,
renowned for its harmonious blend of culture, cuisine, arts and
architecture, is the site of Levi Strauss Asia Pacific Division
headquarters, established in 1995. The Company employs more than
4,500 people throughout the region, with offices in Australia, Hong
Kong, India, Indonesia, Japan, Korea, Malaysia, New
Zealand, Pakistan, the Philippines, South Africa,
Taiwan and Vietnam, in addition to Singapore.
(“Locations: Levi Strauss,” (2010)
Global management strategy includes brand strategy and
the introduction of the following new product and
marketing campaign:
dENiZEN™ was created by Levi Strauss & Co. as a global jeans
brand for a new generation. 137 years after outfitting the
American West with jeans that became the uniform of the
pioneering spirit, Levi Strauss & Co. is outfitting the new
global citizen for a bright future, supplying jeans and other
essentials for an on-the-go, engaged life.
dENiZEN™ means “inhabitant”: living in a place, living on earth, just being.
Denim is in the name, the heart of the brand. And dENiZEN™ has another
great meaning too: the idea of someone who frequents a particular place,
the idea of belonging to a community of friends and family.
dENIZEN™ takes this generation’s motivated and forward-thinking
mentality and combines it with Levi Strauss & Co.’s iconic jeans-making
heritage to make quality jeans that are fit for everybody.
dENiZEN™ are now available in China, Korea and Singapore.
(“Denizen,” 2010)
Global Management Plan Evaluation: McDonald’s Corporation
McDonald's Corporation is the world's largest chain of hamburger fast food restaurants,
serving more than 58 million customers daily. In addition to its signature restaurant chain,
McDonald’s Corporation held a minority interest in Pret A Manger until 2008, was a major
investor in the Chipotle Mexican Grill until 2006, and owned the restaurant chain Boston Market
until 2007.
McDonald's has become emblematic of globalization, sometimes referred to as the
"McDonaldization" of society. The Economist newspaper uses the "Big Mac Index": the
comparison of a Big Mac's cost in various world currencies can be used to informally judge these
currencies' purchasing power parity. Scandinavian countries lead the Big Mac Index with four of
the five most expensive Big Mac's. Norway has the most expensive Big Mac in the world as of July
2008, whilst the cheapest country is Malaysia.
McDonaldization is a term used by sociologist George Ritzer in his
book The McDonaldization of Society (1993). He explains it occurs when a
culture possesses the characteristics of a fast-food restaurant.
McDonaldization is a reconceptualization of rationalization, or moving
from traditional to rational modes of thought, and scientific management.
Where Max Weber used the model of the bureaucracy to represent the
direction of this changing society, Ritzer sees the fast-food restaurant as
having become a more representative contemporary paradigm. Ritzer
(2004. P. 553)
Four Primary Components of McDonaldization:
Efficiency – the optimal method for accomplishing a task. In this
context, Ritzer has a very specific meaning of "efficiency". Here,
the optimal method equates to the fastest method to get from
point A to point B. In the example of McDonald's customers, it is
the fastest way to get from being hungry to being full.
Efficiency in McDonaldization means that every aspect of the
organization is geared toward the minimization of time.
Calculability – objective should be quantifiable (e.g., sales) rather than
subjective (e.g., taste). McDonaldization developed the notion that
quantity equals quality, and that a large amount of product delivered to
the customer in a short amount of time is the same as a high quality
product. This allows people to quantify how much they're getting
versus how much they’re paying. Organizations want consumers to
believe that they are getting a large amount of product for not a lot of
money. Workers in these organizations are judged by how fast they are
instead of the quality of work they do.
Predictability – standardized and uniform services. "Predictability" means that no
matter where a person goes, they will receive the same service and receive the same
product every time when interacting with the McDonaldized organization. This also
applies to the workers in those organizations. Their tasks are highly repetitive, highly
routine, and predictable.
Control – standardized and uniform employees, replacement of human by non-human
technologies With these four processes, a strategy which is rational within a narrow
scope can lead to outcomes that are harmful or irrational. The process of
McDonaldization can be summarized as the way in which the principles of the fast-food
restaurant are coming to dominate more and more sectors of American society as well
as of the rest of the world.
SWOT AnalysisStrengths
McDonald’s is a global company operating more than 30,000 restaurants in 118
countries. By being spread out in different regions, this gives the Firm ability to
weather economic fluctuations which are localized by country. They can also
operate effectively in an economic downturn due to the social need to seek out
comfort foods.
They successfully and easily adapt their global
restaurants to appeal to the cultural differences. For
example, they serve lamb burgers in India and in the Middle East they provide
separate entrances for families and single women.
Approximately 85% of McDonald's restaurant businesses world-
wide are owned and operated by franchisees. All franchisees
are independent, full-time operators and McDonald's was
named Entrepreneur's number-one franchise in 1997. They
have global locations in all major airports, and cities, along the
highways, tourist locations, theme parks and inside Wal-Mart.
McDonalds only serves name brand processed items such
as Dannon Yogurt, Kraft Cheese, Nestle Chocolate, Dasani
Water, Newman's Own Salad Dressings, Heinz Ketchup,
and Minute Maid Juice.
Weaknesses
Their test marketing for pizza failed to yield a substantial product. Leaving
them much less able to compete with fast food pizza chains.
High employee turnover in their restaurants leads to more money being
spent on training.
They have yet to capitalize on the trend towards organic foods.
McDonald's have problems with fluctuations in operating and net profits
which ultimately impact investor relations. Operating profit was $3,984
million (2005) $4,433 million (2006) and $3,879 million (2007). Net profits
were $2,602 million (2005), $3,544 million (2006) and $2,395 million (2007).
Opportunities
In today's health conscious societies the introduction of a healthy
hamburger is a great opportunity. They would be the first QSR (Quick
Service Restaurant) to have FDA approval on marketing a low fat low calorie
hamburger with low calorie combo alternatives. Currently McDonald's and
its competition health choice items do not include hamburgers.
They have industrial, Formica restaurant settings; they could provide more
upscale restaurant settings, like the one they have in New York City on
Broadway, to appeal to a more upscale target market.
Provide optional allergen free food items, such as gluten free
and peanut free.
In 2008 the business directed efforts at the breakfast, chicken,
beverage and convenience categories. For example, hot
specialist coffees not only secure sales, but also mean that
restaurants get increasing numbers of customer visits. In 2009
McDonald's saw the full benefits of a venture into beverages.
Threats
McDonald’s is a benchmark for creating "cradle to grave"
marketing. They entice children as young as one year old into their
restaurants with special meals, toys, playgrounds and popular
movie character tie-ins. Children grow up eating and enjoying
McDonalds and then continue into adulthood. They have been
criticized by many parent advocate groups for their marketing
practices towards children which are seen as marginally ethical.
They have been sued multiple times for having "unhealthy" food, allegedly with addictive
additives, contributing to the obesity epidemic in America. In 2004, Michael Spulock filmed
the documentary Super Size Me, where he went on an all McDonald’s diet for 30 days and
wound up getting cirrhosis of the liver. This documentary was a direct attack on the QSR
industry as a whole and blamed them for America's obesity epidemic. Due in part to the
documentary, McDonalds no longer pushes the super size option at the dive thru window.
Any contamination of the food supply, especially e-coli.
Major competitors, like Burger King, Starbucks, Taco Bell, Wendy's, KFC and any mid-range sit-
down restaurants.
Risk Factors and Management of Risk
Over the years public pressures and legal issues have been among the greatest
of risk factors for McDonald’s. The Firm has been involved in a number of lawsuits
and other legal cases, most of which involved trademark disputes. The company
has threatened many food businesses with legal action unless they drop the Mc or
Mac from their trading name. In one noteworthy case, McDonald's sued a Scottish
café owner called McDonald, even though the business in question dated back
over a century (Sheriff Court Glasgow and Strathkelvin, November 21, 1952).
On September 8, 2009, McDonald's Malaysian operations lost a lawsuit to
prevent another restaurant calling itself McCurry. McDonald's lost in an appeal to
Malaysia's highest court, the Federal Court. It has also filed numerous defamation suits.
For example, in the McLibel case, McDonald's sued two activists for distributing
pamphlets attacking its environmental, labor and health records. After the longest trial
in UK legal history, McDonald's won a technical victory for showing that some
allegations were untrue. The McLibel Case was also a massive public relations disaster
for McDonald's, as the judge also found that while more than half of what was on the
pamphlet was truthful, much of the information simply the
opinions of the activists and therefore non-prosecutable.
McDonald's has defended itself in several cases involving
workers’ rights.
In 2001 the company was fined £12,400 by British magistrates for
illegally employing and over-working child labor in one of its London
restaurants. This is thought to be one of the largest fines imposed on a
company for breaking laws relating to child working conditions. In April
2007 in Perth, Western Australia, McDonald's pleaded guilty to five
charges relating to the employment of children under 15 in one of its
outlets and was fined AU$8,000. Possibly the most infamous legal case
involving McDonald's was the 1994 decision in The McDonald's Coffee
Case.
Management Strategies to Offset Risk Factors:
In response to public pressure, McDonald's has sought to include more healthy
choices in its menu and has introduced a new slogan to its recruitment posters: "Not
bad for a McJob". (The word McJob, first attested in the mid-1980s and later
popularized by Canadian novelist Douglas Coupland in his book Generation X, has
become a buzz word for low-paid, unskilled work with few prospects or benefits and
little security.) McDonald's disputes the idea. In 2007, the company launched an
advertising campaign with the slogan "Would you like a career with that?" on Irish
television, outlining that their jobs have many prospects.
In a bid to tap into growing consumer interest in the provenance of
food, the fast-food chain recently switched its supplier of both coffee
beans and milk. UK chief executive Steve Easterbrook said: "British
consumers are increasingly interested in the quality, sourcing and ethics
of the food and drink they buy". McDonald's coffee is now brewed from
beans taken from stocks that have been certified by the Rainforest
Alliance, a conservation group. Additionally, milk supplies used for its
hot drinks and milkshakes have been switched to organic sources which
could account for 5% of the UK's organic milk output.
In April 2008, McDonald's announced that 11 of its Sheffield
restaurants have been using a biomass trial that had cut its waste and
carbon footprint by half in the area. In this trial, waste from the
restaurants were collected by Veolia Environmental Services and used
to produce energy at a power plant. McDonald's plans to expand this
project, even though the lack of biomass power plants in the U.S. will
prevent this plan from becoming a national standard anytime soon. In
addition, in Europe, McDonald's has been recycling vegetable grease by
converting it to fuel for their diesel trucks.
McDonald's announced on May 22, 2008 that, in the U.S. and
Canada, it will be introducing cooking oil for its French fries that
contain no trans- fats. The company would use canola-based oil
with corn and soy oils by year's end for its baked items, pies and
cookies. With regard to acquiring chickens from suppliers who
use CAK or CAS methods of slaughter, McDonald's says they need
to see more research to help determine whether any CAS system
in current use is optimal from an animal welfare perspective.
Sustainable Competitive Advantage and StrategyDeveloping and continuing to offer quality products and services that satisfy the needs and
wanted of local consumers would be my global strategy and it is central to McDonald’s sustaining
competitive advantage all over the world. McDonald's predominantly sells hamburgers, various
types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts.
In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare.
Portugal is the only country with McDonald's restaurants serving soup. This local deviation from
the standard menu is a characteristic for which the chain is particularly known, and one which is
employed either to abide by regional food taboos (such as the religious
prohibition of beef consumption in India) or to make available foods with
which the regional market is more familiar (such as the sale of McRice in
Indonesia).
In summer of 2008 McDonald's introduced Fish Fingers with
tartar dipping sauce as a side entrée. A Chicken Big Mac, which is
the same as a standard Big Mac, though it is made with breaded
chicken the same thickness as a Big Mac patty. In 2001,
McDonald's introduced the McFalafel sandwich in Egypt. Another
menu item is the Fish Mac, with two fish patties. Also introduced
to the Cairo McDonald's in early 2010 was Egyptian Cookies.
Implementation and Measurement:
Nike Inc., Levi Strauss & Co., and McDonald’s Corporation
The most common method used to measure business success is financial worth. The more
the business is worth the more successful the Firm is considered to be. The extreme of this
would be the valuation of the business if it’s publicly traded. The Firm’s market value would be
recorded daily in the newspaper. Management could look at the stock quote and compute the
company’s financial value each day, if so desired.
The measure of worth is given great weight by society. We see this from the popularity of
the Forbes’ Top 500 list, which records the Top 500 Companies in the world. We see this by the
desire of so many Firms to make such a list someday. There are many ways to measure success,
but the following five basic measurements should be central when measuring a business’s
success:
1. Profit – is the company profitable?
2. A growing customer base – is the customer base growing?
3. Customer satisfaction – are customers satisfied with our
products and services?
4. Employee satisfaction – are employees satisfied with working
conditions and benefits?
5. Owner satisfaction – are owners of the firm satisfied with
profits and growth of the business?
Firm Global Implementation and Success Measurements
Nike Inc. – is the world's leading supplier of athletic shoes and apparel and a major
manufacturer of sports equipment with revenue in excess of US$18.6 billion in its fiscal year 2008
(ending May 31, 2008). As of 2008, it employed more than 30,000 people worldwide. Nike and
Precision Castparts are the only Fortune 500 companies headquartered in the state of Oregon.
(“About Nike,” 2010).
Nike has contracted with more than 700 shops around the world and has offices located in 45
countries outside the United States. Most of the factories are located in Asia, including Indonesia,
China, Taiwan, India, Thailand, Vietnam, Pakistan, Philippines, and Malaysia. On March 3, 2008, Nike
acquired sports apparel supplier Umbro, known as the manufacturers of the England national
football team's kits, in a deal said to be worth £285 million (about US$600 million).
In 2009 Nike announced total worldwide sales of just under $19.2
billion. Nike had a global reach, with 34% of its total 2009 revenue
coming from the United States and EMEA (Europe, the Middle East,
Africa) accounting for an additional 29%. As of November 30, 2010 Nike
reported financial results for its fiscal 2011 second quarter. Earnings per
share for the quarter were up 24 percent on 10 percent higher net
revenue as Nike, Inc. brands continued to experience strong sales in the
marketplace and benefit from clean inventory positions while better
leveraging SG&A expenses. (“NIKE Inc. Reports Fiscal 2011,” 2010).
Levi Strauss & Co. – is a worldwide corporation organized into three geographic
divisions: Levi Strauss Americas (LSA), based in the San Francisco headquarters; Levi
Strauss Europe, Middle East and Africa (LSEMA), based in Brussels; and Asia Pacific
Division (APD), based in Singapore. The company employs a staff of approximately
10,500 people worldwide, and owns and develops a few brands. Levi's, the main
brand, was founded in 1873 in San Francisco, specializing in riveted denim jeans and
different lines of casual and street fashion. (“Levi's (Europe),” 2010).
By 2007, Levi Strauss recorded total annual sales, of just over $4 billion. After
more than two decades of family ownership, rumors of a possible public stock offering
were floated in the media in July 2007.
Today, Levi operates in 110 countries and approximately half of its net revenues
come from outside the United States. The Firm associates its success with creating truly
global distribution of products and a record of responsible business practices. The
Company believes its practices, combined with respect to local communities, has helped
build a brand that people love and trust. Levi’s worldwide leadership team includes the
CEO and 11 executives, and they set the company’s overall direction and are responsible
for all major strategic, financial and operational decisions.
As of 2009, Levi Strauss & Co. had net revenues of $4.1 billion, a 7 percent decrease
versus the prior year. The Firm’s net income was $152 million, down from $229 million
the previous year. (“Levi Annual Report,” 2010). The fastest growing market for Levi
globally is Asia.
McDonald's Corporation – is the world's largest chain of hamburger fast
food restaurants, serving more than 58 million customers daily. (“McDonald's
posts sizzling,” 2010). The first McDonald's restaurants opened in the United
States, Canada, Costa Rica, Panama, Japan, the Netherlands, Germany,
Australia, France, El Salvador and Sweden, in order of openings.
With the expansion of McDonald's into many international markets, the
company has become a symbol of globalization and the spread of the American
way of life. Its prominence has also made it a frequent topic of public debates
about obesity, corporate ethics and consumer responsibility.
McDonald's restaurants are found in more than 100 countries and territories around the world
and serve 58 million customers each day. (“Corporate Overview 2008,” 2010). McDonald's operates
over 31,000 restaurants worldwide, employing more than 1.5 million people. The company also
operates other restaurant brands, such as Piles Café. (“McDonald’s Annual Report 2009,” 2010). As
of December 2010, McDonald’s announced global comparable sales growth of 4.8%.
Performance by segments and other global statistics (2010) was as follows:
1. U.S. up 4.9%
2. Europe up 4.9%
3. Asia/Pacific, Middle East and Africa up 2.4%
4. Number of Global Restaurants: More than 32,000
5. Number of Countries: 117
6. Number of worldwide employees: 1.7 million
McDonald’s Corporation posted earnings of $1.09 billion, or $1 per
share, during the first quarter of FY2010, up from $979.5 million, or $0.96
per share, of earnings in Q1 FY2009.
These earnings results were impacted by a $0.03 charge relating to
closings of some locations in Japan. Revenues for MCD rose to $5.61 billion,
an increase of 10% from Q1 FY2009, and also ahead of analyst expectations
of $5.53 billion. Same-store-sales also went up 4.2%, with US same-store-
sales up 1.5%, 5.2% in Europe and 5.7% in Asia, Pacific Islands, Middle East,
and Africa. (“McDonald’s Global Revenue,” 2010).
ConclusionNike Inc. found that the external environment can be a strategic management’s dream. The
Firm seized upon opportunities to market products in ways that speak to community concerns
and needs of people all over the world. Nike achieved strategic competitiveness and earned
above average returns by becoming more socially and environmentally conscious which has left
much of its competition stuck in the starting gates.
Global Strategic planning is critical to Firms that market internationally. A company like Levi
Strauss that operates globally must formulate successful strategy to take advantage of global
opportunities. The newly introduced dENiZEN™ brand is an example of Levi management mind
set to compete globally and to retain competitive edge in both new and mature markets.
Additionally, Levi has found diversification through acquisition and restructuring strategies an
expediently direct route to success internationally and domestically.
Global Strategic planning should be evaluated and adjusted as an ongoing process.
McDonald’s Corporation understood and benefited from corporate governance and that
corporate governance is very important in national and international settings and fosters ethical
strategic decisions and behaviors on the part of top executives that result in sustainable
competitive advantage.
Global Strategic planning requires deep understanding and analysis of a Firm’s situation in
each market and the development of a plan by strategic managers that will be right for each
individual country and each individual community. Nike Inc., Levi Strauss & Co., and McDonald’s
Corporation are masters of global strategic planning. They understand the importance of putting
in place the right organizational structure and controls so decisions can be made promptly and
actions can be implemented quickly to gain or maintain competitive advantage.
Firms competing on the global stage know the value of corporate
governance and cooperative strategies so that they may be citizens in all
environments and compete no matter the competition, local tradition or
obstacles. At the end of the day businesses like Nike, Levi, and McDonald’s
measure success via review of their bottom lines (are we profitable?), and
their strategic planning enables continued success worldwide.
References
About Nike http://www.nike.com/nikeos/p/nike/en_US/ Retrieved 2010.
NIKE, Inc. Reports Fiscal 2011
http://www.morningstar.com/news/business-wire/20101221006313/nike-inc-reports-fiscal-
2011-second-quarter-results.aspx Retrieved 2010.
Emerging Textiles February 2008. : //www.emergingtextiles.com/?q=stu&s=TI-green-
textiles&c=stu080423-&peu=eu395&pus=us632 retrieved 2010.
Wicked Local http://www.wickedlocal.com/lexington/news/business/x883026486 retrieved
2010.
Locations: Levi Strauss http://www.levistrauss.com/careers/locations Retrieved 2010.
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Denizen http://www.levistrauss.com/brands/denizen Retrieved 2010.
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