MNG3701 May/Jun 2019 exam paper — questions

Every question, by topic

1. Question 1 · Macro-environmental analysis · 15 marks

   McDonald's opened its first restaurant in Illinois, America, in 1955 and today runs more than 36 000 restaurants in over 100 countries worldwide, making it one of the world's leading food service brands. Since entering South Africa in November 1995, it has grown to more than 200 restaurants, serving over 8 million customers a month and employing over 8 000 people, which makes South Africa one of the franchise's most successful markets internationally. The company is known for comprehensive, standardised crew training delivered across its restaurants, having trained and employed over 10 000 South Africans at levels ranging from franchisee to restaurant manager to crew member, and was named Deloitte Best Company to Work for in South Africa in 2009, 2010 and 2011. Through its McCafé brand it also sells high-quality coffee made from beans sourced globally, competing internationally with Starbucks. Its operations strategy centres on speed, standardisation, quality and affordability: market research showed customers prioritise speed above all, so the company uses standardised training and new drive-through layouts to minimise the time between an order being placed and the customer leaving. It also competes on low prices through efficient, value-driven processes in line with its vision of being the most efficient provider offering the best value to the most people, exemplified by its long-standing value meal, even as it faces a global decline in customer traffic linked to weak consumer spending, higher fuel prices, increased taxes and high unemployment. On quality, McDonald's uses only 100% pure beef in its burgers, sources more than 97% of the food served in its South African restaurants from local suppliers to meet its quality standards, and publishes nutritional information online to help customers make informed choices; its menu is designed to suit the whole family, and all its South African restaurants are certified by the Halaal Trust of the Muslim Judicial Council. Despite Africa having a population of over 1.2 billion people, McDonald's currently operates in only four African countries — Morocco, Egypt, South Africa and Mauritius — and there has been speculation about when it might enter Nigeria, with the main obstacle being the lack of adequate supply chains, since Nigeria lies too far from South Africa, Egypt or Morocco for existing supply chains to simply be extended there. McDonald's has established more than 36 000 restaurants in over 100 countries, with over 200 of these located in South Africa, yet elsewhere on the continent it is present only in Morocco, Egypt and Mauritius, leaving a massive untapped market for the company in the rest of Africa. Using a suitable model, analyse the macro-environment in Africa, with specific reference to the challenges that might be prohibiting McDonald's from expanding into the rest of Africa.Show the full questionShow less

2. Question 2 · Levels of strategy · 12 marks

   Explain how four (4) distinct levels of strategy found in business organisations differ from one another, linking each level to the corresponding level of management responsible for making decisions at that level. For every one of these four levels, give an example of a decision that the relevant manager might have to make, with all examples drawn specifically from McDonald's. Structure the answer using a table with columns for the level of strategy, the level of management (the manager who makes the decision), and an example of a decision.Show the full questionShow less

3. Question 3 · The strategic management process · 8 marks

   Explain eight (8) shortcomings of the traditional process approach to strategic management.Show the full questionShow less

4. Question 4.1 · Resources, capabilities and core competencies · 6 marks

   Explain the differences between resources, capabilities and core competencies.Show the full questionShow less

5. Question 4.2 · Resources, capabilities and core competencies · 4 marks

   Applying the resource-based view, identify four (4) strengths of McDonald's.Show the full questionShow less

6. Question 5.1 · Responsible management and governance · 8 marks

   These questions concern corporate governance and sustainable development, with reference to McDonald's. Explain the distinction between corporate governance and sustainable development.Show the full questionShow less

7. Question 5.2 · Responsible management and governance · 2 marks

   These questions concern corporate governance and sustainable development, with reference to McDonald's. Give two examples of activities that McDonald's could undertake to contribute to its sustainable development.Show the full questionShow less

8. Question 6.1 · Business-level strategies · 12 marks

   Business level strategies are those strategies that organisations implement in order to position themselves within a particular industry. With this statement in mind, answer the following. Critically compare the following four business level strategies: cost leadership, differentiation, focus, and best cost.Show the full questionShow less

9. Question 6.2 · Business-level strategies · 3 marks

   Business level strategies are those strategies that organisations implement in order to position themselves within a particular industry. With this statement in mind, answer the following. In your opinion, which three of the four business level strategies listed above (cost leadership, differentiation, focus, best cost) does McDonald's use? Provide two reasons to support your answer.Show the full questionShow less