LSE (London

School of
Economics)

University of Birmingham University of

Durham University
Southampton University Reading

Doctorate in Business Administration

(DBA)
DBA VALUE MANAGEMENT:
Part1: Company Report (McDonalds)

Part2: The Evidence Review

Part3: Reflection for employability enhancement & leadership

For Assignment writing or Dissertation Help, Please Contact:

Dr. Sajid Saeed

+447762198474 (WhatsApp/Viber/imo)
Email: todrsaeed@gmail.com
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Table of Contents
Part I: Company Report ............................................................................................................................ 3
1.0 Introduction ........................................................................................................................................ 3
2.0 Company Overview: McDonalds Corporation .................................................................................... 3
3.0 The Situational Analysis ...................................................................................................................... 4
3.2 Assessment of Corporate Governance Structure at McDonalds Corporation ................................. 9
3.4 Financial Market Metrics .............................................................................................................. 12
3.5 Inefficiencies identified from situational Analysis of McDonalds Corporation ........................... 13
4.0 Proposed Suggestions for Maximizing Shareholder Value ............................................................... 14
4.1 Financial management .................................................................................................................. 14
4.2 Improve outcomes of Risk Management ...................................................................................... 15
4.3 Risk of not implementing the proposal ......................................................................................... 16
References .............................................................................................................................................. 17
Part II: Evidence Review.......................................................................................................................... 18
1.0 Theoretical and Conceptual Framework........................................................................................... 18
2.0 Evidence Review ............................................................................................................................... 18
2.1 Risk Management ......................................................................................................................... 18
2.2 5C Analysis Framework................................................................................................................ 19
2.3 Financial Analysis/ Ratio Analysis ............................................................................................... 20
2.4 Corporate Governance .................................................................................................................. 21
3.0 Potential DBA Perspective ................................................................................................................ 22
References .............................................................................................................................................. 23
Part III: Reflection Report ....................................................................................................................... 25
1.0 Present critical thinking and core capabilities required ................................................................... 25
2.0 Assessment of present leadership experience, potential, and competencies ................................. 26
2.1 Assessment of personal capabilities to work as a consultant ........................................................ 28
3.0 My development of leadership and career accession ...................................................................... 28
References .............................................................................................................................................. 30
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Part I: Company Report

1.0 Introduction
Every organization operating in competitive environment face several challenges. This makes it
necessary for them to take strategic measures and actions to overcome those challenges. One such
challenge is maximization of shareholder value which means that an organization needs to
strategically assess its external and internal environment to adapt better strategies, practices and
procedures than its competitor to outperform in market. Thus, this consultancy report analyzes
internal and external environment of McDonalds and propose some recommendations to increase
shareholder value.

2.0 Company Overview: McDonalds Corporation

McDonald’s is an American based fast food corporation, initiated in the year 1940 as an eatery
operated by Maurice and Richard McDonald, in California, America. They rechristened their
enterprise as a hamburger stand. The franchise of McDonald’s has utilized the Golden Arches logo
first time in the year 1953 at a place in Phoenix, Arizona. In the year 1955, a businessperson, Ray
Kroc, joined the corporation as a franchise agent and moved forward to purchase the business from
the McDonald brothers. The original headquarters of McDonald’s is in Oak Brook, Illinois, but
the company has approved plans to shift its international center of operations to Chicago by the
year 2018 (Dey 2016).

In terms of revenue, McDonald’s is the largest chain restaurant across the globe. The business is
serving approximately 69 million consumers on a daily basis in more than one hundred countries,
across 36,900 outlets. Even though the corporation is famous for its hamburgers, but McDonald’s
also deals in desserts, wraps, milkshakes, soft drinks, breakfast items, French fries, chicken items,
and cheeseburgers. In response to the altering tastes of the consumers and an unfavorable backlash
due to the unhealthiness of their products, the corporation has added smoothies, fish, salad, and
fruit to its menu. The corporation sales come from the fees, royalties, and rent paid by the
franchises, besides the sales in company-operated outlets. McDonald’s is the second largest
independent employer of the world, with 1.5 million employees working for the enterprise
(Schlosser 2012).
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3.0 The Situational Analysis

3.1 The 5C Analysis framework
The 5C analyzes an organization from five different but critical aspects. The 5C analysis of
McDonalds Corporation is provided below:

3.1.1 Company
The mission statement of the McDonalds identifies its strategies that are used to develop its
business operations. It also clearly guides the strategic direction that has helped it to obtain
leadership position in fast food industry. The following is the mission statement of McDonalds
Corporation:

“Our mission is to be our customers’ favorite place and way to eat & drink. We’re
dedicated to being a great place for our people to work; to being a strong, positive presence
in your community; and to delivering the quality, service, cleanliness and value our
customers have come to expect from the Golden Arches – a symbol that’s trusted around
the world” (Meyer 2017).

The vision statement of the company covers nearly all the business aspects, i.e., use of innovation
for customer satisfaction, characteristics of its products, and vision for organizational
development. Moreover, it also identifies its strategic objective to provide best services and food
that matches customer’s expectations and preferences. The following is the vision statement of
McDonalds Corporation:
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“Our overall vision is for McDonald’s to become a modern, progressive burger company
delivering a contemporary customer experience. Modern is about getting the brand to
where we need to be today and progressive is about doing what it takes to be the
McDonald’s our customers will expect tomorrow. To realize this commitment, we are
focused on delivering great tasting, high-quality food to our customers and providing a
world-class experience that makes them feel welcome and valued” (Meyer 2017).

The growth strategy (2017) of McDonalds Corporation is focused on customer as provided in the
following image (Street Insider 2017):

3.1.2 Customers
McDonalds Corporation targets customers that belong to the age bracket of 15-40 years and enjoy
dining out with friends, loved ones and family. In particular, the company targets younger
generation who are outgoing and sociable. Nevertheless, its customer startegy for targeting in
global region is basec on demographic, geographic reach, psychographic variables and growth of
the company. The change in consumption pattern, increase in level of income, and consumer
buying behavior has provided McDonalds Corporation with an opportunity to use differentiated
targeting strategy so that it could meet customer needs and expectations. It uses value-based
positioning strategy rather than product-based positioning that has helped to attract large number
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of customers. Presently, it serves in more than 100 countries globally through its franchise outlets.
The company’s approach to informal eating out segment (IEO) has further supported the brand’s
acceptance among customers (Bhasin 2016).

3.1.3 Competitors
The main competitors of McDonalds include Domino’s Inc., Yum! Brands, Inc., Wendy’s
Corporaiton, Starbucks, and Dunkin’ Brands Group. Nevertheless, its major rivals are Burger
King, KFC, and Subway internationally. However, McDonalds Corporation maintains its strategic
position due to its efficient use of SIPOC (supplier-Input-Process-Outputs-customer) model that
is integrated in company, customer and supplier to increase quality level of its services. Moreover,
low cost of infrastructure, enriched customer experience, and glo-cal strategy has also helped the
company to achieve its distinctive position (Bhasin 2016).

3.1.3.1 Brief Competitors’ Overview

Burger King: Burger King’s menu comrpises of fernch fires, chicken tenders, chicken sandwiches,
hamburgers, and beverages. The company recorded an approx of 1.2 billion dollar sales in the year
2017 (Light 2009). The company is a giant in its industry as well as a close competitor of
McDonalds.

KFC : KFC specialzies basically in fried chicken and has the second largest chain of restaurants
in the world after McDonald’s (measured by revenues). The company offers nearly similar
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products, such as burgers, fries, drinks, etc., ;owever, it uses chicken as its major ingredient that
differentiates it from McDonalds.

Subway: Subway’s menu primarly comprises of salads and submarine sandwiches. In 2017,
Subway reported revenues of 11.3 billion dollars in the U.S. The company is more recognized and
differntiated for its healthy menu that includes vegetables and organic food which is also its
competive advantage.

3.1.4 Collaboration
The logistics of McDonalds is very strong as the relationships are maintained on long term basis
where loyalty and trust are the core factors to support the relationship. The collaboration
philosophy is based on three-legged stool, i.e., employee of McDonalds, operators/ owners and
supplier partners.

Figure 1: Three legged stool of McDonalds

The stool is strong because each leg is strong itself. In other words, all the three legs support
McDonalds equally. The supplier relationship and franchises relation is further analyzed with the
help of inbound and outbound logistics. With respect to inbound logistics, most of the suppliers of
McDonalds are replaced with the help of backward vertical integration to achieve the purpose of
cost reduction and meet high quality standards. In contrast, the outbound logistics of McDonalds
include restaurants (all forms, i.e., ski-thru, counter service, drive-thru and sit down). The brand
maintains a strong relationship with both suppliers and franchisees that has made company to
achieve leadership position in its market.

3.1.5 Climate
In order to assess the climate, PESTLE analysis is used.

3.1.5.1 Economic elements significant for McDonald’s

Economic changes round the globe affect the industry environment of McDonald’s, considering
its international nature. This element of PESTLE assessment pertains to the influence of economic
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trends and conditions on the macroeconomic environment of organizations (Perera 2017). In the
case of McDonald’s, the most remarkable external elements include slow but secure advancement
of the U.S. economy; secure but risky economies of European states: Economic slump in UK;
post-BREXIT vote of UK; and Chinese economy slowdown

McDonald’s possess the opportunity to advance, even slowly, in the U.S. economy, which is the
biggest market for the corporation. Nevertheless, the existing economic conditions of the states of
Europe could threaten the growth of McDonald’s in the region. Moreover, the Chinese economic
slowdown threatens the advancement of the corporation in Asia. In this feature of the PESTLE
assessment of McDonald’s, the economic external elements majorly threaten the business.

3.1.5.2 Socio-cultural Elements Affecting the Business Environment of McDonald’s

McDonald’s should react to socio-cultural changes in its macro-environment. This feature of the
PESTLE assessment attributes towards the social conditions that limit or support the business. In
an instance of McDonald’s, the most substantial socio-cultural external elements are increasing
diversity in cultures; widening gap of wealth and trend of healthy lifestyle.

McDonald’s possesses the opportunity to advance because the target market of the corporation is
mostly from low and medium income households. In addition, it has the opportunity to enhance
its product mix to fulfill the needs of a diverse market. Nevertheless, the trend of healthy lifestyle
is a threat as many of the corporation’s products are frequently criticized for their unhealthy effects.

3.1.5.3 Technological Elements

McDonald’s should tackle the below mentioned technological external elements, i.e., increasing
automation in business; boosting sales by means of mobile devices; and moderate research and
development activity in the sector

McDonald’s possess the opportunity to enhance its R&D investments to boost its business
efficiency and effectiveness. Moreover, McDonald’s can execute more automation to amplify
productivity, founded upon the external elements of growing business automation. McDonald’s
can also enhance its mobile services to knock more consumers via its mobile app or website

3.1.5.4 Environmental Elements

The most important environmental external elements include increasing interest for schemes of
corporate environment; raising focus upon sustainable business policies and change in climate
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The corporation can expand its CRS policies to reach even greater performance in handling the
environmental issues. Nevertheless, change in the climate stays as a threat because of its
unfavorable impact its supply chain process.

3.1.5.5 Legal Elements

The most considerable legal external elements for the McDonald’s are new legal levels of
minimum wage in US; rules of animal welfare; and rules of local heath in schools and workplaces.

McDonald’s encounters the threat of rising minimum wages, which heads to greater costs and
prices. Moreover, local health rules effecting food service in schools and offices could lessen the
revenues of corporation from these areas. McDonald’s should also concentrate upon animal
welfare governing impacts upon the company’s operations. For instance, the corporation can
execute fresh strategies to assure animal welfare among the producers of meat.

3.2 Assessment of Corporate Governance Structure at McDonalds Corporation

The founding member’s approach to corporate governance is still used at McDonald’s
Corporation. Ray Kroc stated that his overall business is based on dependency, truthfulness, and
ethical. The company conducts business with solid, constructive and permanent ethical program.
As the business was developed as individual ownership by Maurice and Richard McDonald
therefore it could be said that the company had ownership concentration in the past. However, with
the expansion of business, the ownership concentration has changed large-block shareholders.
Nevertheless, the owner is transferred to franchisees and their owners as about 82% of the business
is franchise owned. This reflects that the McDonald Corporation has adapted “bifurcated
ownership model” that has largely benefitted the company. This model enables franchise owner to
own restaurant while maintaining control over pricing, marketing, purchasing and staffing
decisions (Tirintetaake 2017). However, the company also has a corporate governance structure at
its Head office with key members on the board who take major decisions about the business. The
following image shows the corporate governance structure at McDonalds that include Board of
Directors on the top. However, the next position level include audit and finance committee,
compensation committee, Governance committee, public policy and strategy committee, and
sustainability and corporate responsibility committee (Street Insider 2017). However, below them
operate different management position members who work devotedly and perform all the
responsibilities provided to them by the top management.
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McDonalds Corporation explicitly states that its board members and directors possess several
skills that provides them with broad vision and way/ procedure to accomplish them. The members
and directors have high integrity, strategic planning skills, possesses knowledge of CG practices,
intellectual analytical skills, good judgment and character, proven success records, leadership
skills, risk assessment and talent management skills (Street Insider 2017). The following chart
provides a brief overview of the key members of the corporate governance structure and their
position and responsibilities at McDonalds Corporation.
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3.3 Assessment of Risk Management of McDonalds Corporation

The Board members at McDonalds Corporation are responsible to manage enterprise-wide risk
through different management activities. The company does not have any separate section of risk
management or risk assessment; however, the following risks were identified in the annual report
of McDonalds:

Fluctuation in Currency: As McDonalds operate globally, therefore it face a large risk of foreign
currency. The increase or decrease in valuation of foreign currency has large impact on the
business. Therefore, to secure this risk, foreign currency derivatives and debts are used to hedge
the risk associated with specific long term investments, intercompany financings and certain
royalties in foreign affiliates and subsidiaries.

Inflation: Another risk faced by McDonalds Corporation is inflation or effects of changing prices.
The inflationary pressure globally as well as in the regions where it operate affects the buyer’s
capacity to purchase. This risk is avoided by inventory turnover, change in menu prices and
controlling costs.
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Outsourced organization to manage risk: Nevertheless, CAP Index (2017) identifies that it works
with McDonalds Corporation to provide software solution to manage risks of its restaurant, i.e.,
“R2AMP” or “Restaurant Risk Assessment Management Program”. This software helps
management of the McDonalds to track security risk and identify risk to take corrective measures
immediately. Some of the risks managed by CAP Index include security risk, optimization of
resource allocation, standardize incidents, and reduction Legal Liability.

3.4 Financial Market Metrics

In order to assess the financial strength of McDonalds Corporation, the following is the comparison
with Burger King Holdings that is another industry giant and seeking to obtain dominant position
in the fast food industry

Liquidity Ratios

McDonalds Burger King

Corporation Holdings
Current Ratio 1.84 0.8
Quick Ratio 1.54 0.7

The given liquidity ratios (as of year 2017) shows that McDonalds Corporation has higher liquidity
ratios, both quick ratio and current ratio, which means that it has strong liquidity position and is
able to meet its debt obligations easily as compared to Burger King Holdings.

Profitability Ratios

McDonalds Burger King

Corporation Holdings
Gross Margin 46.54 -
Operating Margin 41.9 -
Net Margin 39.44 7.5
Return on Asset 0.70 6.8
The given profitability ratios (as of year 2017) shows that McDonalds Corporation has higher
profitability in terms of net margin as it is higher as compared to Burger King Holdings. This
means that the company is exercising good cost control and pricing its products adequately.
However, Burger King has higher return on asset which means that it is managing its assets better
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as compared to McDonalds Corporation. The other profit margins are not identified by Burger
King Holdings.

Efficiency Ratios

McDonalds Burger King

Corporation Holdings
Receivables 13.23 18.3
Turnover
Total Asset 0.70 0.9
Turnover
The given efficiency ratios (as of year 2017) shows that Burger King Holdings has better credit
collection and turnover as compared to McDonalds Corporation. Moreover, the asset turnover of
Burger King Holdings is also higher showing that it is using its assets more efficiently than
McDonalds which is alarming for the company.

3.5 Inefficiencies identified from situational Analysis of McDonalds Corporation

Though McDonalds Corporation has obtained leadership position, however, it pose a great threat
from its competitors as any mis-happening or flaw could affect its market share and position.
There are several inefficiencies identified in McDonalds Corporation’s business through
situational analysis tools, which should be rectified immediately to maximize shareholder worth.
These inefficiencies are listed below:

Firstly, McDonalds Corporation follows franchise business model which transfers ownership to
others. However, its corporate governance model should be explicitly discussed in the annual
accounts to make investors or stakeholders confident about the company.

Secondly, McDonalds Corporation has failed to clearly identify the business risk inherent in its
business under separate section. This is alarming for the company as investors or shareholders
and stakeholders look for how effectively risk is managed by the company. This could also
negatively affect the company.

Thirdly, McDonalds Corporation is though operating in profit as compared to its close rival, i.e.,
Burger King Holdings; however, the company needs to increase its focus on asset utilization and
efficiency which could have long term impact on its financial management.
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4.0 Proposed Suggestions for Maximizing Shareholder Value

On the basis of inefficiencies identified previously, McDonalds Corporation is recommended to
put following suggestions in action so that it could maximize its shareholder value and secure its
market position in the long run.

4.1 Financial management

Key Value Strategic action required Year 1 Year 2 Year 3
Drivers
McDonalds Corporation
should continue its focus on
Net revenue increasing profit margins to
growth remain competitive. For
this, its new customer
centric model and strategy
(identified previously)
should be thoroughly
implemented.
McDonalds could offer
discounts or deal offers at
different occasions to its
customers, particularly in
those regions where there is
low customer buyer power.

McDonalds Corporation
Operating should focus in improving
cost reduction its supply chain
and asset management which is the
utilization core to its success. The three
legged stool (identified
previously) should be
implemented to increase
value while proposing
different benefits to
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franchisee and suppliers to

assure long term
relationship and successful
operations.
McDonalds Corporation
should increase its asset
utilization and focus more
on increasing equity rather
than on debt.

McDonalds Corporation should also try to increase its cost of capital by 4% in this year and by
7% within following three years. This could be done by implementing the following
propositions:

Key Strategic action required Year 1 Year 2 Year 3

Value
drivers
Debt cost McDonalds Corporation
reduction should try to reduce its debt
and increase equity.

Capital McDonalds Corporation

structure should review its capital
review structure, i.e., increase equity
and reduce debt.

4.2 Improve outcomes of Risk Management

McDonalds Corporation should explicitly identify all the risk it face and the proper strategies it
practices in the annual accounts of the company. This is because the shareholders look for the risk
management as the contemporary business environment inherent increased risk than before. The
market risk, currency risk, liquidity risk, franchise risk, operational risk, supplier risk (particularly
about beef scandals), etc. This will help to make position of McDonalds Corporation among its
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shareholders which will encourage them to increase investment thereby increasing equity (change
in capital structure).

4.3 Risk of not implementing the proposal

In case if McDonalds Corporation failed to implement the proposal or the recommendations
provided, it will have large impact on the shareholders and their views regarding the company.
This could reduce their investment making company to rely more on debt. Moreover, its close
competitor, i.e., Burger King, will overtake its dominant market position as it also excels in every
area including financial management. Likewise, the company could face losses if it failed to
overcome its issue of efficiency management and asset utilization. Thus, in order to maximize
shareholder value, it is important for the company to put proposed suggestions into action.
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References
Bhasin, H 2016. Marketing Strategy of McDonald’s – McDonald’s Marketing Strategy.
Available from https://www.marketing91.com/marketing-strategy-mcdonalds/ [25
March 2018]

CAP Index 2017. Improved Risk Assessment & Security While Managing Costs & Liability.
Available from https://capindex.com/mcdonalds-risk-assessment-program/ [27
March 2018]

Dey, K 2016, The fast food industry in the UK. Analysis of McDonalds with PESTEL, VRIN and
Porter's Five Forces. GRIN Verlag

Light. 2009, Six Rules for Brand Revitalization : : Learn How Companies Like McDonald’s Can
Re-Energize Their Brands. Pearson Education India.

Meyer, P 2017. McDonald’s Vision Statement & Mission Statement Analysis. Available from
http://panmore.com/mcdonalds-vision-statement-mission-statement-analysis [25
March 2018]

Perera, R 2017, The PESTLE Analysis, Nerdynaut.

Schlosser, E 2012, Fast Food Nation: The Dark Side of the All-American Meal. Houghton Mifflin
Harcourt.

Street Insider 2017. Form DEF 14A MCDONALDS CORP For: May 24. Available from
https://www.streetinsider.com/SEC+Filings/Form+DEF+14A+MCDONALDS+C
ORP+For%3A+May+24/12777125.html [26 March 2018]

Tirintetaake, I 2017. McDonald's Corporate Governance. Available from

https://www.researchgate.net/publication/320450619_McDonald's_Corporate_Go
vernance [26 March 2018]
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Part II: Evidence Review

1.0 Theoretical and Conceptual Framework

The analysis of different concepts and terms theoretically and conceptually helps to understand the
meaning and context on the basis of further discussion is done. With respect to adding value or
managing value or creating value, it is first important to understand and analyze its need for any
organization. However, to do so, there are several tools available to analyst, consultant or decision
makers to analyze internal and external situation of an organization so that required actions or
strategies could be proposed and recommended. As the company report (Part I) has used several
tools to analyze the present situation of an organization, i.e., British Airways, therefore, this part
of evidence review discusses literature and context of those tools to provide theoretical support
and reasoning behind using them.

2.0 Evidence Review

This section provides theoretical and conceptual insight on the different tools that helps to
analyze organization’s situation in context of the strategies used, implemented and their
outcome. In particular, this section discusses financial analysis, risk management, corporate
governance and 5C framework.

2.1 Risk Management

Pinedo and Walter (2013) defines risk management as a way that helps to protect the assets of a
company from the risks and losses inherent in contemporary business environment. It also refers
to avoiding or mitigating risks that could incur during organization’s different activities, such as
operations, management, etc., In contrast, Culp (2002) has defined risk management as a planned
approach to control, organize, manage and direct the resources to achieve goals when an
organization face any unforeseen or unexpected circumstances. However, Bonham (2008) has
identified the basic risk management strategies that include avoidance (remove risk by
withdrawing from), sharing (outsource, insure or transfer risk), reduction (mitigate or optimize)
and retention (budget and accept the risk).

It is important for the business organizations to consider risk management. The International
Organization for Standardization (2009) identifies that the primary purpose of managing risk is to
create value by integrating different risk management strategies into organizational strategic
decisions. This helps to avoid uncertainties by making decisions on the basis of process, structure,
information and human elements. However, the risk management strategies should be transparent,
dynamic, inclusive, responsive to immediate change, and seek for continuous improvement of the
 19

organization. However, Iverson (2013) regards that risks could create several financial or
economic loss with a chance of likelihood to high severity, which is usually on the basis of risk
management and the other decisions taken by the organization. Nevertheless, the decisions could
also result in positive consequences, i.e., timely achievement of organization’s target and
objectives. Mowbray, et al., (1979) identifies the categorization of risks which are the outcome of
complexities, and include pure risk and speculative risk. The pure risk is also known as static risk
which has adverse effect on an organization and occurs due to any accidental occasions). In
contrast, the speculative risk, which is also known as dynamic risk, basically affects the
opportunities of earning or any sort of damages, i.e., entrepreneurial risk, that include investment
(that does not count profit) and are associated with the management and planning functions of an
organization such as promotion, sales, advertisement, marketing, etc. However, Frigo (2018) has
divided risk on the basis of different internal and external factors, where the former include an
organization’s infrastructure, human resources, technology, process, etc., whereas the later include
external environmental factors of technology, ecology, social, cultural, economic and political.

With respect to the significance of risk, Sidorenko and Demidenko (2017) states that it is necessary
for all the organizations operating in contemporary business environment to plan for any
unforeseen risk. However, in order to manage risk, the process includes risk management and
corporate objectives; identification (inhabiting conditions, threats, units of risks); evaluation
(priorities, analysis and assessment); treatment (residual risk, treatment techniques, and
unacceptable risks); monitoring or auditing of risk. However, the risk assessment is made
particularly in identification and evaluation stage. Nevertheless, Khemani (2007) states that an
organization should largely emphasize on the timely assessment of risk on the basis of which
measures could be taken, if they happen unexpectedly. The other techniques to mitigate or avoid
risks should be integrated into strategic actions of the organization to minimize their occurrence
and consequences. In a summary, risk management is an important process for which every
organization should adapt and practice specific process and measures to assure their sustainability.

2.2 5C Analysis Framework

One of the important to analyze internal and external factors of an organization is the 5C analysis
or framework. It also provides detailed information on the organization and its prevailing position
in the market (Wu 2012). The 5C is the acronym of company, customers, competitors,
collaborators, and climate. With respect to company, it is analyzed on the basis of objectives,
capabilities and strategies that defines the model’s strength and weakness. This helps to identify
the organization to consider the weak areas and adapt strategies accordingly (Evans 2013). With
 20

respect to customers, they are the key people for whom organization devote its activities and
resources. They are analyzed from different aspects such as frequency of purchase, income level,
quantity of purchase, customer needs, potential growth, distribution channel (from wholesaler to
retailer and online), demographics and market size (Evans 2013). With respect to competitors, they
are the rivals that help an organization to set bench mark and operate competitively. The
competitors are assessed on the basis of their capabilities, competencies, resources, initiatives,
strategies, goals and future expected positions (Evans 2013). With respect to collaborators, they
help an organization to create and develop ideas that could be implemented to achieve business
opportunities provided by external environment. Some of the key collaborators of the business
include agencies, distributors, partnerships, and suppliers, etc. An organization should maintain
long term relationship with them as they are key supporters that help in the growth and survival of
the business (Evans 2013). With respect to climate, it includes political, economic, social and
cultural, technology, and legal, environment which are external to the organization, but have large
impact on its operations (Evans 2013). It could be summarized that all the important internal and
external factors to the organization is covered by 5C analysis making it an important tool to be
used for analysis.

2.3 Financial Analysis/ Ratio Analysis

Nearly all organizations use financial or ratio analysis as a tool to find out their financial position
and profitability/ losses. It is an important tool that helps managers and decision makers to decide
the strategies and plans for future, or to take other managerial decisions. Altman (1968) states that
ratio or financial analysis is done by assessing financial statements (profit and loss account/ income
statement and balance sheet) using different ratios that are calculated through standardized
formulas. The outcome are assessed to draw their implications. However, Weygandt, Kieso and
Warfield (2001) states that financial analysis helps to reveal an organization’s financial position,
strengths and weaknesses in different areas, such as credit worthiness, supplier relations, sales,
operations, etc. Likewise, Thachappilly (2009) states that it is important for an organization,
particularly listed organizations, to reveal and communicate financial analysis/ financial
statements and/ or financial position to the stakeholders and shareholders on a regular basis. This
is done usually on quarterly, half yearly and annual reports. However, Ross, Westerfield and
Jordan (2013) states that the purpose of financial analysis is to suggest an organization to take and
adapt different strategies to improve its position while avoiding from future losses. It also helps to
identify future risks that an organization could face in future, such as liquidity risk, operational
inefficiency, credit default, etc. Similarly, Robinson, )2012( Henry and Pirie is of view that an
 21

organization’s top management or the board members are responsible to reveal all the financial
details transparently to the stakeholders that helps them to decide either to invest in the
organization or withdraw their shares.
Peterson and Fabozzi (1999) states that financial ratios are considered as an important indicator
used by managers and organizational decision makers to find out financial position whereas
shareholders and stakeholders analyzes it from investment point of view. Besides providing an
overview of creditworthiness, financial analysis also identifies a firm value, success/ failure of
financial goals, and prospects of acquisition/ merger. Similarly, Bazley,Hancock, and Robinson
(2014) argues that ratio analysis or financial analysis provides meaningful contribution in an
organization’s financial outcomes. Some of the important ratios that are widely used include
Return on Equity, Return on Assets, Du Pont, working capital ratios, profitability ratios, liquidity
ratios, equity ratios and debt ratios. These different ratios provides different views and analysis to
compare and contrast financial worth within an industry. Additionally, the ratios could also be
used to compare financial position by assessing historical ratios and their outcomes. Nevertheless,
the ratios for organization even for those operating in similar industry could differ because of the
differences in working capital requirements, i.e., combination of debt and equity. The horizontal
and vertical analysis that also comes under financial analysis of a single organization helps to
identify the trend which could be used for future predictions and projections. It could be
summarized that financial ratios or analysis is an important tool which is widely used by decision
makers and analyst to find an organization’s current and future position in an industry.

2.4 Corporate Governance

It is important for an organization, particularly listed organizations, to have proper corporate
governance structure as it helps to differentiate the role and responsibilities of owner and
management. Moreover, the responsibilities and role of each member of the corporate governance
helps to make them liable to fulfil their duties to achieve common objectives (Naidoo 2002).
Different theories have discussed corporate governance practices, where the shareholder theory
and agency theory has received the most fame and are widely implemented.
Groot (2009) defines corporate governance as distribution of ownership, managerial incentive
schemes, capital structure, investor pressure, takeovers/ mergers/ acquisition, board of directors,
market competition, organizational structure, etc. However, Joshi (2004) defines corporate
governance as a system that helps owners to control and manage organization through independent
third party management. This separates the responsibilities of management from owners who are
responsible to provide transparent information to the stakeholders and shareholders. However, the
 22

common objective of both management and owners is to achieve organizational goals and targets.
In contrast, Zhao (2011) defines corporate finance as a process, law, institution, policies or custom
that directs an organization to act, manage and control their routine operations. Similarly, Calder
(2008) states that corporate governance helps to maintain strong ties between management and
organization as well as with its external stakeholders. Moreover, the corporate governance
structure has also solved the organization’s problem of agent-principal. The management’s
practices of good corporate governance helps to create a well-established standard which is
necessary in contemporary competitive environment. Its importance could also be assessed from
the fact that it has helped business organizations and economy to expand. Moreover, it also helps
to increase efficiency of an organization. It could be summarized that corporate governance
structure is important for every organization as it helps to segregate roles and responsibilities that
helps to increase organizational efficiency and solve principal agent problems assuring growth and
survival of businesses.

3.0 Potential DBA Perspective

This report on value management has tried to all the outcomes on the basis of which further
researches in DBA could be produced. Though, the report, literature evidences and personal
assessment has helped me to identify my strengths and weaknesses; however, they have also
helped me to understand the necessity and need of understanding theoretical concepts and reasons
behind using important tools and approaches used by a consultant. In general, the research skills,
writing skills, analytical skills and logical development of approaches and recommendations
would definitely help me in producing better consultancy reports and research reports in future.
On the other hand, producing company report as a consultant on the chosen organization has helped
me understand why an organization need adapt different practices to increase or maximize
shareholder wealth and what value it provides upon achieving it.
 23

References
Altman, E 1968, ‘Financial ratios, Discriminant analysis and the prediction of corporate
bankruptcy’, The Journal of Finance, Volume 23, Issue 4, pp 589-609

Bazley, M, Hancock, P and Robinson, P 2014, Contemporary Accounting, Cengage Learning

Australia

Bonham, SS 2008, Actionable Strategies Through Integrated Performance, Process, Project,

and Risk Management, Artech House

Calder, A 2008, Corporate Governance: A Practical Guide to the Legal Frameworks and
International Codes of Practice, Kogan Page Publishers

Culp, CL 2002, The Risk Management Process: Business Strategy and Tactics, John Wiley &
Sons

Evans, V 2013, Key Strategy Tools: The 80+ Tools for Every Manager to Build a Winning
Strategy, Pearson UK

Frigo, ML 2018, Strategic Risk Management: The New Core Competency, Wiley

Groot, C 2009, Corporate Governance as a Limited Legal Concept, Kluwer Law International

International Organization for Standardization 2009. Principles and generic guidelines on risk
management. Available from http://www.iso.org [23 March 2018]

Iverson, D 2013, Strategic Risk Management: A Practical Guide to Portfolio Risk Management,
John Wiley & Sons

Joshi, V 2004, Corporate Governance: The Indian Scenario, Foundation Books

Khemani, K 2007, ‘Bringing Rigor to Risk Management’, Supply Chain Management Review,
Volume 11, Issue 2, pp 67-68

Mowbray, et al., 1979, Insurance, Krieger publishing Co

Naidoo, R 2002, Corporate Governance: An Essential Guide for South African Companies, Juta
and Company Ltd

Peterson, PP and Fabozzi, FJ 1999, Analysis of Financial Statements, John Wiley & Sons

Pinedo, M and Walter, I 2013, Global Asset Management: Strategies, Risks, Processes, and
Technologies, Palgrave Macmillan UK
 24

Robinson, TR, Henry, E, Pirie, WL and Broihahn, MA 2012, International Financial Statement
Analysis, John Wiley & Sons

Ross, S, Westerfield, R and Jordan, B 2013, Fundamentals of corporate finance, McGraw-Hill

Publishers

Sidorenko, A and Demidenko, E 2017, Guide to Effective Risk Management, CreateSpace

Independent Publishing Platform

Thachappilly, G 2009, ‘Debt Ratios Look at Financial Viability/Leverage: The Ratio of Debt to
Equity Has Implications for Return on Equity’, Journal of debt ratios analysis.

Weygandt, JJ, Kieso, DE and Warfield, TD 2001, ‘Intermediate accounting: cash ratio analysis’,
Bearcat Company, Vol-1, pp 211.

Wu, C 2012, Nucleosomes, Histones & Chromatin, Academic Press

Zhao, Y 2011, Corporate Governance and Directors' Independence, Kluwer Law International
 25

Part III: Reflection Report

1.0 Present critical thinking and core capabilities required

In order to assess the critical thinking and future core capabilities required, personal SWOT
analysis is used that will identify the present strengths and weaknesses in me while providing the
future capabilities I need through opportunities and the threats posed by me.

Strengths Weaknesses

 Past consultancy experience  Limited exposure to all industries

 Professional degree and qualification  Limited knowledge regarding global
 Past research skills organization
 Skills and analytical capabil9ities  Limited practical experience
 Critical thinking  Few additional certificates
 Logical development of ideas and  Few negative characteristics
insights  Overly communicative
 Interpersonal skills  Exhausted when overloaded with
 Team builder work
 Leadership  Introvert.
 Additional certifications
 Teamwork
 Extensive research
 Strong communication skills
 Listening skills
 Writing skills
 Honesty and integrity
 Rational decision maker
 Expertise
 Industry knowledge
 Competent
 Strong Drive to achieve goals
 Adaptable
 Individual accomplishment
 26

Opportunities Threats

 Remain in contact with industry  Increasing competition in the field of

professionals and other consultants
 Get recruited to consultancy firm
 Work as intern at a consultancy firm
 Obtain professional higher
qualification and degree
 Enroll in certified professional courses
and diplomas
 Attend conferences and trainings
provide in the area of consultancy.
 Learn and improve research skills
 Improve communication and
interpersonal skills
 Increasing business and competitive
pressure for consultancy client
organizations.
consultancy
 Large number of consultants and
consultancy firms in the market
 Price war
 Leadership position is competitive and
difficult to acquire
 Issues in obtaining higher degree and
qualification
 Preference of time and money over
quality.

2.0 Assessment of present leadership experience, potential, and competencies

In order to assess my leadership competencies, experience and potential, Johri Window Model has
been used. This model analyzes from four different prospective, i.e., Unknown, Arena, Blind Spot
and Fascade (West andTurner 2008).
 27

The analysis is provided below:

The Facade Area: It provides those skills and competencies that are known to individual himself/
herself only. This means that other people are aware of it. My façade area leadership experience,
potential, and competencies include open mindedness, caring, friendly, loving, broad mined,
acceptable, satisfied and content.

The Arena Area: It provides those skills and competencies that are known to oneself as well as
other people know it. My arena area leadership experience, potential, and competencies include
motivated, limited consultancy experience, problem solver, conflict resolver, trustworthy,
respectable, team worker, good communicator, vision, creative and honest.

The Blind Spot: It provides those skills and competencies that are unknown to oneself and other
people are aware of it. My arena area leadership experience, potential, and competencies include
realistic, liberal, independent, confident, good observer, analytical thinker, team work, patient,
trustworthy, good speaker, mature, organized, punctual, knowledgeable, team work, honest, good
communicator, persuasive, counselor, and friendly.
 28

The Unknown Area: It provides those skills and competencies that are unknown to oneself and
as well as to others. My arena area leadership experience, potential, and competencies include
decision making ability, leadership, and reflective, adaptable, authoritative, intelligent, ability to
do several task at a time and team builder.

2.1 Assessment of personal capabilities to work as a consultant

As per my abilities and competencies, I have tried my best to complete this consultancy project.
Though, there could be some flaws while completing it due to limited market knowledge and past
experience as a consultant. However, my contacts with market professionals and module leader’s
support has helped me to prepare professional company report. Different tools of analysis are used
in this report to identify the present situation of an organization, such as corporate governance
structure, risk management, ratio analysis and 5C analysis framework, that has helped to suggest
and propose some recommendations to increase or maximize shareholder value. Thus, in general,
my overall capabilities to work as a consultant has increased dramatically upon the completion of
this report which will largely benefit me in future.

3.0 My development of leadership and career accession

Achieving leadership position is not very easy, especially in this competitive era where each
individual strives to outperform other to gain higher position. Though, I believe that I possess
several leadership skills, such as communication, collaboration, vision, team builder, honesty,
integrity, problem solver, decision maker, etc., (Berke, Kossler, and Wakefield 2008); however,
there still remains some room for improvement to acquire more skills. Therefore, I should focus
more on developing leadership skills as it will help me in moving forward throughout my career.
Basically, leadership development is important as it helps to expand the individual capacity to
perform effective leadership roles within a company. These leadership roles aids in the execution
of an organization’s strategy by growing, winning mindshare and building alignment to make
others capable of accomplishing their objectives. Though, leadership roles are usually formal, with
the agreeing authority to take responsibility and make decisions. However, there could also be
some informal roles with no or very little authority such as directly, influencing teams, negotiating,
etc. It is important for me to acquire the necessary skills to successfully play formal and informal
roles to maximize my leadership skills (Al Bolea and Atwater 2015). The assessment of my
leadership competencies, skills, capabilities and experience is also analyzed previously through
personal SWOT and Johri Window that also identifies some of my weaknesses that are important
for a leader to possess. Therefore, I need to develop those skills by focusing on and undertaking
different programs that could benefit me in acquiring leadership skills and expertise as a
 29

consultant. This will provide me long term benefit while offering me countless opportunities to
grow in my career. However, to do this, I will need to achieve the following objectives:

 Acquire leadership training through enrolling in different courses that offers leadership
developmental programs. These courses are usually offered by academic and professional
institutions
 Work as an intern in different consultancy organizations to learn and grow in the right
direct, i.e., my field as a consultant. This will provide me with an opportunity to work
directly under leaders in the field of consultancy where I can learn more through on-site/
on-shore learning programs and activities.
 Acquire higher academic qualification, such as DBA, to increase my learning and possess
vast knowledge and its applications in professional life.
 Acquire certificates and enroll in training programs to increase communication skills.
 Collaborate and coordinate with market professionals to acquire extensive market
knowledge. This will help me to have broad vision with improved decision making and
analytical skills.

Thus, it is important for me to undertake above identified activities (as ongoing) to professionally
develop and grow as a leader and achieve success throughout my career.
 30

References
Al Bolea and Atwater, L 2015, Applied Leadership Development: Nine Elements of Leadership
Mastery, Routledge

Berke, D, Kossler, ME and Wakefield, M 2008, Developing Leadership Talent, John Wiley &
Sons

West, R and Turner, LH 2008, Understanding Interpersonal Communication: Making Choices in

Changing Times, Cengage Learning