I. STATEMENT OF THE PROBLEM A.

MAJOR PROBLEM The McDonald’s Corporation chief executive officer who is Jim Skinner, his current strategy which is called “Plan to Win” that aims to open its stores in franchising.

II.

AREAS OF CONSIDERATION • Legal Challenges •

III.ALTERNATIVES The first alternative that the researchers have found is /are the • Diversification of the company - Diversification is the “meaning” and how? • Mergers and Acquisition - Meaning and how? • Economic Value Added - Meaning and how?? IV. ANALYSIS • Mergers and Acquisitions Pros: - creates enormous profit for a company and expose the business to a myriad of financial resources - (bankruptcy) saves the company and free up some much needed cash and credit - gains the equity in the target company merging two companies together - increase in sales/ revenues - venture into new business and markets - decrease competition - reduction of overcapacit in the industry - synergy of resources - enlarge brand portfolio Cons: - fear of terrorism - cyclical system - reduced competition and choice for consumers in oligopoly markets - price increases and job cuts - cultural integration/ conflict with new management

help in spreading their customer base .control of inputs leading to continuity and improved quality .take consideration the efforts required to run a business .losses may be incurred during market consolidation .spread risk Disadvantages .focused on value achievement by obtaining greater performances than cost of the attracted capitals .motivating managers .stressing the enterprise's ability gathering value by determining the invested capital cost and the correlation of the enterprise's profitableness with the level of the cost derived ..Lack of knowledge can backfire on all sides .ensure that at managerial level are well versed with process that needs to be followed for the company .adding management costs .provides signal to the capital market that the management is focused on 'shareholders' value maximization .gives the opportunity to identify and isolate the value creators and value destroyers -helps in honing both in investment and disinvestment strategies of the firm .enhance the product portfolio of the company by introducing complimenting products .(concentric) help in leveraging the new products to that brand .negative synergies .provide movement away from declining activities .result in slowing growth in its core business .hidden liabilities of target entity • Diversification .adding bureaucratic complexity .going against the core values of the company limits the options Economic value added .control markets by guaranteeing sales and distributions -take advantage of existing expertise--> expanding into new activities .achieve their potential in a developing economy .orientating the management decision company’s towards creation of value for shareholders • Advantages of EVA ..provide better risk control .

html http://www.com/article/212707-mcdonald-s-ceo-skinner-s-plan-to-win http://www. (flow variable and depends on the ongoing and future operations) .scribd.ro/anale/volume/2007/v2-finances-accounting-andbanks/133.all components do not grant a very objective evaluation without certain adjustments V.buzzle.com/doc/12376024/Advantages-and-Disadvantages-ofDiversification http://ezinearticles.scribd..measure of firm's economic profit (related to the firms’ value) Disadvantage: .com/doc/38482484/8/Mergers-Acquisitions-Pros-Cons .com/?Mergers-and-Acquisitions---The-Pros-and-Cons-BehindThem&id=4520602 http://steconomice.does not permit a very good comparisons between different sectors of the enterprise because it is not taken into account their dimension .pdf http://www.uoradea. CONCLUSION http://seekingalpha.not bound by GAAP (appropriate adjustments are made to evaluate) .can be calculated for divisions and even projects -measures the gauges performance over a period of time rather than a point of time.com/articles/diversification-strategy. RECOMMENDATION The researchers recommend that the McDonald’s company to … VI.scribd.com/doc/20308678/Economic-Value-Added-Analysis http://www.