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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

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

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