McDonalds SWOT Analysis

Posted by Neni Manize



Strengths


  • It has a strong global presence and is considered as a market leader in both the domestic as well as the international markets.
  • It is a global brand that owns 31,000 restaurants serving in 120 countries. Of these 31,000 restaurants at least14,000 restaurants are situated in the US.
  • It uses economies of scale for reducing the cost, as its huge expansion diversifies the overall risk involved with the economic performance.
  • They own an active children’s charity by the name‘The Ronald McDonald House’.
  • It takes steps in adjusting the Ingredients and product offerings in order to comply with the upgraded health standards deemed necessary by the USDA.
  • It earns revenue by fast food sales as well as a property investor and a franchiser of restaurants.
  • It has a firm real estate portfolio.
  • It has branded menu items i-e Big Mac, Chicken McNuggets, which further promote McDonalds.
  • Its recognized as one of the world’s most recognized logos.
  • It is recognized as a socially responsible and community oriented firm.
  • It adapts to the cultural differences regarding the region where the restaurant is set up.
  • It has located itself in major airports, cities, highways, tourist locations, theme parks.
  • It has an efficient food preparation style that follows the process in a systematic way.
  • It takes food safety extremely cautiously.
  • It was the first to provide the customers about nutrition facts.


Weaknesses

  • It uses advertising that mostly targets children.
  • High employee turn-over.
  • It has yet to accomplish going on the trend of organic food.
  • Price competition with the competitors resulting in low revenue.
  • Lack of innovative products.

Opportunities

  • It can adapt to the needs of the societies and undergo an innovative product line.
  • It can research ways to use ‘green’ energy and packaging which will work as a part of their promotional effort as well as fulfill their social responsibility.
  • It can create new product offerings, use mobile text messaging to offer services that appeal to consumers.
  • It can upscale some of its restaurant settings at luxurious locations to attract more customers.
  • It can provide optional items that are regarded to be the basis of allergy for some.
  • It can slow down the level of expansion in order to increase the profitability of the organization.

Threats

  • The recession negatively impacts the holding position of the firm regarding its revenue streams, even though they are quite diversified.
  • Foreign currency fluctuations are regarded to be a major problem as it uses standard pricing for its food items.
  • More restaurants that are increasing their food offering and declining the price.
  • Health issues regarding the fast food chain.
  • Heavy investments on promotional campaigns which decrease the gaining of market share.
  • Some parents criticize the firm’s ‘cradle to grave’ marketing strategy that focuses on kids, who later on take it as a trend to their adulthood.
  • Sued various times for unhealthy food, usually with addictive additives.
  • Emergence of major fast food competitors: Burger King, Starbucks, Wendy’s, Taco Bell, KFC.
  • The expansion has made the firm vulnerable to the slow economies of the other countries.

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