Today we will discuss about the McDonald’s swot analysis, we will take a look at strengths, weaknesses, opportunities, and threats of the world’s largest fast food chain brand.
Mcdonald’s is serving the best burgers to americans’ since 1940’s. Founded by Richard and Maurice McDonald’s in a city located riverside-San Bernardino, California. They kicked off by selling hamburgers at the stand. When Ray Kroc see their systematic way of making the burgers in the year 1955. He joined them as the franchise seller and after some years he purchased the restaurant from the McDonald brothers.
In the year 2014 it had 36,528 restaurants in 119 countries with almost 4,20,000 personnel employed, serving locally-relevant food and drinks at an affordable price. The food menu includes a variety of burgers(Veg and Non-veg), starters(Chicken mc-nuggets, French Fries, sandwiches etc.), ice cream and shakes. Mcdonald’s have qualified independent vendors which supplies the raw material to the franchise. Vendors have to stick to the policies to qualify for the hygiene and taste.
Mcdonald’s works on the franchise model, In 2014, 81% of the McDonald’s outlets were owned and operated under the franchise model. It generates cash at multiple levels first for at each and every product sold the McDonald’s get a royalty share, they charge a franchise fee from the owner in turns they give them equipment and decor items interior and exterior. The place is owned or rented by McDonald’s itself. Owner is just an employer of the restaurant he generally looks after the staffing. The prices of the items is decided at the company level.
Strengths of McDonald’s
The company’s strength is focussed approach to capture a market and wide range of product development. That is totally the main factor that is contributing to the company’s success and make them a leader in this market segment. McDonald’s Strengths in the SWOT Analysis are as follows:
- It has a global brand presence in more than 120 Countries. That makes it the most recognizable brand in the industry after subway.
- It has a wide range of products, starting from burgers, smoothies, shakes, ice cream and snacks items vary from place to place.
- The variety of food weather you’re eating it in america or in europe the taste for both of them will be the same.
- It provides the food items according to the region, like in india the consumption of non-veg items are relatively low. So they have designed the different menu for vegans, it includes Mcveggie.
- One of the largest fast food chains in the world.
- Income of Mcdonald’s is diversified in 120 countries. That doesn’t make them to rely on one place for the earnings.
Weakness of McDonald’s
The McDonald’s weakness is due to the internal strategic factors and the competition in the market. They can be handled, if the company tries to tackle these in a strategic manner. McDonald’s Strengths in the SWOT Analysis are as follows:
- There is negative publicity about the products that mcdonalds sell are fast food and contains a high amount of fat, carbs, salt and sugar. Due to which there is the trend of obesity in children.
- The US market for the burger outlet is almost saturated. So McDonalds have to look for taking its product internationally to other countries, which involves cultural and economic challenges.
- The dividend growth rate has been slowing down there is potential for that the investors will opt out from the McDonald’s.
Opportunities of McDonald’s
There are an ample number of opportunities in the market which McDonalds can implement to get a sustainable development in the future. McDonald’s opportunities in the SWOT Analysis are as follows:
- There is an opportunity for the international expansion for Mcdonald’s.
- Can start the premium products at some of its franchise to check whether there is a change in the customer demand.
- Can start developing the supply chain for the related products in the market so that they can generate revenue from other segments as well.
- Can start selling the products which are giving health proposition to the customers.
- There is a lot of potential by designing the customer centric campaign to add value proposition to the brand.
- Focus on the opportunities to expand in the underdeveloped nations
- Use corporate social responsibility and reducing the impact on the environment and use it as a competitive advantage to attract the customers.
- Company can expand more in the caffeinated beverages industry and can be a direct competitor of starbucks in the caffeinated beverages segment.
- Propose a joint venture with the supermarkets to sell the franchise in there marketplace.
Threats of McDonald’s
- Government policy on banning ingredients such as MSG(Monosodium Glutamate).
- The competition in the market is very high, the market is more saturated and intensity of competition is high
- In the new product segments the company have to compete with the market leaders such as Starbucks and Subway.
- The customer nowadays are health conscious they are more lean towards the products which are healthy.
- Most of revenue of McDonald’s is dependent on the U.S. market so in the recession there might be trickle down effect on the revenue.