Whether you prefer a quick chicken sandwich from KFC or you prefer fresh french fries from McDonald’s – fast food is an everyday staple of most households. McDonald’s is an American fast-food company that mainly focuses on fast food. It sells its product in 118 countries. It has over thirty-four thousand outlets.
The famous fast food restaurant was founded in 1940 as a restaurant owned by Richard and Maurice McDonald’s. The very first restaurant was in California, United States. A McDonald’s SWOT analysis helps understand how this globally recognized hamburger chain can stay on top of the restaurant hill. Take a look at McDonald’s strengths, weaknesses, opportunities, and threats.
A SWOT analysis of Mcdonald’s is a proven management framework that enables McDonald’s to benchmark its business & performance as compared to its competitors and the restaurant industry.
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McDonald’s – At A Glance
|Founded||May 15, 1940|
|Founders||Richard and Maurice McDonald|
|Headquarter||Chicago, Illinois, U.S.|
|Annual Revenue||$21.076 Billion (FY 2019)|
McDonald’s SWOT Analysis
A SWOT analysis of Mcdonald’s is a strategic planning frame that can be used by company managers to get a successful situation analysis of the company. A McDonald’s SWOT analysis framework can assist them to realize their internal strategic factors such as strengths and weaknesses, and also their external strategic factors such as opportunities and threats.
Mcdonald’s SWOT Overview Template
McDonald’s maintains its intimidating presence in the business sector only by reviewing the SWOT analysis regularly and improving itself. So, a McDonald’s SWOT analysis will be of great use to this company.
Strength of McDonald’s SWOT Analysis
McDonald’s has a plethora of strengths that will help it to thrive in the main field. A McDonald’s SWOT analysis will help to focus on these strengths. Some of these strengths are enlisted below:
Universal Franchise: McDonald’s is a worldwide multinational company. It is famous for its fast food in 118 countries across the globe. So, it has a great deal of a global footprint. This makes it more recognizable to the public and helps with its publicity. So, it can implement its global thinking with local execution. This means that it can pursue its ubiquitous goals and can still win the hearts of its consumers.
It is also the most popular for studies regarding fast-serving and fast-food restaurants. It is also the most commonly used brand name for college articles. These speak volumes about its popularity and fame. All of this helps them to gain new customers in an effortless manner. It is also effective in intimidating competitors.
Financial position: McDonald’s has a strong economic base. It has garnered a total of fast food. It has been gaining market slowly but surely for about 80 years. It has earned the public trust as a star company. Its financial position has it on a point of a pure advantage that increased its market value and brand name by leaps and bounds. In 2019, it earned a revenue of 21.98 billion dollars So this financially secure position does good for the company.
Large market share: McDonald’s is considered the largest player in terms of size and global reach. When Wendy’s or Burger King lost market share in 2006, Mcdonald’s was still increasing its market share. McDonald’s market share was recently around 19%, while Yum! Brands is 9% and Wendy’s and Burger King are 2%.
Mcdonald’s Win Plan – The customer-centric initiative: Mcdonald’s Win Plan provides a common framework for your global business, but allows for local customization. By implementing initiatives around the five elements of your plan to win: people, products, location, price, and advertising – Mcdonald’s has improved the dining experience for customers around the world, increasing sales and customer visits. This plan, combined with financial discipline, has produced solid results for the company’s shareholders.
Innovative technology: A SWOT analysis of Mcdonalds remains state-of-the-art worldwide; In Brazil, for example, McDonald’s is currently exploring the installation of Internet access terminals in some outlets, and in addition to allowing customers to order online, resulting in a more efficient process that reduces the waiting time between a customer’s order and order pick-up.
Specialized manager training: Mcdonald’s takes manager training very seriously. This company has its own program for professional management training, the Hamburg University. As a result, Mcdonald’s has many good managers who can support the company’s development well.
Early mover: Mcdonald’s is considered the first to enter the fast-food industry, initiates another brand to enter this industry. When they think of fast food, customers always remember Mcdonald’s first. In fact, in some large countries, particularly the US, SWOT Mcdonalds is the number one choice for many customers.
McDonald’s Weaknesses Analysis
Weaknesses are part of the internal factors of a company. A McDonald’s SWOT analysis will bring many of these to light.
Legal Action: McDonald’s was involved in a number of legal proceedings and other legal cases over the years. For example, there are many cases related to the trademark problem. McDonald’s rebranded many other restaurants and one-coffee-shop businesses. Due to the retention of the letters “Mc”.
Health Problem: Mcdonald’s uses Transfat and beef oil in their food. Though it’s not illegal, it affects badly on customer’s health badly as a result of Trans—fat is the cause of any reasonable cancer. Consequently, a variety of consumers who care about their health stopped eating at McDonald’s restaurants. It makes the revenue of the company decrease.
Imbalanced meals: Although Mcdonald’s tries to update its menu with healthy criteria, McDonald’s meals remain unbalanced, for example, there are many dishes with chicken (both grilled and fried), bacon, beef, ribs, or egg. Salad with vegetables and fruits, the number of fruits or vegetables is also not much.
High employee turnover: Although Mcdonald’s has many good managers and skilled employees, the turnover rate is still high. Many of his employees are laid off from restaurants every year. In addition, many others quit their jobs, especially part-time workers because of low salaries and excessive work pressure.
Dissatisfied Franchisees: Franchisees are getting very dissatisfied with the fees McDonald’s is putting on them, and as the company continues to expand, they are also increasing the fees franchisees have to pay for using the infamous brand of fast food. People are not very happy about it and many franchisees are selling their businesses as a result.
Opportunities for McDonald’s in SWOT Analysis
The opportunities are outside factors of a company that they can exploit for profit and benefits for themselves. A McDonald’s SWOT analysis will help the executives to contemplate them before their next big move.
Digital Marketing: Today’s world is talking about digital marketing and it has driven many leading brands around the world to increase their market share and sales. McDonald’s is also increasing its competitive advantage by dedicating itself to being digital. Mcdonald’s is already using important digital channels for marketing purposes.
In addition to the various social media platforms, other digital marketing channels include corporate websites, loyalty blogs, and marketing. Digital marketing can make the brand accessible to many. McDonald’s uses digital technology for employee engagement, engagement supply chain management, and franchise management.
Focus on Asian markets: The Asian market offers enormous business opportunities. In countries like China, Singapore, Malaysia, and other Asian countries, there is a great demand for fast food in the current generation. Many people prefer a quick bite. Asian countries have flourished in recent years, increasing the purchasing power of middle-class customers, so McDonald’s should find various strategies to increase its entry into Asian markets, which would increase the brand’s customer base and income.
Diversification of menu items: While McDonald’s is known for its burgers and fries, the company has already expanded its menu to include salads, smoothies, and other healthier options. McDonald’s could continue to diversify its menu to appeal to a wider range of customers, including those who are more health-conscious.
Embracing new technologies: McDonald’s has already implemented some technology solutions, such as mobile ordering and delivery. The company could continue to invest in new technologies, such as self-order kiosks or artificial intelligence-powered recommendations, to enhance the customer experience and streamline operations.
Partnership and co-branding: McDonald’s could form strategic partnerships with other brands to expand its reach and appeal to new customers. For example, the company could partner with popular food bloggers, celebrities, or other influencers to create new menu items or marketing campaigns.
Sustainable practices: There is a growing consumer demand for sustainable and environmentally friendly practices. McDonald’s could continue to invest in sustainable packaging, recycling programs, and energy-efficient operations to appeal to customers who prioritize sustainability.
McDonald’s Threats in SWOT Analysis
The Impact of the Pandemic: This is the time of pandemics. McDonald’s is one of the leading companies in the consumer goods department. Even though this pandemic has failed to make any big impact on the sales figure, that does not mean that the magnitude of the situation is any less. This pandemic has affected the manufacturing, distribution, and purchasing of McDonald’s products. This has fueled major changes in McDonald’s business strategies.
More reliance on franchises: McDonald’s business model is more dependent on its franchises, which primarily run about 90% of McDonald’s business. McDonald’s business has been stable so far, franchise problems keep cropping up on franchise units. There would also be additional control. If the franchise does not cooperate and its financial performance is not too good, it becomes difficult for the company. Sometimes executing the main campaign or a major strategic decision would be difficult without a franchise recognized. Hence, the overall role of the franchisee, in general, becomes critical and important in order for the company to run its franchisee well.
Intense competition: McDonald’s faces intense competition from other fast food chains, as well as from non-traditional competitors such as meal delivery services and food trucks. The company needs to constantly innovate and improve its menu offerings, customer service, and technology to stay competitive.
Changing consumer preferences: Consumer preferences are always changing, and McDonald’s needs to keep up with these changes to remain relevant. For example, there is a growing demand for healthier and more sustainable food options, which McDonald’s needs to address to appeal to a broader customer base.
Economic factors: McDonald’s sales and profits are affected by economic factors such as inflation, unemployment, and changes in disposable income. McDonald’s needs to be prepared to adapt to economic changes, such as by adjusting its pricing or menu offerings.
Government regulations: McDonald’s is subject to a range of government regulations, such as food safety laws, minimum wage laws, and environmental regulations. Changes in these regulations can have a significant impact on the company’s operations and profitability.
Negative publicity: McDonald’s has faced negative publicity in the past related to issues such as food quality, labor practices, and the environmental impact of its operations. Negative publicity can harm the company’s reputation and lead to a decline in sales. McDonald’s needs to be proactive in addressing these issues and maintaining a positive public image.
McDonald’s Competitors in SWOT Analysis
Burger King, Wendy’s, Taco Bell, Subway, KFC, and Arby’s are McDonald’s top competitors, according to a SWOT analysis. These restaurants all have a sizable presence in the American fast-food market and provide comparable menu selections. In terms of cost, accessibility, comfort, and quality, McDonald’s must compete with these eateries. Additionally, McDonald’s competitors in SWOT analysis in restaurant chains have heavy rivals like Chipotle, Panera Bread, and Chick-fil-A which have healthier menu options.
McDonald’s SWOT Analysis Overview Template
Conclusion & Recommendations for McDonald’s
Here are some recommendations for McDonald’s to improve their market game from the experts:
- Improving the health and safety of the company’s employees.
- Enhancement of the people by a long shot.
- Encourage the workers to be creative
- Lifting the team morale by achieving the team goals.
- Continue to innovate and improve menu offerings: With increasing competition and changing consumer preferences, McDonald’s needs to continue to innovate and improve its menu offerings to stay relevant. This could involve expanding its healthier menu options, introducing new and exciting products, and exploring food trends.
- Invest in technology: To enhance the customer experience and streamline operations, McDonald’s should continue to invest in technology. This could include self-order kiosks, mobile ordering and payment, and artificial intelligence-powered recommendations.
- Focus on sustainability: As consumers become more environmentally conscious, McDonald’s should prioritize sustainability in its operations. This could involve investing in sustainable packaging, recycling programs, and energy-efficient operations.
- Strengthen partnerships and co-branding: To expand its reach and appeal to new customers, McDonald’s could form strategic partnerships with other brands. This could involve collaborating with influencers, co-branding with popular food and beverage companies, or partnering with local businesses.
FAQ’s for McDonald’s SWOT Analysis
What is the weakness of McDonald’s?
*Health Concerns: McDonald’s has faced criticism for its menu items being high in calories, sodium, and saturated fats, which can contribute to health issues like obesity and heart disease.
*Dependence on Franchisees: McDonald’s operates a significant number of franchise outlets, which can lead to issues in maintaining consistency across locations and may create challenges in quality control.
*Competition: The fast-food industry is highly competitive, and McDonald’s faces constant pressure from rivals, leading to the need for continuous innovation to stay relevant.
What is McDonald’s negative impact?
*Environmental Concerns: The massive scale of McDonald’s operations results in a significant environmental footprint, including packaging waste and greenhouse gas emissions.
*Labor Practices: McDonald’s has faced scrutiny regarding its labor practices, with allegations of low wages and poor working conditions in some locations.
*Cultural and Globalization Issues: Some critics argue that McDonald’s global presence has led to the homogenization of cultures and the promotion of unhealthy eating habits worldwide.
How can McDonald’s improve?
*Healthier Menu Options: McDonald’s can continue to expand its menu with more nutritious choices, catering to health-conscious consumers and offering options for various dietary preferences.
*Embracing Technology: Investing in technology to streamline operations, improve customer experience, and integrate with food delivery services can keep McDonald’s competitive in the modern market.
In conclusion, it can be said that a steady line of profit and global reach are the key strengths of McDonald’s. As for its greatest weakness, that would be ELEPHANT. It may not look like much, but it is a huge load to carry.
A McDonald’s SWOT analysis helps the company in many different ways. Only because it would allow the executive directors to theoretically take apart the company’s strategic approach to this day and scrutinize them.