SWOT analysis of McDonalds
This is a McDonalds Corporation SWOT analysis for 2013
Company
background
Name
|
McDonald's Corporation
|
Industries served
|
Restaurants, Food
|
Geographic areas served
|
Worldwide
|
Headquarters
|
U.S.
|
Current CEO
|
Don Thompson
|
Revenue
|
$ 27.56 billion (2012)
|
Profit
|
$ 5.46 billion (2012)
|
Employees
|
1,800,000 (2013)
|
Main Competitors
|
Burger King Worldwide,Inc.,
Yum! Brand Inc., Subway, Wendy’s Company.
|
McDonald’s is the world’s leading fast food restaurant chain
with more than 34,000 local restaurants serving approximately 69 million people
in 119 countries each day. More than 80% of McDonald’s restaurants worldwide
are owned and operated by independent local franchisees.
You can find more information about the business in its official website or Wikipedia’s article.
You can find more information about the business in its official website or Wikipedia’s article.
SWOT
McDonalds
SWOT analysis 2013
|
|
Strengths
|
Weaknesses
|
1.
Largest fast food market share in the
world
2.
Brand recognition valued at $40 billion
3.
$2 billion advertising budget
4.
Locally adapted food menus
5.
Partnerships with best brands
6.
More than 80% of restaurants are owned by
independent franchisees
7.
Children targeting
|
1.
Negative publicity
2.
Unhealthy food menu
3.
Mac Job and high employee turnover
4.
Low differentiation
|
Opportunities
|
Threats
|
1.
Increasing demand for healthier food
2.
Home meal delivery
3.
Full adaptation of its new practices
4.
Changing customer habits and new customer
groups
|
1.
Saturated fast food markets in the
developed economies
2.
Trend towards healthy eating
3.
Local fast food restaurant chains
4.
Currency fluctuations
5.
Lawsuits against McDonald’s
|
Strengths
1.
Largest fast food market share in the world.McDonald’s is the
largest fast food restaurant chain in terms of total world sales (8%). It is
the second largest outlet operator with more than 34,000 outlets, serving 69
million consumers every day in 119 countries.
2.
Brand recognition valued at $40 million.Company’s
brand is the most recognized brand in fast food industry and is valued at $40
billion. McDonald’s is also famous by the Ronald McDonald clown.
3.
$2 billion advertising budget. McDonald’s spends on advertising more than
the next 4 fast food restaurant chains combined.
4.
Locally adapted food menus. The fast food chain is operating in many
diverse cultures where tastes in food are extremely different than those of US
or European consumers. Thus ability to adapt to local tastes is one of
McDonald’s strengths.
5.
Partnership with best brands. McDonald’s offers only most popular brands
in its restaurants, such as: Coca Cola, Dannon Yogurt, Heinz ketchup and
others.
6.
More than 80% of restaurants are owned by
independent franchisees. Therefore,
McDonald’s can focus more on perfecting its serving system and marketing
campaigns.
7.
Children targeting. The business successfully targets very
young children through offering playgrounds, toys with its meals and
advertisements.
Weaknesses
1.
Negative publicity. McDonald’s is heavily criticized for
offering unhealthy food to its customers, stimulating obesity and strong
marketing focus on very young children.
2.
Unhealthy food menu. Although McDonald’s tries to introduce
healthier choices in its menu, the menu is largely formed of unhealthy meals
and drinks. Such menu offering prompts protests by organizations that fight
obesity and hence, decreases McDonald’s popularity.
3.
Mac Job and high employee turnover. Mac Job is a low paid and a low skilled
job, which is often seen negatively by its employees. This results in lower
performance and high employee turnover, which increases training costs and add
to overall costs of McDonald’s.
4.
Low differentiation. McDonald’s is no longer able to
substantially differentiate itself from other fast food chains (at least not
enough to gain some market share) and opts to compete by price rather than by
additional features.
Opportunities
1.
Increasing demand for healthier food. While demand for healthier food increases,
McDonald’s could introduce more healthy food choices in its menu and reverse
its weakness into strength. McDonald’s is trying to seize such an opportunity
and soon plans to open only vegetarian restaurant in India.
2.
Home meal delivery. McDonald’s could exploit an opportunity of
delivering food to home and increase its reach to customers.
3.
Full adaptation of its new practices. McDonald’s has redesigned its logo and
restaurant design in 2006. In addition, it has introduced some new practices.
In a result, remodeled restaurants have seen 8-9% higher than average market
growth. McDonald’s should finish remodeling all of the restaurants and adapt
the best practices in them as soon as possible.
4.
Changing customer habits and new customer
groups. Changing
customer habits represent new needs that must be met by businesses. So far, the
company has been successful in introducing its McCafé, McExpress and McStop
restaurants to meet the changing customer habits and the needs of previously untapped
customer groups.
Threats
1.
Saturated fast food markets in the
developed economies. The
fast food market in the developed countries is already overcrowded by so many
fast food restaurant chains and this already proves to be a threat to
McDonald’s as it barely grew through 2012.
2.
Trend towards healthy eating. Due to government and various organizations
attempts to fight obesity, people are becoming more conscious of eating healthy
food rather than what McDonald’s has to offer in its menu.
3.
Local fast food restaurant chains. Local fast food restaurants can often offer
a more local approach to serving food and menu that exactly represents local
tastes. Although McDonald’s does a great job in adapting its own menu to local
tastes, the rising number of local fast food chains and their lower meal prices
is a threat to McDonald’s.
4.
Currency fluctuations. The business receives a part of its income
from foreign operations. The profits that are sent back to US have to be
converted into dollars and may be affected by the exchange rates, especially
when the dollar is appreciating against other currencies. In 2012, McDonald’s
profit was largely affected by appreciating dollar.
5.
Lawsuits against McDonald’s. McDonald’s has already been sued for many
times and lost quite a few lawsuits. Lawsuits are expensive as they require
time and money. And as McDonald’s continues to operate more or less the same
way, there is high probability for more expensive lawsuits to come.
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