Question

- Discuss the SWOT analysis of McDonald's briefly (IT)?

Answer 1

Strength

Powerful brand name and status – Brand equity of McDonald's is very high. This American based fast food company is located in 36,900 locations worldwide. It’s a recognized brand worldwide and it is among top ten global powerful brands.

Hefty market share – McDonald's is one of the largest companies in terms of size and reach. As per the recent market report, the net income of McDonald's is US$4.686 billion which is quite hefty than its competitors like Wendy and Burger King.

Dedicated and Global training for employees – McDonald's is quite dedicated towards the training of employees, especially managers, globally. The company has set its own training program known as Hamburger University.

Plan to Win – A customer-centric programme ‘Plan to Win’ provides global business policies along with local policies adaptation worldwide. They are taken into consideration the 5P’s principle – People, Products, Place, Price, and Promotion for enhancing the experience and product range. This has helped in company’s growth over the last decade.

Self-production plants – McDonald's is one of the brands who has maintained same quality globally despite worldwide diversity. It is the first choice of customers in several countries.

Innovative technology – McDonald is focussing on technological innovation for its products globally. Usage of various cooking machines for a similar quality of food globally. Online food customization and delivery were initiated which was way ahead of its competitors.

Effective marketing strategies – McDonald focuses particular market for a promotion like spicy burgers in the Indian market, Happy Meal for children, etc. This is due to their strong marketing analysis team and strategies.

Weaknesses

Injurious food image – McDonald serves fast foods at their restaurants that contain high calories and less nutrition. They use Trans-fat and beef oil in their food for cooking which has an adverse effect on health. Health cautious people are slowly stopped visiting fast food stores and hence decrease in customer count.

Strong competition – Due to highly competitive market, McDonald is facing strong competition in the market with the companies like Subway, Wendy’s, Burger King, etc and losing their customers who prefer other brands.

Legal action – The Company has faced multiple lawsuits and other legal actions. For example, there are several cases regarding the trademark issue.

High employee turnover rate – McDonald has a large number of skilled employees and managers. Despite this the company experience high turnover rate per year. Many employees are fired or they quit every year because of low pay grade and work pressure.

Environmental issue – it has been reported that McDonald's uses HCFC – 22 for making polystyrene which results in ozone layer depletion.

Dissatisfied Franchisees – Franchisees are quite dissatisfied with the payment terms with McDonald's. It has been reported that McDonald is forcing the franchises to pay huge payment to them. A recent example of dissatisfaction was the closure of 43 outlets in Delhi, India.

Opportunities

Fast growing industry – Fast food industry is developing rapidly. With the change in lifestyle and eating habits of people, the demand for fast food is high.

Preservation – McDonald should focus and research on environment-friendly energies and packaging solutions

Globalization – McDonald's has more than 36,900 restaurants worldwide and it is still growing. With the entry of McDonald's in cultural countries like India and China, they have expanded the product line and there is great potential in the market.

Low-cost menu – The main attraction of food at McDonald's is low cost and quality food. It is need of the market and people are attracted towards it.

Offers and discounts – Several discounts offers and freebies are offered that attracts more customers and rapid growth in customer’s satisfaction and thus brand loyalty.

Diverse taste – McDonald is satisfying the need of customer through variety in the product line. They are offering a variety of vegetarian an non-vegetarian food.

Threats

Powerful competitors – With the development of fast food industry, the growth and development of companies in this industry is also increased and this has resulted in powerful competition in the market.

Public health – With a rapid increase in obesity and heart problems among people, public health is a big concern for any fast food company. They have to develop a new product line based on nutritious and healthy diet.

Economic recession – the recession has a negative impact on any industry and this industry is also affected.

Environmental issue – As explained earlier, McDonald's is still using HCFC-22. They have to plan for the environment-friendly approach.