Question

MGT 321 W18                         Written SWOT Analysis                                     40 Points

The SWOT Analysis Report is DUE ON the MIDNIGHT of 2^nd May 2018!

PLEASE UPLOAD YOUR WORD DOC in “Assignments” Link on CANVAS!

The written SWOT analysis is about the McDonald’s Corporation. All the information required for the SWOT analysis is in this document. The report should be not more than 3 pages, single spaced 12 point. THIS ASSIGNMENT MIRRORS TO SOME EXTENT THE SWOT ANALYSIS OF ROBIN HOOD WE DID IN CLASS – AND THOSE ABSENT IN THAT CLASS – PLEASE SEE SOME EXAMPLES POSTED ON CANVAS!

Please construct a SWOT Matrix for McDonald’s Corporation, and the assignment deliverables are explained in TWO Steps:

STEP 1:

1. List the McDonald’s key external opportunities.

2. List the McDonald’s key external threats.

3. List the McDonald’s key internal strengths.

4. List the McDonald’s key internal weaknesses.

You are required to complete the first FOUR steps listed above – from the following list of McDonald Corporation’s Strengths, Weaknesses, Opportunities & Threats:

Highly successful and recognized advertising. (I’m loving it)

Intense price pressure from competitors like Burger King, Taco Bell, Wendy’s, KFC and any mid-range sit-down restaurants.

International expansion into emerging markets of China, India, Brazil.

Core product line out of sync with trends toward healthier lifestyles for adults and children.

High employee turnover.

Strong Global Presence and an ability to weather local economic fluctuations.

Litigation

Many restaurants (60% in U.S.) have outdated appearance. Remodeling can yield cozier, upscale setting, and upgrade the image.

Consistently solid financial performance: Gross margins (36.7%) and net profit margins (18.2%) above industry averages; Sales revenue up 3.3% in 2008, global comparable sales up 6.9%: Net income up 80% in 2008.

Contamination of the food supply, especially e-coli, or Mad cow disease, could damage sales, reputation, etc.

80% of restaurants are franchise owned, placing image and reputation in other’s hands.

Respond to social changes by innovation within healthier lifestyle foods.

Particularly vulnerable in older, established markets (US, EU) to upstarts offering healthier food offerings and more modern, high tech surroundings.

Uses pure ingredients and take food safety very seriously.

Over-saturation of real estate in the US.

Low fat, low calorie, healthy hamburger – Could be first on market.

Sales demonstrates seasonal effects.

Strong innovation and product development.

Brand equity at risk: 80% of restaurants owned by franchisees.

Diversify portfolio (like it did before divesting Chipotle, Boston Market).

Assembly line approach makes it difficult and costly to adapt to changing trends.

Strongest Brand Image as the number-1 fast-food company by sales, with more than 32,000 restaurants in 118 countries.

More health conscious customers.

Breakfast not available at 25% of locations .

Struggles with fluctuations in operating and net profits: Operating profits $4,433M (2006), $3,879M (2007), $6443M (2008); Net profits $3,544M (2006), $2,395M (2007), $4,313M (2008).

Recognized as a community oriented, socially responsible company.

Subway and YUM! Brands expanding into developing markets at a higher rate.

Joint ventures with retailers (Walmart, etc.) can place new locations in high traffic areas at lower capital cost.

Company owns a large real estate portfolio.

Lowest Customer satisfaction rating in the industry.

Global economic recession causing consumers to spend less .

Increased beverage options (Gourmet coffees) have been shown to increase customer visits in Europe (+7.2%).

Strong Investor Reputation.

Foreign currency markets are volatile and 70% of McDonalds operating revenues are in foreign currency.

Markets in US and EU are mature and saturated.

Continued focus on corporate social responsibility, reducing the impact on the environment and community linkages.

Economies of Scale – Nearest competitor in U.S. is half McDonald’s size.

Negative public opinion campaigns:

Anticipated 4% growth rate in Quick Service Restaurant industry.

Strong employee training and promotion mostly from within.

STEP 2: Match these Strengths, Weaknesses, Opportunities & Threats and propose AT LEAST THREE - SO, WO, ST, WT Strategies for McDonald’s Corporation. In particular write a paragraph explaining each of these four sets of strategies:

5. Match internal strengths with external opportunities and record the resultant SO Strategies.

6. Match internal weaknesses with external opportunities and record the resultant WO Strategies.

7. Match internal strengths with external threats and record the resultant ST Strategies.

8. Match internal weaknesses with external threats and record the resultant WT Strategies.

AND THEN FINALLY WRITE A SMALL PARAGRAPH WHICH STRATEGY WOULD YOU RECOMMEND AND WHY?

Answer 1

1 Mc donald's key external opportunities:

1. International expansion in different countries such as china, vietnam, india.

2. highly global integriety by offering high standard quality product or healthier lifestyle food to the customers .

3. It offers product at the price according to the economy of the country or cheaply and quickly.

4. It as of now opened more than 30000 thousand restaurant in more than 120 countries.

5. to ensure the Uniformity , all franchise follows the standard such as cooking, menus, design , layout, recruitment etc.

2. Mc donald's External threat :

1. It offered Breakfast only in 20 % of the outlets.

2. MArkets in the US and europe are oversaturated.

3. Contaiminated food supply such as mad cow disease, E- coli would damage reputation,and sales.

4. competitors like KFC, wandy's, burger king also offered at attractive prices in the developing countries.

5. Most The outlets in the U.S and U.K are outdated.

3. McDonald's Internal Strength:

1. Offered high quality product such as pure ingriedents, low fat, low calories to the health conscious customers, Price fluctuate according to the Economy of the country, which is easily affordable.

2. They focussed on corporate social responsibility and environmental stability .

3. Promotional activities had played a mazor role in the marketing mix such as cinema, t.v, press advertisement etc which spread the messages about the quality of the product ingrdients.

4. Mc donald's brand name and the trademark the golden arch are recognized in the whole world.

4. Mc donald's Internal Weakness:

1. Negative public opinion campaign.

2. High Employee Turnover.

3. 80% of restaurants owned by franchisees where the brand equity may affect.

Step 2. Match internal Strength and external oppotunities:

It sold the same products and achieved the same quality of standardisation of the process and great attention to the cooking system, menu , division of labour which enhanse high turnover from the international market which enhanse economies of scale.

6. Match Internal Weakness and external opprtunities:

As the franchises owned 80% of the restaurant where brand equity may suffer on the same time the success and profitability of McDonald's are unable to seperate the linked to the success of the franchises .

7. Match Internal strength and external Threat:

Offered high quality product such as pure ingriedents, low fat, low calories to the health conscious customers, Price fluctuate according to the Economy of the country, which is easily affordable whereas Contaiminated food supply such as mad cow disease, E- coli would damage reputation,and sales.

8. Internal weakness with External threat:

High Employee Turnover where lot of time spend on intensive training were given to the employees on the other side the  competitors like KFC, wandy's, burger king also offered at attractive prices in the developing countries.

Recommendation;

In mc donald the relation of the franchaisor, franchisee and supplier are strong. still i believe that the relying on their franchise for the sourse of income and profitability is not so fruitful. also the retaining the employees for long term as they offered ongoing training relevant to their position and to promote them when they are ready. it helps in the success of the firm.