McDonald’s SWOT Analysis analyzes, McDonalds, an American fast-food chain has become a hub of happiness for all the food lovers out there! It dominates the world of fast food by being the world’s 9th most valuable brand. With branches in over 120 countries, McDonald’s has left its footprints everywhere. In the present, McDonald’s Corp. is one of the top ten global brands that operate thousands of franchises across the globe including Australia, Canada, France, Germany, the United Kingdom, China, Italy, Korea, Poland, Russia, Spain, Switzerland as well as Switzerland, the Netherlands and many more countries around the world.
Did you know? McDonald’s is one of the biggest manufacturer of toys worldwide Make sure you remember the toys come with every delicious meal!
McDonald’s is among the most well-known fast food chains in the world. The American food establishment was created 75 years ago, in 1940 through the two brothers Richard and Maurice. The very first McDonald’s stand was one that was a BBQ restaurant that was established at San Bernardino, California. Over the course of eight years it converted into a fast-food eatery and later purchased from Multimixer Salesman Ray Kroc. He launched an initial franchise with Des Plaines, Illinois, changing it into a legitimate business slowly.
This can only be achieved through a firm with extensive knowledge, experience and innovative strategies. To determine the strengths of the company potential, weaknesses, opportunities and threats, it is necessary to conduct a SWOT analysis by McDonald’s.
McDonald’s At A Glance – McDonald’s SWOT Analysis
Company: McDonald’s Corp.
Founders: Richard McDonald’s | Maurice McDonald’s
Year of establishment: 1940
CEO: Chris Kempczinski
Headquarters: Chicago, Illinois
Employees (Dec 2020): 205,000
Ticker Symbol: MCD
Annual Revenue (Dec 2020): US$20.8 Billion
Profit net income (Dec 2020): US$5.8 Billion
Products & Services: Fast food and beverages | Fast Food | Burgers | Chicken & Sandwiches | Combo Meal | Desserts & Shakes | McCafé® Drinks | McCafé® Bakery | Snakes & sides
Company Website: www.mcdonalds.com
McDonald’s SWOT Analysis – SWOT Analysis Of McDonald’s
SWOT Analysis Of McDonald’s analyzes the brand based on its strengths weak points, weaknesses, opportunities, and threats. With McDonald’s SWOT Analysis it is clear that the advantages and disadvantages are internal factors, while threats and opportunities are external elements. Here we are going to talk about McDonald’s SWOT Analysis. Below Is The Detailed SWOT Analysis Of McDonald’s.
McDonald’s Strengths – McDonald’s SWOT Analysis
1. Tenth Most Valuable Brands: McDonald’s is ranked as the tenth most valued name in all of the globe. With a staggering brand in terms of value, it is a leader in the industry of restaurants despite the intense rivals.
2. Tasty Food: McDonald’s French fries can be regarded as the most delicious fries of the fast-food market. McDonald’s French fries have been rated as the most delicious fries according to customer surveys.
3. McDonald’s – A Real Estate Company: Most people don’t know that in addition to selling burgers or fries McDonald’s owns a huge real estate business worth billions of dollars. It is a dream to own thousands top McDonald’s locations across the world. As of April , 2020 21 837 franchised McDonald’s restaurants among 38,695 McDonald’s establishments located across 120 countries. The remainder are operated by corporate restaurants. McDonald’s franchise is a little different. McDonald’s not only offers their trademark ingredients, recipes, and processes to franchisees, but also is the owner of the land and acts as a landlord. They also earn income by renting out the land.
4. Technology Initiatives: McDonald’s is taking on revolutionary technology initiatives to help make their “Experience of the Future” dream come to life. Initiatives such as implementing self-service through kiosks mobile ordering as well as payment methods are enhancing McDonald’s image as the ‘restaurant of the future.’
5. Technology Acquisitions: The latest acquisition made by the company ‘ Dynamic Yield is yet another step toward more personalized and personalized marketing as well as customizations. Dynamic Yield is an Israeli startup that helps companies like McDonald’s to improve their customer experience through personalized offerings from brands.
6. Highest Brand Value in Fast Food Brands: McDonald’s has the distinction of having the highest-valued fast food company around the globe. In the year 2019 McDonald’s brand value grew by $130.37 billion from $126.04 billion in the year prior. The other fast-food brands were not even as good as McDonald’s value, with a brand’s value just shy of $44 billion, which is the same as Starbucks.
7. Improved Quality Control and Health Protocols: It is possible to debate the flavor and overall experience however McDonald’s high quality standards have always been its main strength. McDonald’s adheres to strict food safety and quality standards before purchasing ingredients from intermediaries that are third party. Recently, McDonald’s began restricting its use of most valuable Human antibiotics. The policy was formulated in the World Health Organization (WHO) as “highest priority critically important antimicrobials” (HPCIA) for human medicine in its global supply of chickens since 2018. It is well-liked by a variety of groups in the field of public health and consumer advocacy because it’s a fantastic attempt to protect against deadly superbugs from spreading.
8. Leading quick-service restaurant: In the year 2019, McDonald’s was the most popular QSR (QSR) company across the United States with sales of $40.41 billion. McDonald’s is way ahead of the second-placed Starbucks which made $21.38 billion of sales during FY2019. This is more than half what Starbucks achieved during the same time.
McDonald’s Weaknesses – McDonald’s SWOT Analysis
1. This is the Franchise business model: McDonald’s is the most exemplary model of international franchising. However, the complex web of franchised and owned by companies restaurants puts the brand at risk to a variety of risks. The dangers of financial decline and mismanagement, dissatisfaction with customers and a low rate of revenue generation. The company is heavily dependent on franchises that operate independently, which means they do not have control over their day-to-day performance, yet it impacts its brand in a direct way.
2. Supply chain disruptions: McDonald’s as one of the largest food chains has issues because of disruptions throughout the supply chain. Additionally, it restricts the availability of certain products that are essential for the business. Thus when a franchise is affected by these interruptions, its operating expense rises which leads to lower revenues and lower profits.
3. Lack of Employee Satisfaction: Because of the recent employee-rights revolutions across the globe and increasing wages, many companies are facing adversity from employees. Recently, McDonald’s has been subject to a hefty backlash from their employees. The employees participated in numerous protests and strike in protest of the need to raise their minimum wage up to $15 per hour which has caused the company’s reputation to suffer.
4. McDonald’s Breakfast Menu Has Lost Its Charm: For the past 10 years, McDonald’s breakfast sales remained unbeatable, especially within the US. In May 2018, however the CFO of the company admitted that they were experiencing a decline in McDonald’s breakfast menu and needed to take action to correct the issue. With such a intense competition breakfast, it’s unlikely to be an easy task to gain popularity of breakfast food.
5. CEO was terminated for violating company policy: In November of this year, McDonald’s CEO, Steve Easterbrook was dismissed after having a conscientious relationship between an employee. This was in violation of the company’s policy. In addition The company’s board declared the following: Steve has “demonstrated poor judgment.”
6. Poor Employee Safety: In May of 2020 five employees filed a lawsuit against McDonald’s for not following the safety guidelines of the government. The lawsuit claims that McDonald put at risk the life that its workers as well as their families due to its failure to provide gloves, hand sanitizers and masks during the current health crisis.
7. Sexual Harassment: Employers are required to create the safety of every employee, no matter their gender. In a suit filed by more than 100 employees who are female in April of 2020 McDonald’s has been accused of creating an unwelcoming workplace and subjecting employees to sexual harassment. The lawsuit undermines the trust of employees and damages its reputation further.
8. Negative Publicity: In June of 2020, McDonald’s has been in the news for dismissing an employee who was suing the company for failing to provide protection to employees in the wake of the health crisis. The decision to terminate the employee is unprofessional as it attempts to dissuade employee from exercising their rights to seek legal recourse with their company.
McDonald’s Opportunities – McDonald’s SWOT Analysis
1. Value Meals: In the year 2018, McDonald’s introduced the ” $1, $2, $3″ menu as well as ” 2 for $5 Mix and match deal” targeted at the value-conscious customers. The menu proved to be a hit expansion, which led to increased sales.
2. Innovative Products: McDonald’s should make efforts to bring new, original products to convince customers to prefer them over new fast food chains. In the year 2018 the company began serving a special drink called MIX served by Sprite Tropic Berry at its New York outlets. It quickly became a hit and is expected to be served throughout the US. The launch of additional items similar to this in line with the geographic circumstances and cultural context can aid in helping McDonald’s retain their popularity for an extended period of time. The launch of additional items similar to this in line with the geographic circumstances and cultural context can aid in helping McDonald’s retain their popularity for an extended period of time.
3. Global Expansion: McDonald’s is the dominant company in the US However, it’s more often the case that it has a difficult time in international markets. But, the company has the potential to expand its expansion across the globe by focusing on international markets, rather than different states in America.
4. Rebuilding the Brand Image: As fast-food eateries struggle to combat the stigma of “junk-producing centers,” McDonald’s could be able to do it well by pursuing its aggressive strategies toward healthier and customized menus. The changes have begun to make progress in the form of positive comparable sales that have led to a rise in profit. The new franchising plans will surely push sales to the back of the line but in the end the positive image of McDonald’s will continue to create greater distinctions.
5. Orders made via mobile and Delivery: McDonalds has announced an agreement together with UberEATS and Door dash for US food delivery. These delivery and mobile order initiatives assist McDonald’s to better meet the ever-changing requirements of its customers.
6. Offer Healthier Options: Consumers are increasingly looking for healthier alternatives. Although McDonald’s offers healthy options such as salads and low fat 1% Milk Jug but the choices are extremely restricted. McDonald’s could expand the variety of healthy choices to appeal to more health-conscious consumers and expand.
7. Expand Drive-Ins, Pick-Ups, and Self-Order Kiosks: McDonald’s priority of providing the most enjoyable dining experience in its restaurant was a major flaw in the wake of the current health crisis. This approach led to an 17% decrease in revenue because more customers chose for deliveries and pick-ups that can be eaten at home. McDonald’s could increase delivery as well as curbside pick-ups, self order kiosks, and drive-thru choices to increase the number of customers it serves during this challenging moment.
McDonald’s Threats – McDonald’s SWOT Analysis
1. Risky Investments on Technology Initiatives: While the revolutionary changes made by McDonald’s are a bright spot however, investing in technology is uncertain. The rapid pace at which the public is adapting technology may reduce the investment return, and the outcomes of improving customer experience might not bring the expected results.
2. Competitive and fierce competition from competitors such as Chick-Fil-A: You might believe that the burger giants such as “Burger King” are McDonald’s only competition however, the tables are getting ready to change. Recently, Restaurant Business revealed that Chick-fil-A has become McDonald’s largest rival in the highly fiercely competitive Quick Serve Restaurant (QSR) sector.
3. Cultural threat when operating in different Countries: As a fast-food chain that is global, McDonald’s has often faced numerous cultural challenges in various areas of the globe which have damaged the image of the company. It is also difficult to adjust and operate in a different manner in accordance with the region that the company operates. For instance, some time ago, McDonald’s faced quite a huge scandal due to the use of ingredients that were not considered Halal and halal’ in Muslims countries. These controversy can make it difficult for McDonald’s to keep up with expectations of customers with inherent risks in the global operating environment, and thereby affecting the image of the brand.
4. New Age Fast Food Trends: McDonald’s typically for young people is regarded as an old-fashioned restaurant with its classic menu and tasty. In this scenario food chains like shake Shack and Wendy’s benefit from their frequently experimental menus and dishes to offer a the variety. For instance, McDonald’s failed to compete with Wendy’s ” Signature-Crafted Burgers.” therefore, McDonald’s was forced to stick with its traditional Quarter Pounders in order to avoid a bad rap.
5. Constant Environmental Concerns: Like all other food giants, McDonald’s face immense pressure to make improvements to its methods to reduce waste that causes environmental pollution. The increasing environmental concerns require McDonald’s to be proactive to address this issue and be an example to other food establishments, but it’s not so simple. In March of 2018 environmentalists suggested to that the Board of Directors at McDonald’s to stop the use of straws made of plastic in more than 37,000 of its restaurants across the world due to the soaring amount of pollution from plastics.
6. Economic Uncertainty: For the quarter that began in January of 2019, McDonald’s reported a loss that was not in line with its estimates for the period due to economic uncertainty. The result was the loss of 4% on the market value for its stock. The value could be even lower when economic uncertainty lasts longer.
7. The Rise in Health-Consciousness: Many consumers are embracing healthier lifestyles and shifting to healthier options such as organic shakes and salads. The problem is that the majority of products available on McDonald’s menu are not healthy, and could lose customers who are health conscious to healthier alternatives from competitors.
8. Tighter Regulations: The increase in the number of chronic diseases is burdening several nations. Some countries have passed laws to restrict the consumption of certain substances that are unsafe or to ban fast-food chains.9 countries have prohibited McDonald’s including Iceland, Macedonia, Montenegro, Bermuda, and Bolivia.
McDonald’s SWOT Analysis Template
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