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Comprehensive S.W.O.T Analysis of McDonalds

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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. 

Through the SWOT Analysis of McDonalds, let’s understand how the most thriving food chain business of all time uses its competitive advantages to continue ruling the fast-food industry.

 

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About McDonalds

 

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McDonalds is an American fast-food corporation founded by Richard and Maurice McDonald in 1940. It began as a modest restaurant and has now grown to over 37,000 franchisees throughout the world.

The hamburgers and french fries at McDonalds are well-known. They also sell soft drinks, poultry goods, breakfast foods, sandwiches, and desserts, among other things. Salads, fruit, seafood, and smoothies have also been introduced to the menu in response to changing consumer tastes. Depending on the franchise location, it sells a restricted range of items.

Now that we are familiar with the brand, let’s dive straight into the SWOT Analysis of Mcdonals.

 

SWOT Analysis of Mcdonalds

 

The SWOT analysis is a process that a company undergoes to analyze the following aspects

  • Strengths,
  • Weaknesses
  • Opportunities
  • Threats

SWOT Analysis is a proven management framework that enables a brand like Mcdonald’s to benchmark its business & performance as compared to the competitors and industry. 

Following is the SWOT analysis of McDonald’s

 

1. Strengths of McDonalds

Strength shows the aspects where McDonald’s is strong at and in which aspects it competes with  competition 

 

  • Highest Brand Value

According to Forbes and Interbrand, McDonald’s brand is the most valuable brand in the world.  McDonald’s has built up huge brand equity. With a brand value of $150 billion, no other brand in the fast-food category is even close to McDonald’s. 

SWOT Analysis of McDonalds | IIDE

 

  • Technology innovation

Mcdonals is talking revolutionary technology to keep up with the market standards. Its acquisition of  Dynamic Yield is a step towards enhanced personalized marketing. It has also adopted Internet access terminals, to reduce the amount of lag time between the order and pick up of the order.

  • Delicious and Variety of Food items

Mcdonald’s fries are considered one of the tastiest froes in the fast-food world. Come on we all love it, don’t we? Apart from the existing menu, it keeps on updating its menu, by adding new items like coffees, smoothies, and Angus Burgers. 

  • Leading quick-service restaurant

According to Statista, Mcdonalds is one of the fastest-growing food-chain restaurants. This way it is the ability to attract more consumer base all over the world. The accounting for transactions of McDonald’s topped the chart with $38.52 billion in 2018.

 

2. Weaknesses of McDonalds

Weakness are the aspects where a company is weak and where a company needs to improve to sustain

 

  • High employee turnover 

McDonald’s has around 210,000 employees. However, the employee turnover rate is still high. Many quit their jobs, due to the low pay or high work pressure. Lack of employee satisfaction is causing the company reputational harm.

  •  The Franchise business model

The Franchise business model in fast-food restaurants comes with its disadvantages. This can expose the brand to certain risks, as they have no control over their day-to-day performance.

  • Supply chain

McDonald’s is one of the most popular fast-food chains in the world, it has the busiest food chain due to which it has to limit the availability of food items These interruptions result in more operational expenses and thus reduce profits

 

3. Opportunities for McDonalds

Opportunities are the aspects where a company can work before the competitors to get an added advantage to its side

SWOT Analysis of McDonalds | IIDE

 

  • Growth of the fast-food industry

This is one of those industries that have the potential to develop. Launching more items according to geographical conditions can help McDonald’s maintain their charm for a longer period. Due to a change in eating habits. Mcdonald is very popular in the US, it should prepare an international strategy to expand in Asian markets.

  • Low Cost

The low-cost menu can attract lots of new customers. Having a meal at Mcdonald’s is a kind of big deal for the middle class or lower-middle-class families.

  • Rebuilding the Brand Image

Currently, while everyone is focusing more on health and avoiding fast food as they are presented as junk food, while other fast food units are struggling with profits, McDonald’s can rebuild their brand as a Healthy fast-food chain to regain the trust of their customers

  • Home delivery

McDonald has started doing Partnership with Ubereats which helps them reaching to the customers and meeting the everchanging customer needs

 

4. Threats to McDonalds

Threats are the aspects from which a company need to be protective and to use the strengths to overcome them

 

  • High Competitions

We have seen above how Mcdonald’s faces fierce competition from national, international, and even local retailers of food products. Although Mcdonald’sMcdonald’shighest market shares, it only takes one strong marketing strategy to shift consumers from one brand to other. 

  • More Health-Conscious Consumers

Ever since the Covid wave hit us, more and more people are shifting towards a healthy diet. This change in eating habits can affect the revenue of the business. If Mcdonald’s wants to maintain its market share, it can up with more healthy food items. 

  • Cultural Preferences

While operating in different countries McDonald’s needs to make sure that they fulfil the cultural preferences in that particular country

For example, McDonald’s stopped selling beef products in India as Indians believe cows and buffaloes as spiritual animals

 

Now that we have analysed the SWOT Analysis of McDonalds let’s jump to the conclusion and recap what we have understood.

 

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Conclusion 

 

Mcdonald’s is a popular food chain of all times. It is well versed to make use of advantages and has the right strategies to capture the market. 

But despite the company’s continuous growth, it needs to keep in check the aspects which can cause trouble. McDonald’s will keep winning the market and hold to the first position in the fast-food industry if it continues to leverage its strengths.

Thank you for reading this case study on the SWOT Analysis of McDonalds. If you found this blog useful do share it with your friends and help them learn as well. To read more such blogs click here

 

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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