Comprehensive S.W.O.T Analysis of McDonalds

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.

About McDonalds

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.

Current News on McDonalds

• In recent times, a former chef at the burger giant, Mike Haracz, has shared another piece of advice that 10:30 a.m. might not be a good time to visit a McDonald’s as switching their food from breakfast to lunch.
• As Haracz says, the fact that all the cooking equipment remains the same. Others share their own experiences, required to ensure food safety while transitioning from breakfast to lunch.
• McDonalds has removed their all-day breakfast from the menu to simplify their operation, which they saw provided better speed of service and accurate order for customers. Mcdonald’s is evaluating bringing All-Day-Breakfast back to their menus.

Buyer Persona

SWOT Analysis of Mcdonalds

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. 

1. Strengths of McDonalds

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

• Technology innovation

Mcdonals is talking about 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 foods 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, McDonald 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 is 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 is 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

• 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, so 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 reach the customers and meet the ever-changing customer needs

• Offer Healthier Options

Mcdonald’s can offer healthier meal options as more people are becoming more aware of the downsides of fast-food meals.

4. Threats to McDonalds

Threats are the aspects from which a company needs to be protective and to use its 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’s market shares, it only takes one strong marketing strategy to shift consumers from one brand to another. 

• 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.

Failed campaign of McDonalds

What was the issue?

McDonald’s had a few campaigns in which it had failed one of them was “McDonald’s Arch Deluxe” in the 1990s, which was marketed as a sophisticated option but doesn’t resonate with customers. 

What backlash did the brand face?

The backlash as viewers didn’t find it as appealing as McDonald’s expected. The customer’s expectations about the food were not reached by McDonald’s in this campaign.

What did the brand do in this situation?

McDonald’s has made adjustments based on customers’ feedback and continues to regain and bring us new items with great taste.

Top 5 Competitors of McDonalds

• KFC has a list of secret herbs and spices that continues to be followed across 145 countries, with more than 8,00,000 team members. Their commitment to food, people, and the planet remains steadfast.
• BURGER KING is an American-based multinational chain of hamburger fast food restaurants. Its menu has expanded from a basic offering of burgers, french fries, sodas, and milkshakes to a large set of products.
• SUBWAY is a specialization of submarine sandwiches, wraps,  salads, and breakfasts for every taste. 
• STARBUCKS is the market’s high-quality coffee heritage and its coffee-growing communities are in the estates of Coorg and Chikmagalur- the birthplace of coffee in India. 
• PIZZA HUT is a place lunch buffet, with “all-you-can-eat” pizza, salad, desserts, breadsticks, and a pasta bar. It has replaced a red roof location with the new concept.

Conclusion 

Mcdonald’s is a popular food chain of all time. 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 that 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.

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