McDonalds SWOT Analysis (Updated for 2017)

Mcdonald's SWOT AnalysisA Mcdonalds SWOT Analysis is a fascinating read for all marketing students. Founded in 1940, McDonald’s continues to dominate the fast food market. The business was originally set up as a barbecue restaurant and was operated by Richard and Maurice McDonald. In 1948, the guys reorganized their company as a hamburger stand, using specific production line principles.

Today, McDonald’s is one of the world’s largest restaurant chains, serving over 68 million customers daily in 119 different countries across approximately 36,615 outlets. McDonald’s sells signature hamburgers, cheeseburgers, chicken products, french fries, wraps, breakfast items, soft drinks, milkshakes, and desserts. Following changing consumer tastes over the years, the business continues to expand its menu to include all kinds of extras including salads, fish, wraps, smoothies and even fresh fruit.

So that’s a bit of history on McDonald’s. Now let’s have a look at a SWOT Analysis for McDonald’s. We have updated the classic SWOT example with new content for 2017.

Strengths:

  • Brand – Undoubtedly, McDonald’s greatest strength is its highly recognisable brand name. Travel the world and you’ll struggle NOT to stumble across one of their restaurants. Most people associate McDonald’s with fast food and a few specific items such as hamburgers and their signature red and yellow French fries. Some even credit McDonald’s with changing the globe’s eating habits by introducing fast food at affordable prices. Forbes suggests that McDonald’s is the 9th most valuable brand in the world.
  • Market Share – McDonald’s consistently takes the lion share across the various segments that it operates within. One look at any trusted market share reports and you will see dominance across segments such as  franchise restaurants and company operate restaurants. McDonald’s is considered as the largest business in terms of size and global reach. Even when the likes of Wendy’s and Burgers King notably lost market share in 2006, McDonald’s continued to increase its market share. General market share of McDonald’s in 2017 is approximately 17% while Yum!Brands is 9% and both Wendy’s and Burger King is 2%.
  • Training – The art of training is serious business for McDonald’s. In fact, the business has its own bespoke training program to train managers known as Hamburger University. McDonalds is serious when it training managers. This company has its own program to train managers the most professionally, which is called Hamburger University. The business places emphasis on consistent operational procedures, service, quality and cleanliness. Hamburger University has become the business’ global center of excellence for McDonald’s operations training and leadership development. As a result, McDonald’s has become efficient at producing highly effective managers that deliver excellence.
  • Marketing – Regardless of continent, both children and adults know the infamous face of Ronald McDonald and he is synonymous with the gargantuan restaurant chain. The results of wonderful and effective marketing strategies. It is no coincidence, the McDonald’s management knows the market inside out through extensive market analysis and this results in much success around the globe. The marketing talent at McDonald’s is no secret and they pay top dollar to their marketing execs for good reason.

Weaknesses:

  • Poor Public Image – McDonald’s has been the subject of negative press for many years. For example, the documentary “Supersize Me” by Morgan Spurlock tells the story of how the business contributes to society’s obesity as well as other fast food chains. In fact, the documentary goes into the detail of how each McDonald’s meal provides large amount of calories but not too much nutrition. The business faces a real challenge in changing public perception.
  • Staff Turnover – Despite Hamburger University and the many good managers that continue to develop with staff training, the turnover rate of McDonald’s remains high. The business not only has a high firing rate but also fails to retain staff for long careers. Many members of staff will quit due to a combination of minimum salary and extremely hard working conditions during busy times of the year. More resignations means more training costs for the business.
  • Crowded Market – The fast food market continues to grow every year with new entrants offering a range of different tasty products to rival McDonald’s. Take Wahaca for example, a new Mexican chain offering delicious quick and easy street food that prides itself on healthy eating and a balanced diet. The value for money lunch options provides an genuine alternative for consumers. Other challenges in this particular industry include the rapid change in consumer tastes. McDonald’s is now competing with a huge range of different options including the likes of Burger King, Wagamama, Yo! Sushi, Subway, Nandos, Five Guys and many more. There has never been more choice for hungry consumers.

Opportunities:

  • Technology – Given McDonald’s spending power, the business can afford to invest in new technology that keeps them at the forefront of innovation. For example, McDonald’s is currently analysing the installation of internet access terminals in some outlets in Brazil. This would enable customers to order online. This will create a far more efficient process that will reduce the amount of time between consumer orders. The business has the capital to trial and test new technology and attempt to gain advantage over competitors.
  • Growth of Industry – The fast food industry continues to show signs of growth. The change of lifestyle has led to a change in consumer eating habits. Historically, a typical consumer would be a worker or drivers who may have had a busy day and didn’t have enough time to cook at home. Very often the choice would be fast food on their way back from work. Nowadays there is much more choice and convenience of 24:7 drive-thrus and the launch of new food delivery services such as Uber Eats. It’s never been easier for the consumer to obtain fast food whether on their on the move or at home. Fast food can be purchased almost any time and anywhere.
  • Globalisation – McDonald’s has over 31,000 restaurants serving in almost 120 countries. Of those restaurants, as many as 14,000 are located in the US. However, given the research and care that the business has taken regarding flavours and cultures in each country it enters, McDonald’s has the opportunity to continue global expansion. They have the required knowledge and experience to open more restaurants in new countries such as China or India. There is potential to open restaurants in countries where culture has a major influence on people’s lifestyle and eating habits.
  • Conservation – McDonald’s has discussed the opportunity of new green energies and green packaging solutions in recent years. Conservation is a hot topic for the fast food industry but no major businesses have taken the lead in this area. McDonald’s has the opportunity to incorporate some of these new innovations into their operations and tell their story through smart marketing strategies and advertisements.

Threats:

  • Economic Recession – The business’ revenue streams are strategically diversified, but there continues to be uncertainly following the financial collapse in 2008. It’s an issue that impacts all fast food businesses. Recession or down turn in economy will affect McDonald’s revenue, as household budgets tighten and spending is reduced.
  • Environmental Issues – Environment continues to thrive as one of the hot topics all over the world. Any actions or operations that influence the earth e.g. contribution to global warming, are continuously criticised.  The business cannot seem to escape the stories from the press that its beef rearing process has taken the place of many rain-forests and prevents any opportunity for regeneration. The business risks losing customers if it does not invest time and resource into tacking environmental issues that are important to consumers.
  • Public Health Crisis – Obesity cases in the UK and US continue to rise and often businesses such as McDonald’s will feature in the press. The business will forever be overshadowed by previous consumer offerings such as the ‘Supersized Meal’, a long duration of no fruit or yogurt and a slim salad selection, of which many contain high calorie dressings. Obesity research continues to grow and this is having an impact on consumer decisions. Many consumers demand require nutritious and healthy food as well as lifestyle.

FAQs about McDonald’s

We’re constantly asked questions about McDonald’s and, in particular, information regarding the history of the company. So here are the most frequently asked questions directly from our inbox.

Who is the current CEO of Mcdonald’s? Steve Easterbrook

What is the current logo for McDonald’s? The 2017 logo.

mcdonalds-logo-2017
McDonald’s Logo 2017

 

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