SWOT analysis of McDonald’s
This is a detailed SWOT analysis of McDonald’s which evaluates its strengths and weaknesses. It also explores some opportunities that it should consider for further expansion, and certain threats that it should fend off vigorously.
McDonald’s has thousands of restaurants in the USA. It also has 1,300 restaurants across the UK and Northern Ireland which employ approximately 120,000 people (McDonald’s, 2023).
Strengths of McDonalds
McDonald’s has been in the market for a long time, hence extensive market knowledge. This level of knowledge is very helpful to deal with many micro and macro environmental challenges.
McDonald’s has strategically positioned itself in the market, targeting different customer segments with its diverse menu options. It has also leveraged technology to enhance customer experience, such as through its mobile app and self-ordering kiosks, which have made ordering more convenient and efficient.
McDonald’s has a huge number of loyal customers. Affordable price, quick service and convenience are some of the factors contributing to customer loyalty. It is very interesting that even dissatisfied customers are likely to return to McDonald’s. According to a survey conducted by Customer Edge Insight several years back, 64% of visitors said that they were extremely likely to visit the restaurant again.
McDonald’s has around 36,000 restaurants in over 100 countries which serve approximately 69 million people a day (McDonald’s, 2023). It has enormous operations in the USA, Australia, Canada, France, the UK, Germany, Italy, the Netherlands, Russia, Spain, Middle East, India, and China. This enormous global presence gives it a competitive advantage over many of its competitors.
McDonald’s has one of the world’s most recognizable logos (the Golden Arches). It is the most valuable fast-food brand in the world with an estimated brand value of about 154.9 billion U.S. dollars (Statista, 2023).
Another strength of McDonald’s is its franchising model, which has enabled it to expand its operations rapidly while minimising costs. By partnering with local entrepreneurs, it has been able to enter new markets quickly and customise its menu to suit local tastes and preferences.
Supply chain system
Additionally, McDonald’s has a strong supply chain management system, which ensures that it has a constant supply of raw materials to meet the demand for its products. This has helped it maintain consistency in the quality of its food products across all its outlets globally.
The last strength identified in this SWOT analysis of McDonald’s is CSR (Corporate Social Responsibility). McDonald’s has invested in corporate social responsibility initiatives which have enhanced its reputation and customer loyalty. For instance, it has joined the United Nations Race to Zero campaign, putting itself on the path to net zero emissions by 2050 (McDonald’s, 2023).
Weaknesses of McDonald’s
High staff turnover
The first weakness identified in this ‘SWOT analysis of McDonald’s’ is high staff turnover. According to some researchers, McDonald’s has a high employee turnover rate, even though it claims otherwise. High employee turnover leads to more money being spent on training.
Issues with employee satisfaction
McDonald’s has been criticised for its low wages, which have led to high employee turnover rates and low morale. Some employees have walked off the job in the past in the UK to demand better wages and better working conditions.
Reviews show that employees have mixed feelings regarding working at McDonald’s. While some of them appreciate the company, others are not much positive about the work culture, salary, and management (Indeed, 2023).
Issues with organic foods
McDonald’s has not yet been able to capitalize on the trend towards organic foods. The demand for organic foods is ever growing, and the restaurant’s failure to capitalise on it is a notable weakness. It should be mentioned that McDonald’s test marketing for pizza failed to bring about any positive results for the restaurant.
Opportunities for McDonald’s
New geographical markets
As the demand for fast food is increasing around the world, McDonald’s can explore more geographical markets. It can target frontier markets in which it does not have any operations yet. Likewise, it also should reach out more provinces and cities in the countries such China and India.
New products development
Although McDonald’s introduced several products over the years around the world, some of them failed badly. However, it should not frustrate the restaurant. It should rather continue to develop new products to meet the growing needs of the customers.
Threats to McDonald’s
Competition is the first threat to consider in the SWOT analysis of McDonald’s. McDonald’s faces a number of strong competitors e.g. Burger King, Starbucks, and KFC. As competitors’ actions impact on McDonald’s, it must monitor competition constantly.
McDonald’s has been sued multiple times for having ‘unhealthy’ food, allegedly with addictive additives, contributing to the obesity epidemic in USA (Novak, n.d.). Legal penalties cause significant damages to the finances of many companies every year.
Changing consumer preferences
Another threat facing McDonald’s is the changing consumer preferences and dietary needs, which are shifting towards healthier and more sustainable food options. This has led to increased criticism of McDonald’s menu, which is perceived as unhealthy and contributing to the rising cases of obesity and lifestyle diseases.
Summary of SWOT analysis of McDonald’s
The article demonstrates that McDonald’s has several very good strengths as well as weaknesses. While there are a variety of opportunities out there for it to pursue, there are also some threats which may have significant impact on it. Having said that, it is very clear from the global progress of McDonald’s that it is very efficient to make use of its strengths and to turn its weaknesses into strengths.
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Last update: 24 March 2023
Indeed (2023) McDonald’s employee review, available at: https://uk.indeed.com/cmp/McDonald’s/reviews (accessed 24 March 2023)
McDonald’s (2023) About us at: https://www.mcdonalds.com/us/en-us/about-us.html (accessed 24 March 2023)
Statista (2023) Brand value of the 10 most valuable fast food brands worldwide (in million U.S. dollars) available from https://www.statista.com/statistics/273057/value-of-the-most-valuable-fast-food-brands-worldwide/ (Accessed 22 March 2023)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.