McDonald’s SWOT – SWOT analysis of McDonald’s
This article ‘McDonald’s SWOT – SWOT analysis of McDonald’s’ evaluates the strengths and the weaknesses of the famous fast-food restaurant, McDonald’s. It also explores some opportunities that the company should consider for further expansion, and certain threats that it should fend off vigorously.
McDonald’s was founded in the USA in 1940. It opened its first restaurant in the UK in 1974. It has over 14 thousand restaurants in the USA. It also has 1,300 restaurants across the UK and Northern Ireland which employ approximately 120,000 people (McDonald’s, 2021).
Strengths of McDonalds
McDonald’s has been in the market for a long time, hence extensive market knowledge. Franchising is the company’s growth model and approximately 85% of the restaurants are owned and operated by franchisees. This has helped McDonald’s not only to enrich its knowledge of the markets significantly, but also to increase its growth worldwide.
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 (Huffington Post, 2013). According to a survey conducted by Customer Edge Insight, 64% of visitors said that they were extremely likely to visit the restaurant again.
McDonald’s has around 39,000 restaurants worldwide which serve approximately 69 million people a day (Lock, 2021). It has approximately 1.9 million employees who work on both full-time and part-time basis. It operates in 121 countries and 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 was ranked number one in Fortune Magazine’s 2008 list of most admired food service companies (Novak, n.d.). It is the most valuable fast-food brand in the world with an estimated brand value of about 129.3 billion U.S. dollars (Lock, 2021).
McDonald’s revenue in 2020 was 19.21 billion U.S. dollars. It recorded a net income of approximately 4.73 billion U.S. dollars for the same year (Lock, 2021).
Weaknesses of McDonald’s
High staff turnover
The first weakness identified in this ‘McDonald’s SWOT – a 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 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 a number of products over the years around the world, some of them failed really badly. However, it should not frustrate the restaurant. It should continue to develop new products to meet the growing needs of the customers.
Threats to McDonald’s
Competitors are usually considered threats, and 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.
The article ‘McDonald’s SWOT–SWOT analysis of McDonald’s’ demonstrates that the restaurant has a number of 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 that McDonald’s is great to make use of its strengths and to turn its weaknesses into strengths.
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Last update: 01 September 2021
Huffington Post (2013) Even Dissatisfied McDonald’s Customers Are Likely To Return, Fast Food Survey Says, available from: http://www.huffingtonpost.com/2013/01/18/dissatisfied-mcdonalds-customers-return-fast-food-loyalty-survey_n_2504951.html (Accessed 18 February 2017)
Lock, S. (2021) Brand value of the 10 most valuable fast food brands worldwide in 2016 (in million U.S. dollars) available from https://www.statista.com/statistics/273057/value-of-the-most-valuable-fast-food-brands-worldwide/ (Accessed 01 September 2021)
McDonald’s (2021) How many McDonald’s restaurants are there in the U.K. and the world?, available at: https://www.mcdonalds.com/gb/en-gb/help/faq/18510-how-many-mcdonalds-restaurants-are-there-in-the-uk-and-the-world.html (accessed 01 September 2021)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.