SWOT analysis of McDonald’s
McDonald’s, a fast food restaurant, was founded in USA in 1940. It opened its first restaurant in the UK in 1974. There are 1,200 McDonald’s restaurants across the UK and Northern Ireland which employ approximately 85,000 people. There are over 34,000 restaurants worldwide which serve approximately 69 million people a day. McDonald’s has approximately 1.9 million employees who work on both full-time and part-time basis (McDonald’s, 2015). The restaurant has its own strengths and weaknesses. The discussion that follows includes a SWOT analysis of McDonald’s.
SWOT analysis of McDonald’s
We have conducted a detailed SWOT analysis of McDonald’s. So, let’s have a look at it.
Strengths of McDonald’s
McDonald’s has been in the market for a long time, hence extensive market knowledge. Franchising is the company’s growth model and the franchisees own approximately 85% of the restaurants. This has in fact helped McDonald’s not only to enrich its knowledge of the markets significantly, but also to increase its growth worldwide.
McDonald’s has indeed 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 operates in 121 countries across the globe. Approximately, 2,000 people apply for a job at one of its 1,200 restaurants in the UK alone. This enormous global presence certainly gives the restaurant 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.). In 2016, McDonald’s was the most valuable fast food brand in the world with an estimated brand value of about 88.65 billion U.S. dollars (Statista, 2016).
Weaknesses of McDonald’s
High staff turnover
According to some researchers, McDonald’s has a high employee turnover rate, even though the restaurant claims otherwise. High employee turnover in the restaurants 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. The restaurant 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. McDonald’s should continue to develop new products to meet the growing needs of its customers.
Threats to McDonald’s
Competitors are usually considered threats, and McDonald’s faces a number of strong competitors e.g. Burger King and KFC. As competitors’ actions impact on McDonald’s, the restaurant monitors 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.).
The above 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 the restaurant 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 the restaurant that McDonald’s is great to make use of its strengths and to turn its weaknesses into strengths.
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Last update: 02 November 2018
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)
Statista (2016) 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 18 February 2017)
Photo credit: Pixabay
Author: Joe David
Joe David has years of 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.