Unit 2 SWOTT Analysis

MGMT 455

Unit 2 SWOTT Analysis

In Week 1, we summarized and discussed a YouTube video from user ddd9255, published in 2013, in which he conducted a SWOT analysis on the fast-food giant, McDonald’s. When the video was published the category Trends had not yet been included as a part of the analysis, explaining why it was a SWOT Analysis and not a SWOTT Analysis. For this assignment, we are tasked with performing our own SWOTT Analysis for McDonald’s, using information from a Business Insider (2015) article titled, “McDonald’s is about to unveil a huge plan to save its business — here are 8 things investors need to hear.”

McDonald’s

McDonald’s (MCD) is a fast-food hamburger restaurant with more than 36,000 locations worldwide, in more than 100 countries (McDonald’s, 2017b). The company is an iconic brand that focuses on introducing innovative menu items at prices that everyone can afford. What makes McDonald’s so unique is the franchise-focused business model. More than 80% of their restaurants are owned by franchisees, who are typically residents in the areas they own stores, which allows the company to adapt to and invest in local communities (McDonald’s, 2017a).

Strengths

McDonald’s is own of the greatest brands of all time. The company has a wide array of emblematic menu items that have helped create a loyal clientele. Additionally, their unique business model empowers small-business franchise owners and establishes the corporation in local communities. Moreover, the sheer size and scale of McDonald’s and its global diversification have created one of the most efficient value chains of any organization in business today.

Weaknesses

The menu has grown so much that kitchens are having trouble keeping up and customer service is declining. On top of that, the menu confusion is leading to longer wait times, resulting in more dissatisfied customers. Customers aren’t the only ones frustrated either. McDonald’s recently increased all company-owned restaurant’s wages, pressuring franchise owners to increase the pay for their workers as well. This has led to some contention, due to owners who say they can’t afford to give raises and employees who feel like they’re being shortchanged.

Opportunities

McDonald’s global footprint provides them with a great opportunity for expansion into other markets, and their low-cost menu would be welcomed in developing countries. Their franchise model would also provide new markets with their own opportunities, which would encourage entrepreneurial investment. Additionally, the global push for healthier diets provides McDonald’s with a chance to introduce even more unique items to their menu that will secure a new class of patrons.

Threats

The number one threat to McDonald’s Brand is competition. The company offers food for lower prices and at a greater convenience, but they struggle to offer quality products and customer service. Lowers costs have come at a steep price. Furthermore, while the current health craze introduces a great opportunity, the company has had so much bad press in the past that their public image is still very unhealthy.

Trends

Health isn’t just about cutting calories and eating more salad, anymore. Consumers want to know what’s in their food, how it got there, and where it came from. In an effort to keep up with this trend, McDonald’s released the TrackMyMacca app that allows consumers to look up the ingredients in their meals and track where those items came from. Another trend worth mentioning is that fast-food restaurants are moving away from the dollar menu concept, but value menus are still a major battleground. New menus must focus on offering quality as well as being budget-friendly.

Recommendations

First and foremost, in spite of the market saturation in the United States and Europe, McDonald’s has huge growth potential in other regions. McDonald’s franchise model allows franchisees to develop a menu that caters to their markets, and there is an endless amount of openings for expansion. What’s more, because of their brand marketing strength, any promotion the company runs will have enormous exposure. It is my opinion that McDonald’s should invest in bringing a PlayPlace to all of their locations and heavily advertise the initiative. This strategy could spark nostalgic memories of older customers and invite parents to bring their children, a portion of sales that has declined because of the company’s unhealthy public image.

References:

[ddd9255]. (2013, Jan. 8). McDonalds SWOT. [Video File]. Retrieved on January 13th, 2017, from https://youtu.be/qbyb0ht-dsk

McDonald’s. (2017a). Our business model. Retrieved on January 13th, 2017, from http://corporate.mcdonalds.com/content/mcd/our_company/business-model.html

McDonald’s. (2017b). Our company. Retrieved on January 13th, 2017, from http://corporate.mcdonalds.com/content/mcd/our_company.html