McDonald's, or simply McD, is an American hamburger and fast food restaurant chain. It was founded in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald. In 1948, they reorganized their business as a hamburger stand, using production line principles. The first McDonald's franchise opened in Phoenix in 1953 using the arches logo. Businessman Ray Kroc joined the company as a franchise agent in 1955 and subsequently purchased the chain from the McDonald brothers.
Today, McDonald's is the world's largest restaurant chain, serving approximately 68 million customers daily in 119 countries across approximately 36,615 outlets.[6] McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french fries, wraps, breakfast items, soft drinks, milkshakes, and desserts. In response to changing consumer tastes, the company has expanded its menu to include salads, fish, wraps, smoothies and fruit.
SWOT Analysis of McDonald's:
Strengths
• It has a strong global presence and is considered as a market leader in both the domestic as well as the international markets.
• It is a global brand that owns 31,000 restaurants serving in 120 countries. Of these 31,000 restaurants at least14,000 restaurants are situated in the US.
• It uses economies of scale for reducing the cost, as its huge expansion diversifies the overall risk involved with the economic performance.
• They own an active children’s charity by the name‘The Ronald McDonald House’.
• It takes steps in adjusting the Ingredients and product offerings in order to comply with the upgraded health standards deemed necessary by the USDA.
• It earns revenue by fast food sales as well as a property investor and a franchiser of restaurants.
• It has a firm real estate portfolio.
• It has branded menu items i-e Big Mac, Chicken McNuggets, which further promote McDonalds.
• Its recognized as one of the world’s most recognized logos.
• It is recognized as a socially responsible and community oriented firm.
• It adapts to the cultural differences regarding the region where the restaurant is set up.
• It has located itself in major airports, cities, highways, tourist locations, theme parks.
• It has an efficient food preparation style that follows the process in a systematic way.
• It takes food safety extremely cautiously.
• It was the first to provide the customers about nutrition facts.
Weaknesses
• It uses advertising that mostly targets children.
• High employee turn-over.
• It has yet to accomplish going on the trend of organic food.
• Price competition with the competitors resulting in low revenue.
• Lack of innovative products.
Opportunities
• It can adapt to the needs of the societies and undergo an innovative product line.
• It can research ways to use ‘green’ energy and packaging which will work as a part of their promotional effort as well as fulfill their social responsibility.
• It can create new product offerings, use mobile text messaging to offer services that appeal to consumers.
• It can upscale some of its restaurant settings at luxurious locations to attract more customers.
• It can provide optional items that are regarded to be the basis of allergy for some.
• It can slow down the level of expansion in order to increase the profitability of the organization.
Threats
• The recession negatively impacts the holding position of the firm regarding its revenue streams, even though they are quite diversified.
• Foreign currency fluctuations are regarded to be a major problem as it uses standard pricing for its food items.
• More restaurants that are increasing their food offering and declining the price.
• Health issues regarding the fast food chain.
• Heavy investments on promotional campaigns which decrease the gaining of market share.
• Some parents criticize the firm’s ‘cradle to grave’ marketing strategy that focuses on kids, who later on take it as a trend to their adulthood.
• Sued various times for unhealthy food, usually with addictive additives.
• Emergence of major fast food competitors: Burger King, Starbucks, Wendy’s, Taco Bell, KFC.
• The expansion has made the firm vulnerable to the slow economies of the other countries.