Mcdonald and Its Competitors's Swot

Topics: Fast food restaurant, Fast food, Brand Pages: 7 (1992 words) Published: June 3, 2012
The story of McDonald’s started in the early 1940s when two brothers, Dick and Mac McDonald, and Raymond Kroc founded the McDonald’s Corporation with the company motto ‘Quality, Service, Cleanliness and Value’. Most of McDonald’s restaurants are operated by franchisees or by affiliates, some are operating under joint-venture agreements ( Nowadays McDonald’s is one of the most valuable brands globally and used to be the world’s largest restaurant chain, before Subway surpassed it in 2011 (Jargon., 2011). In our paper, we are going to focus on McDonald’s in the US, analyze the internal and external factors, which affect McDonald’s as well as its three top brand competitors. Then we propose an outlook for what the corporation should do to sustain their market leadership in the U.S. when facing the intense competition of the fast-food industry.

SWOT MATRIX of McDonald’s
Organizational factors

Industrial factors| Strengths (S)
1.  Brand reputation
2.  Convenience
3.  Customer loyalty
4.  Product innovation
5.  Organizational structure| Weaknesses (W)
1.  Unhealthy
2.  Numerous lawsuits
3.  Confusion over brand identity leading to product failures| Opportunities (O)
1.  Increasing  eating out trend
2.  Growing market for hot drinks
3.  Growth of franchise operated restaurants| SO Implications 1,3-1 Maintain brand reputation and customer loyalty
4-2 Expand the McCafé line of hot drinks
5-3 Increase franchises through existing developmental license strategy| WO Implications 2,3-3 Must maintain brand identity and reputation to gain more franchises| Threats (T)
1.  Rise in commodity prices
2.  Growing trend towards healthier foods
3.  Increased legislation towards fighting obesity| ST Implications 1-1  Increase purchasing discounts to maintain reputation as affordable. 4-3,1 provide healthier food to    stop further legislation as well as gain more customers| WT Implications 1-2,3 The unhealthy food might push  health conscious consumers away and might result in more restrictive legislation|

The biggest strength that McDonald’s possesses is its brand reputation. It consistently ranks in the top ten of most brand surveys. Recently it ranked as number one food service company in the Fortune 2010 list of World’s Most Admired Companies. Its brand reputation is that for affordable quality fast-food products, and this reputation makes it one of the most sought after brands for franchises. It is also one of the most convenient fast-food service providers; not only is it normally located in easy to reach places (city centers), it provides the fastest service and the food is served within minutes. McDonald’s is also known to target kids in their marketing with features like free toys in ‘Happy Meals’; therefore, when the kids grow up, they associate McDonald’s with their happy childhood memories and thereby remain loyal customers for a very long time. Along with this loyal customer base, even though McDonald's provides a uniform menu, they add different components to the menu to suit local tastes. The organizational structure of McDonald’s is one of the biggest reasons it is surviving even the global financial downturn with profits. Its presence in 119 countries means that even if sales fall in developed countries due to recession, the increase in sales from the emerging economies offsets it. McDonald’s also uses the developmental license strategy: a lot of its profits arise from royalties, for which it does not have to expend any effort. McDonald’s menu as a whole is filled with unhealthy food ingredients. Meals like ‘Big Mac’ have high calorie and sugar content, and the unhealthy perception is reinforced by the yellow logo  that brings oil and grease into the minds of most customers, though it has proved otherwise to be a powerful marketing tool. In the end, this perception of providing unhealthy food is a weakness in today’s world with the growing trend towards healthy...
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