SWOT

Analysis

MCD affected to some factors

Economic:

McDonalds has the tendency to experience hardship in instances where th

economy of the respective states is hit by inflation and changes in the
exchange rates.

Market leader.

Very high target market.

Low cost and more incomes.

The rate at which the economy of that particular state grows determines the
purchasing power of the consumers in that country.

Social:
Working within many social groups.
Increase employments.

Employees
500,000
450,000

440,000

400,000
350,000
300,000
250,000

Employees

200,000
150,000
100,000

75,460

50,000
0
McDonald`s

2,420
Burger King

Yum!

8.25
Industry

Political:

The international operations of McDonalds are highly influenced by the

individual state policies enforced by each government.

Strenght
1. Largest fast food market share in the world.McDonalds is the largest fast food
restaurant chain in terms of total world sales (8%). It is the second largest outlet
operator with more than 34,000 outlets, serving 69 million consumers every day in
119 countries.

Market Share 2009

35,000
30,000
25,000
20,000

US Sales (Mil. $)

15,000

US Units

10,000
5,000
0
McDonald`s

Burger King

Yum!(Taco Bell)

2. Brand recognition valued at $90.3 billion.Companys brand is the most recognized

brand in fast food industry and is valued at $90.3 billion. McDonalds is also famous
by the Ronald McDonald clown.burger king $2.4 billion; and yum, $2 billion.
3. $2 billion advertising budget. McDonalds spends on advertising more than the next
4 fast food restaurant chains combined
4. Locally adapted food menus. The fast food chain is operating in many diverse
cultures where tastes in food are extremely different than those of US or European
consumers. Thus ability to adapt to local tastes is one of McDonalds strengths. In
2009, about 43% of its systemwide sales were from the US; Europe accounted for
about 29%; and Asia/Pacific, the Middle East, Africa, and other countries, primarily
the Americas ex-US, 28%.

5. Partnership with best brands. McDonalds offers only most popular brands in its
restaurants, such as: Coca Cola, Dannon Yogurt, Heinz ketchup and others.
6. More than 80% of restaurants are owned by independent franchisees. Therefore,
McDonalds can focus more on perfecting its serving system and marketing
campaigns.
7. Children targeting. The business successfully targets very young children through

offering playgrounds, toys with its meals and advertisements.

8. Loyal customer

Weaknesses
1. Negative publicity. McDonalds is heavily criticized for offering unhealthy food to
its customers, stimulating obesity and strong marketing focus on very young children.
2. Unhealthy food menu. Although McDonalds tries to introduce healthier choices in
its menu, the menu is largely formed of unhealthy meals and drinks. Such menu
offering prompts protests by organizations that fight obesity and hence, decreases
McDonalds popularity. the chains beef actually only contains 36% beef. Chains
such as Burger King and Wendys are using new kinds of trans-free cooking oils or
have already reduced the amount of trans fat in the oils they use for frying and
cooking.
3. Mac Job and high employee turnover. Mac Job is a low paid and a low skilled job,
which is often seen negatively by its employees. This results in lower performance
and high employee turnover, which increases training costs and add to overall costs of
McDonalds.

4. Low differentiation. McDonalds is no longer able to substantially differentiate itself

from other fast food chains (at least not enough to gain some market share) and opts
to compete by price rather than by additional features.

Opportunities
1. Increasing demand for healthier food. While demand for healthier food increases,
McDonalds could introduce more healthy food choices in its menu and reverse its
weakness into strength. McDonalds is trying to seize such an opportunity and soon plans
to open only vegetarian restaurant in India.
2. Home meal delivery. McDonalds could exploit an opportunity of delivering food to
home and increase its reach to customers.
3. Full adaptation of its new practices. McDonalds has redesigned its logo and restaurant
design in 2006. In addition, it has introduced some new practices. In a result, remodeled
restaurants have seen 8-9% higher than average market growth. McDonalds should finish
remodeling all of the restaurants and adapt the best practices in them as soon as possible.
4. Changing customer habits and new customer groups. Changing customer habits
represent new needs that must be met by businesses. So far, the company has been
successful in introducing its McCaf, McExpress and McStop restaurants to meet the
changing customer habits and the needs of previously untapped customer groups.

Threats
1. Saturated fast food markets in the developed economies. The fast food market in the
developed countries is already overcrowded by so many fast food restaurant chains and
this already proves to be a threat to McDonalds as it barely grew through 2012.
2. Trend towards healthy eating. Due to government and various organizations attempts to
fight obesity, people are becoming more conscious of eating healthy food rather than what
McDonalds has to offer in its menu.
3. Local fast food restaurant chains. Local fast food restaurants can often offer a more
local approach to serving food and menu that exactly represents local tastes. Although
McDonalds does a great job in adapting its own menu to local tastes, the rising number of
local fast food chains and their lower meal prices is a threat to McDonalds.
4. Currency fluctuations. The business receives a part of its income from foreign
operations. The profits that are sent back to US have to be converted into dollars and
may be affected by the exchange rates, especially when the dollar is appreciating
against other currencies. In 2012, McDonalds profit was largely affected by
appreciating dollar.
5. McDonalds competitors threatened market share of the company both internationally
and domestically.

Strategies

Focus on Plan to win to attract customers and expansion in other

Expansion in market share by more investments in Asia

Minimize customers losses by provide low cost menu and discounts

Applying 0 grams Trans fat in all worldwide McDonald's

Provide new product and keep innovation