McDonald’s SWOT Analysis

McDonald’s is one of the most celebrated and noticeable fast food chains globally. Since the company was founded as a BBQ joint in San Bernardino, California, it was only eight years later that the stall was transformed into the beloved fast-food restaurant that we have come to cherish. Today, McDonald’s corporation is one of the top ten globally accepted brands currently running thousands of franchises in almost every region in the united states, and on a global scale. McDonald’s has been able to maintain its position as a worldwide leader in the food sector business as a fast-food restaurant industry through several internal strategies that were designed to focus on not only the internal but also the external factors which may affect the business in the long run.

This SWOT analysis framework’s primary purpose is to attempt and recognize the most appropriate external and internal factors which have played a huge role in the general success of the business (Phadermrod, 2019). McDonald’s was identified to use several strategies as a measure of dealing with these factors. However, the industry is often faced with a considerable number of issues that are commonly based and as a result of the ever-expanding conditions in the global market, as well as the innovative technologies which are continually being introduced. This SWOT analysis is designed to mainly point out the most unrelenting factors and concerns which McDonald’s must focus on if it aims at keeping is the current leadership position in the global fast-food industry.

SWOT Analysis

The main factor which is identified and of significant concern needing immediate attention by McDonald’s corporation is the issue of process flexibility and diversification, as well as business innovation and expansion (Akman, 2019).

Strength

McDonald’s list of strengths makes the company one of the leading contenders in the fast-food market industry. The main strengths of McDonald’s are as follows: a series of standardized processes, a moderate market diversification, and a strong brand image. This characteristic of the SWOT analysis indicates that the internal strategic factors play a massive role in the organization’s viability. The company’s brand image is stuck in a lot of people’s minds, thus, ensuring that the business maintains to be competitively strong.

Another major strength of the company is market diversification, which is highly dependent on the huge presence of the firm in most regions around the world. This aspect alone is beneficial, for it reduces most of the market-based risks. Additionally, McDonald’s adopted a comprehensive system incorporating a standardized process as a strength that mainly contributes to the company’s product consistency and business efficiency. Based on the company’s strengths, the SWOT analysis concludes that McDonald’s has the capability of maintaining productive operations.

Weaknesses

McDonald’s market processes, products, and focus are where most of the company’s weak links are located. The main weaknesses of the company are low product diversification, limited process flexibility, and vulnerability to the western market decline. Though the company’s process of standardization is used in certifying consistency, it is also negative, for it reduces the flexibility of the company’s ability to responding to market variations. Furthermore, the company is made highly vulnerable to slowdowns, particularly in the restaurant industry. This is a result of the company’s low product diversification, which mainly corresponds to McDonald’s focus on beverages and food products.

Opportunities

McDonald’s global growth and product mix are where most of the company’s opportunities reside. With the main opportunities, including product diversification, market development on a global scale, and its expansion in developing countries. Taking into consideration the company’s dependence on the western markets, McDonald’s is presented with an opportune moment of expanding its activities in other developing country’s economies. Furthermore, while trying to address the market-based risks, the company has the opportunity of introducing and venturing into other services, products, or entering into new food-related markets.

Threats

Most of the threats which are challenging McDonald’s are mainly based on sociocultural trends and competitive rivalry. With the main threats, including health lifestyle trends, aggressive competition, and GMO regulations and trends. The restaurant industry is a highly competitive one, with a vast number of aggressive competitors, which threaten McDonald’s status as a global market leader daily. Furthermore, the recent focus on healthy lifestyles by individuals is a major threat, for it highly discourages the businesses, consumers, from taking their products. Additionally, the issues arising from GMO regulations are also a huge threat to the activities and services being provided by McDonald’s.

References

Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis-based SWOT analysis. International Journal of Information Management, 44, 194-203.

Akman, M. K. (2019). SWOT Analysis and Security Management. European Journal of Management and Marketing Studies.