Mcdonalds Swot Analysis free essay sample

Since its inception, training at Hamburger University has emphasized consistent restaurant operations procedures, service, quality and cleanliness. It has become the company’s center of excellence for McDonald’s operations training and leadership development. In 1961, Fred Turner, McDonald’s former senior chairman and Ray Kroc’s first grillman, founded Hamburger University in the basement of a McDonald’s restaurant in Elk Grove Village, Illinois. February 24, 1961, Hamburger Universitys first class of 15 students graduated. Today, more than 5,000 students attend Hamburger University each year Since 1961, more than 80,000 restaurant managers, mid-managers and owner/operators have graduated from this facility At McDonald’s, our training mission is to be the best talent developer of people with the most committed individuals to Quality, Service, Cleanliness and Value (QSCV) in the world. Our strong commitment to the training and development of our People has resulted in many â€Å"firsts† and honors, including being†¦  ·The first restaurant company to develop a global training center  ·The only active QSR currently to receive college credit recommendations from the American Council on Education (ACE), the United States’ oldest and most recognized unifying body for higher education  ·Continually recognized for excellence in training Our founder Ray Kroc once said, â€Å"If we are going to go anywhere, we’ve got to have talent. And, I’m going to put my money in talent. † Hamburger University continues to promote that philosophy every day. aboutMcDonalds. com) By 1965 there were over 700 McDonald’s restaurants within the United States. SWOT for the Company McDonalds Strengths|Weaknesses|Opportunities|Threats| Brand recognition|Slow product development|More healthy food choices|Trends of healthier foods| Children Targeting|High rate for employee turnover|Change atmosphere in store |Saturated market| Largest fast food market share in the world|Unhappy franchisees|Expand drink menu|Economic downturn| Foreign markets|Varying quality in different stores|Delivery (similar to pizza places)|Changing consumer tastes| Strengths Perhaps one of the biggest strengths that McDonald’s has is that it is the largest fast food market share in the world. McDonald’s 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. McDonald’s company brand is the most recognized brand in fast food industry and is valued at $40 billion. McDonald’s is also famous by the Ronald McDonald clown. Many children find the clown fun and inviting. This gives them the advantage to other fast food companies that may not have a mascot. One thing that help McDonald’s greatly when being the largest fast food market share in the world is that McDonald’s spends on advertising more than the next 4 fast food restaurant chains combined. 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 McDonald’s strengths. Being able to satisfy the taste buds of not only an American but also someone in China or Canada, not everyone has the same taste. McDonald’s has also managed to partner themselves with other high quality and well recognized companies. McDonald’s offers only most popular brands in its restaurants, such as: Coca Cola, Dannon Yogurt, Heinz ketchup and others. By offering the high quality products with their high quality food the customers can expect an overall high quality meal. The only way to start a McDonald’s is by establishing independent franchises. More than 80% of restaurants are owned by independent franchisees. Therefore, McDonald’s can focus more on perfecting its serving system and marketing campaigns. McDonald’s has become a company that appeals to children in many different ways. The company successfully targets very young children through offering playgrounds, toys with its meals and advertisements with the ever so popular Ronald McDonald. They have given a slight better variety with the kid’s meals as to offer not only the regular kid’s meals but the Mighty Kid’s Meals. Allowing the children that are hungrier than for just a smaller portion to have the option to eat a medium sized portion. Weaknesses Over the past years there has been many controversies and negative publicity that can play a major effect on the company. McDonald’s is heavily criticized for offering unhealthy food to its customers, encouraging obesity, and strong marketing focus on very young children. Because they offer such high calorie foods it is thought to be morally wrong to entice children to want to eat high carb, greasy, and unhealthy food. This will have a slow but long-term effect on the company if there is not a way to make it healthier. Although McDonald’s 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 McDonald’s popularity. McDonald’s has an incredibly high rate of employee turnover. McDonald’s jobs often referred to as a Mac Job. A 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. This is what increases training costs and adds to overall costs of McDonald’s. McDonald’s is no longer considered a distinct restaurant t. They have a very low differentiation. McDonald’s is no longer able to substantially differentiate itself from other fast food chains (at least not enough to gain some market share) and has decided that they are going to compete by price rather than by making it additional features. Opportunities The world overall is fighting obesity and there is an ever increasing demand for healthier food. While demand for healthier food increases, McDonald’s could introduce more healthy food choices in its menu and reverse its weakness into strength. McDonald’s is trying to seize such an opportunity and soon plans to open only vegetarian restaurant in India. I believe they could also offer items such as turkey burgers instead of beef patties. Home meal delivery may be something that McDonald’s should try. McDonald’s could exploit an opportunity of delivering food to home and increase its reach to customers. This could allow those individuals that are not capable of getting out and going to McDonald’s to have it brought to their door. They can still enjoy the taste of a McDonald’s hamburger and french fry from time to time. McDonald’s has started a focus on changing customer habits and obtaining new customer groups. Changing customer habits represent new needs that must be met by businesses. So far, McDonald’s has been successful in introducing its McCafe, McExpress and McStop restaurants to meet the changing customer habits and the needs of previously untapped customer groups. Threats There are several things that propose a threat to McDonald’s and the greatest one is that the fast food markets are saturated in the developed economies. The fast food market in the developed countries is already overcrowded by so many fast food restaurant chains. This was proven quite well as it shows to be a threat to McDonald’s as it barely had any growth in the year of 2012. There will forever be a 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 McDonald’s has to offer in its menu. There are restaurants like Subway who can advertise that there are so few calories in their sandwiches that they may attract more of the adult culture than that of McDonald’s. Kids may be more apt to want to continue eating at the famous place with golden arches, but parents who continue to watch everything they allow their children to eat may find ways to make the other restaurants more appealing. Because fast food has become the way of life for many people there is a vast array of 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 McDonald’s 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 McDonald’s. It is like the most recent thing that RedBox is now even offering Sandwiches in their vending machines (https://www. acebook. com/redbox? sk=app_312310742149063 ) As McDonald’s is a company that is operating worldwide, there is continuously the issues of currency fluctuations. McDonald’s makes a part of its income from foreign operations. The profits that are sent back to United States 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 , McDonald’s profit was largely affected by appreciating dollar. Consideration is to try leaving the money in the currency in which it was received in, as the company operates in the foreign country they will also have some expenses that need to be paid in that foreign currency. They should only send the money back to the United States that is a surplus of the expenses in that location. There have been several lawsuits against McDonald’s over the past few years. McDonald’s has already been sued so many times and lost quite a few of the lawsuits. Lawsuits are not only incredibly expensive but they require time and money. And as McDonald’s continues to operate more or less the same way, there is high probability for more expensive lawsuits to come. If they cannot come up with a way to meet the demands of the customers in a more friendly way and avoid these lawsuits, they could see this offsetting some of the profits of the company for the future.