McDonald’s SWOT Analysis

SWOT refers to the strength, weaknesses, opportunities and threats of a company. Here, it should be noted that strength and weaknesses are always internal whereas opportunities and threats are external. It is important for the company to identify its strength, weaknesses, opportunities and threats because it helps the company’s strategy to be well conceived.

Strengths

1.    Very Strong Brand Name

Since McDonald’s is the most well known food chain in the world, brand recognition is there big strength. Their marketing campaign continues to focus on brand recognition by promoting their name.

 

2.    Market Share

The market share of McDonalds’ is highest in the food industry. Its share in the market is 64.04, which is quite greater than 3.8 of Burger King and 18.13 of Yum. McDonald’s serves more than 55 million people in one day through out the world.

 

3.    Large Target Group

The target group of McDonald’s is very high. Its target market is low to mid income people, busy people, families, teenagers, college students, children etc. So McDonald’s is targeting a large group of society.

 

4.    Play Area for Children

McDonald’s is also targeting the children because it has established play area for the children in all the restaurants through out the world. By focusing on the children, McDonalds has increased its revenue to the large extent. The tactic of introducing clown proved very helpful in attracting children.

Weaknesses

1.    Negative Public Image of Food

The biggest weakness of McDonald’s is the negative image of their food. Their food doesn’t have a good public image. For example, the movie “Super Size Me” was an attempt to improve the public image of McDonald’s but it did not do well for McDonald’s.

2.    Low Revenue Growth

Revenue growth of McDonald’s is lower as compared to Burger King and Yum. The revenue growth of McDonald’s is 5.7% which is quite low than 9.7% of Burger King and 8.20% of Yum.

Opportunities

1.    Going Green

McDonald’s has got the opportunity to accelerate the idea of going green. It has already started this program and it only needs to be continued for a long time. This will improve the public image of McDonald’s and will help it to increase its revenue.

2.    Healthier Lines of Food

Since Media is free and inform public about every thing so consumers are aware of various issues and thus are more health conscious. Therefore it is the need of time that McDonald’s develop healthier line of food in order to avoid the criticism and get a competitive advantage.

3.    Coffee Business

McDonald’s has also started the business of coffee in various countries of the world. It has taken the decision to setup coffee shops with 10000 restaurants of USA. This is a good opportunity for the McDonald’s because it already has a setup of 31000 restaurants and it only needs to setup coffee shops with its restaurants.

Threats

 

1.    Many other similar competitors

McDonald’s is facing strong competition from its competitors. Some competitors of McDonald’s are Burger King, Yum, Kentucky Fried chicken, and Subway. It is also facing competition from other local restaurants in different countries of the world.

2.    Health Conscious Consumers

There are thousands of fast food chains in the world. Most of the new ones try to show a healthier image. Again, McDonald’s needs to start with healthier food and make sure they convey it in an advertising campaign.

3.    Symbol of the American Business

United Sates of America is supreme power now days and it policies have great impact on the other countries of the world. Some countries benefit from these policies while other face serious problems. The people of victim countries show their reaction against America but they cannot directly do any thing so they start targeting American businesses in their country. Since McDonald’s is the biggest symbol of American fast food through out the world therefore people show their reaction against McDonald’s by damaging the franchises.