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Introduction
Hailed as one of the largest and globally one of the most well known brands,
than 36,000 locations in over 118 countries. McDonalds has adopted franchising
independent business men and women and only a few are ran by the corporation.
McDonalds finds its largest market in the United States with reference to the
organizational structure in July 1, 2015 and the entire organization is divided under
four broad pillars: U.S Market; International Lead markets; High growth markets;
Foundation markets. The international markets are the ones that are quite
established with strong and robust economies and present comparable growth and
coffee shop in these markets. High growth markets are those where McDonalds see
franchising. It has identified eight markets under this belt that includes Asia, Europe
and Africa etc. Finally the foundation markets are large markets with approximately
80 markets under its umbrella that acutely focus on expanding the franchisee
model.
SWOT Analysis
Strengths
Undoubtedly this is a brand this is recognized by all age groups. Hence one of the
key strengths of McDonalds would be its brand name. It is hailed as one of the most
fundamental brand when it comes to service and value in the sector of fast food.
Secondly, McDonalds has been able to achieve a huge economy of scale. It is miles
times than that of the later. Given its reputation its a readily accepted brand in
almost all parts of the world and thus has a benchmark defining advantage over
others in entering new market and handpicking locations for its restaurants. It is a
premises etc. Given its size and expansion and large scale acceptance by the
markets, it has reimaged McCafe as one of the most premium coffee outlets, in the
restructuring in not just reducing its risk but also being able to penetrate deeper
into unchartered markets and capitalize on the strength of each markets and
Also, McDonalds has a strong real estate portfolio. It strategically locates its outlets
in areas that has good traffic, visibility and also ease of access.
Weaknesses
For a long time McDonalds has been dragged into several lawsuits such as sate
advertisements etc. and thus these litigations in not just one or two geographies but
around the world is one of its weaknesses. It becomes an unaccounted cost for the
company.
saturation and face difficulties in outlet expansion. Another major weakness of the
franchisee is the lack of innovation in its menu and products. Post its burger and
McNuggets, it has seldom come with any addition that could have captured the
Entering into large markets with the franchisee model and choosing a diversified
market in the emerging economies can be hailed as on e of the key opportunities for
over the years thanks to the franchisee model and hence it would want to capitalize
on the same in the future. It has entered into a 20 year franchise agreement with
more than 2000 franchisees in America. McD has also been able to identify the
market that has witnessed a significant growth rate over the years with coffee
accounting more than half of the total market. To capitalize on the same, MCD has
Threats
McD has undoubtedly expanded itself vigorously globally however that also leaves
and slowdowns in those countries. Also fast food industry in itself has become
highly competitive with low barriers to entry and low switching costs for the
customers. There is no dearth of fast food and coffee chains and a lot of them are
coming up with differentiated products. McD big time needs to revamp its menu and
try newer formats. Also with a increase concern towards health, there has been a
increasing demand for healthy foods by the health conscious customers. McD
should look at targeting this market as well. In some countries like UK,
Political
opportunity by McD while some as a threat. For example the increasing international
trade agreements are certainly a boon for the company and provide it an
opportunity to enhance its global supply chain mechanism. Also the various tax
reforms being introduced serves as an opportunity for the company in reforming its
Economical
operates in. For example the gradual but stable growth of the U.S economy has
definitely benefitted the company largely but the slowdown of economies such as
SocioCultural
There are certain aspects that pose as opportunities and others that pose as a
threat to the company. For example, the improving economy and thus the improved
spending power and widening wealth gap is good news for the company. McDs
target customers itself are people from medium household incomes. With improving
purchase power, it can be viewed as an opportunity. Also customers are more open
improve its product mix to cater to its target market. However the increasing shift
towards a healthy lifestyle surely poses threat to McD if it is thinking to stick to the
current menu.
Technological
With the huge internet penetration and royal expansion and acceptance of e-
Dominos and Subways. Presently it does cater to this market but through Zomato,
Foodpanda etc. Also it can look at investing more money to apply further
Legal
At U.S there is a norm for higher minimum wages now and similarly this policy is
being revised in other nations also and thus this surely affects McD negatively. Also
there are health regulations being made especially for the children and thus could
impact its presence in schools and colleges. UK for example has discouraged
Ecological
most of the climate regulations impose restrictions on certain operations that may