The fast-food industry has been on the rise in the recent past and McDonald’s is a global brand that has existed in the market for a long period. It has applied different strategies to maneuver worldwide and grow its consumer base. The fast-food industry requires fast and reliable service delivery to customers and McDonald’s has the appropriate technology to outshine its competitors. This presentation indicates the strengths, weaknesses, opportunities, and threats (SWOT) analysis of McDonald’s and the strategies it uses to improve on the mentioned areas as it develops to become the best brand in the fast-food industry.
SWOT Analysis of Company Name
Businesses must position themselves in the industry by having proper image-building strategies that are difficult to destroy in a single moment (Hitt, 2020). McDonald’s has a mighty brand name, image, and reputation that it has built for many years. The positioning as one of the major competing companies in the industry influences the customer base as it maintains old ones and keeps attracting others. The brand image is recognizable, giving the business identity in the market and competitive advantage. It also has a practical technological approach that aids in improving its speeds in meeting the high demands. A mighty brand name, image, reputation, and high technology are McDonald’s strengths to boost its customer base and service delivery, respectively.
However, the company has weaknesses that hinder a hundred percent service delivery. The weaknesses include unhealthy food image and employee dissatisfaction. The company has an unhealthy food image since it sells junk food. Many customers with health issues may not consume the products, hence losing possible customers. The company also has many dissatisfied employees due to underpayments, lack of respect from customers, and insecure work hours.
McDonald’s has vast opportunities in the market if they offer more innovative products, freebies, and discounted offers for their loyal customers. It can also expand its menu to offer healthy products to meet the growing demand. If the business offers more innovative products, freebies, and discounted offers, it will attract a large consumer base while maintaining old ones.
The greatest threats that McDonald’s faces are intensified competition, installation of expensive technology, and operational threats due to cultural differences. Expensive technological investment may lead to reduced profit margins. The company should identify its threats in competition by other firms like Burger King, KFC, and Subway and plan what it can do to gain a competitive advantage.
SWOT Analysis Strategy
Every company that identifies its strengths and opportunities should have strategies to gain a robust competitive advantage. McDonald’s identifies cost leadership and expansion into international markets as the strengths and opportunities strategies it may use to improve its operations. The company uses cost leadership by using franchises to run its operations. These franchises pay a specific share to McDonald’s on every sale they make. McDonald’s transfers most of the costs it should incur to the franchises owners, thus making huge profits.
McDonald’s has expanded its operations to many countries to increase its consumer base. It uses its brand image and name to grow its audience and generate more income. International markets are easy to join especially where competitors don’t exist because competition does not exist.
Franchising is one of McDonald’s swot analysis strategies to overcome its weaknesses. It regulates employee dissatisfaction by franchising the business to allow different investors to manage their operations. Therefore, the employees may also start their branches of McDonald’s and manage them personally provided they share some of the profits with the main office.
Additionally, the business may use product and service development strategies to overcome competition from other firms with healthier and balanced diets. Product development also overcomes the operational threat since the company overcomes cultural differences.
Competition rises when two companies or more struggle to acquire the largest market share. McDonald’s faces competition as a threat through other companies like Burger King and KFC. However, through operations that improve speed, cost, and nutrition, McDonald’s effectively controls the market.
McDonald’s may expound its business to tap international markets where its customers You should thoroughly discuss the various levels and types of strategies the firm may use to maximize its competitiveness (Ferriera & Ferriera, 2018). Penetrating unacknowledged international markets creates the market power for McDonald’s and will generate high income for it.
McDonald’s should ensure that its customers receive the best services from their franchises. The business has employed vast technology to create an excellent work delivery and response to the customer’s demand (Akcam, 2020). The company serves hygienic food and respects customers by offering responsive customer care services. Consumer satisfaction significantly contributes to the franchises’ profitability by enlarging the consumer base.
Increasing turnover ratios is critical for McDonald’s development and penetration into the market. They increase the turnover ratio by expanding their operations to meet the high demand. Serving more customers widens the cash flow into the business, thus increasing the profits.
McDonald’s should ensure that its customers receive the best services from their franchises. The business has employed vast technology to create an excellent work delivery and response to the customer’s demand. The company serves hygienic food and respects customers by offering responsive customer care services. Consumer satisfaction significantly contributes to the franchises’ competitive strength.
Maximizing investment in marketing strategies aids in the business expansion because it increases the consumer’s exposure to information about the company. The exposure enhances the growth of demand for the products. Robust product promotion strategies render information to all parties, and communication is effective in the company.
McDonald’s should employ effective marketing strategies to encourage demand for its products. It may use social media to create awareness among its customers since profitability depends on the number of customers it serves. Advertisements and marketing are essential to improve a company’s brand and positioning in the market essentially by interacting with customers and knowing their demands. The communication should be strategic to manage costs and remain effective in its progress.
The organization should maintain customers’ by appreciating loyal customers. The process can be through loyalty treatment, gifting customers, and giving them offers after their purchases. Customer appreciation enhances a thriving relationship with the management and helps the organization retrieve information from the customers. The information gained is applicable in the improvement of service delivery techniques.
Corporate Social Responsibility
Corporate social responsibilities are essential in the business’ prosperity because they directly influence the strengths and weaknesses the company has and bring a sense of company positioning in the industry. Ethical issues are critical for the company’s development since they outline how businesses conduct their operations. Some of the ethical issues for McDonald’s are consumer safety and respect. Safety and respect build the image and maintain or lose customers; therefore, McDonald’s must be keen to ensure they do not infringe consumer rights.
Additionally, the company contributes to ethical issues by reducing, reusing, and recycling its waste products to prevent their emission into the environment. Environmental conservation is an ethical issue for most corporations, but McDonald’s ensures it does not negatively impact the environment by littering plastics and other pollutants (Zhang et al. 2020).
Responsible corporate behavior like consumer protection and respect positively affects the business’ image and positioning in the market. Product position is based on how consumers perceive it and how the seller treats them. The Consumer Product Safety Act provides guidelines for agencies to protect buyers from defective products in the market. McDonald’s gains a reputable public image and positions itself in a promising market.
Reducing, reusing, and recycling waste products protect the environment from hazardous activities. Furthermore, the company gains a good relationship with the community and minimizes the cost of acquiring raw materials.
Akcam, B. K. (2020). Improving order processes with information technology: McDonald’s case. Journal of Information Technology Teaching Cases, 10(2), 102-107. Web.
Michael A. Hitt. 2020. Strategic Management: Concepts and cases: Competitiveness and globalization 13th ed. Cengage Learning.
Ferreira, J., & Ferreira, C. (2018). Challenges and opportunities of new retail horizons in emerging markets: The case of a rising coffee culture in China. Business Horizons, 61(5), 783-796. Web.
Zhang, R., Wu, C., Yin, J., Liu, L., Cheng, L., & Xin, X. (2020). Corporate social responsibility (CSR) survey—kfc, McDonald’s. Academic Journal of Business & Management, 2(8). Web.