SWOT Analysis of McDonalds in Saudi Arabia

Running head: STRATEGIC FINANCIAL PLANNING AND DECISION MAKING
Strategic Financial Planning and Decision Making
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1STRATEGIC FINANCIAL PLANNING AND DECISION MAKING
1. Introduction
The food and restaurant industry is one of the fastest growing and high revenue
gaining industries in the contemporary world (Popkin, 2014). One of the significant players
in this industry is McDonalds. It is one among the well-known international restaurant chains
to enter in Saudi market. This report shall elaborate on discussing the key strengths and
weaknesses of McDonalds in the Saudi Arabian region. It shall also assess the opportunities
and threats present for it in the Arabian market. A simple SWOT analysis tool shall be used
for identifying and assessing the internal strengths, weaknesses and external threats and
opportunities for McDonalds. Furthermore, this paper shall also present a brief competitor’s
analysis of the company along with its demographic and the ministry of health initiatives
taken by it.
2. Discussion
2.1. SWOT analysis of McDonalds
Strengths: It is one of the oldest and well-known brand in the fast food industry
(Boyland, Kavanagh-Safran & Halfor 2015). It has a very strong global brand image. With
the same, the company have a very strong position in both domestic and global market and is
at the same time, very strong in financial context. The quality of the food is also good and has
Halal certifications. There is a very strong customer and marketing engagement in
McDonalds.
Weaknesses: There is lack of product innovation within McDonalds. With the same,
many customers have claimed that most of the products of McDonalds are calorie heavy
(Kanagal, 2015). Also, in past few years, the reputation of McDonalds has been declined due
to several HR issues and legal hassles that the company has faced. Along with this, one of the
significant weaknesses of McDonalds is the dissatisfied franchises. The franchise of

2STRATEGIC FINANCIAL PLANNING AND DECISION MAKING
McDonalds have said that they feel pressurised for adopting the new value menu of the brand
and add new products and new equipment (Ishak, Khalid & Sulaiman, 2018). Also, they
pointed the installation of kiosks as one of the points of friction.
Opportunities: One of the significant opportunities for the company is offering
innovative product lines to the Saudi Arabian market such as fruit snacks and hot baguettes. It
could also make its business model CSR focused and make use of green energy and
recyclable packaging. Furthermore, the company could also get engaged in co-branding
activities with the other partners like the UAE government for reducing its carbon footprint
and diversify its services.
Threats: The threats present for McDonald in the Arabian market is many. It faces
stiff competition from the national and the international retailers of the food products. It is to
note that McDonalds compete on the basis of factors such as price, variety of men,
convenience, quality of the product and service. Although it is doing a good job on most of
these metrics, it is to mention that the quality of product is something, which management
needs to be working on its quality of product as customers are now more conscious about
their health and the product quality.
2.2. Competitors’ analysis
McDonalds KFC Corporation Burger King
Strengths  Good brand
image
 Strong product
value
 Innovative in
producing new
lines of products
 Strong trade
market recipes
 Market leader in
the world
 Strong brand
image
 String position in
Saudi Arabia
 Strong market
position
 Robust financial
performance
 Greater franchise
mix in Saudi
Arabia
Weaknesses  Over exposure in
global market
 Children are the
target audience
 Slow drive by
 Negative
publicity
 High rate of
employee
turnover
 Scattered
marketing
campaign
 Market
concentration