University Business Report: McDonald's SWOT Analysis and Strategy

This report presents a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of McDonald's, evaluating its current market position and strategic outlook. The analysis highlights McDonald's strengths, such as successful product diversification with new menu items and global operational reach, which helps to mitigate currency risks. Weaknesses include challenges in securing prime locations and a slowing dividend growth. Opportunities encompass international expansion, catering to the growing demand for healthy food options, and capitalizing on the expanding middle class in emerging markets. Threats include intense market competition and commodity price fluctuations, which could affect sales. The report references several academic sources to support its findings, providing a comprehensive overview of McDonald's business environment.

SWOT analysis

McDonald's is out-performing the market and setting new highs in this competitive
market, By performing a SWOT analysis on the McDonald it will provide information about the
company's Strengths, Weaknesses, opportunities and threats in the current market (CGA, H.C.B.,
2010).
On the basis of Strength, McDonald's has successfully developed their new items such as
Smoothies, coffees and other burgers, which is expanding the range of the products and choices
in the company's menu, this high range and variety of choices in the menu are attracting lots of
customers. In addition to this with strong product offering the company is able to grow their
income during the time of recession unlike other stores in the market who are unable to make
change in their products rates. Also, because of the operations which are spreading by the
company in all around the world allows it to expose not just in one currency and economy
(Tsitsipati and Athanasios, 2014). Along with all this the organisation is trading near its highs,
the annual dividend payment of the company has gone from 55% share in 2005 to $2.20 in 2010.
On the basis of Weaknesses of the McDonald, it is continuously becoming harder and
harder in finding the prime location for setting up a Golden Arches by the company (Hongjun
and Yajia, 2012). In US the main structure of the organisation is restaurants which is hindering
the international posing of the potential culture and challenges in the growth of the company.
The dividend growth of McDonald is being slowing and continuously slowing to the level of
negative ratios, because the annual dividend hike are continuing. The company is still not
completely capitalised their trend towards the organic foods. Also, because of the organisation
high employee turnover the company is spending lot of expenses for the training activities.
Opportunities such as International expansion, McDonald's can expand its business into
international market. By this way company will be able to grow well and will be able to earn
more profit. Increasing requirements of healthy food items, Now-a-days people are more aware
with the healthy food thus, company has chance to offer them testy and healthy food. By this
way it will be able to increase satisfaction level of its potential buyers. Increasing size of middle
class in emerging market: It is another opportunity for the McDonald's because income level of
the middle class people are increasing (Ryals and McDonald, 2010). By this way all class of
customer will be able to purchase products of cited firm. That may help in increasing business of
the entity.

Threats such as High competition, It is the biggest threat to the McDonald's because due to this,
consumers can move to other brands easily. It may decrease sales volume of the company. It is
essential for the cited firm that to identify needs of consumers. That will support in proving
products as per the need of customers by this way clients will be satisfied. It will assist in gaining
competitive advantage to the organization (McDonald and Meldrum, 2013). Commodity price
fluctuation, It is another threat to the McDonald's because due to changes in prices, consumers
can get influenced. That may impact on sales volume of the firm.

REFERENCES
Books and Journals
CGA, H.C.B., 2010. External environmental analysis for small and medium enterprises
(SMEs). Journal of Business & Economics Research. 8(10). p.19.
Hongjun, L. and Yajia, G., 2012. Study on chain companies human resources management.
In Information and Business Intelligence. (pp. 227-232). Springer, Berlin, Heidelberg.
Ryals, L. and McDonald, M., 2010. Key account plans. Routledge.
McDonald, M. and Meldrum, M., 2013. The complete marketer: 60 essential concepts for
marketing excellence. Kogan Page Publishers.
Tsitsipati, V. and Athanasios, C., 2014. SWOT analysis of the truffles market in Greece. British
Food Journal. 116(12). pp.1976-1997.