McDonald's Strategic Analysis: Applying SWOT to Business Growth

This case study presents a SWOT analysis of McDonald's, a global fast-food giant with over 36,528 restaurants across 119 countries. It identifies the company's strengths, including its strong global brand and diversified income, and weaknesses, such as negative publicity related to unhealthy ...Read More

Running head: STRATEGIC THINKING
Strategic Thinking
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1. SWOT Analysis of Mcdonald’s
The Mcdonald's company is a highly popular fast food company in America. The company
has more than 36,528 restaurants across 119 countries of the world. By the end of 2017, 81
percent of the organization's restaurants were owned and operated by independent
franchisees (Yuece, 2012). In order to understand the strategic insights of the company,
SWOT analysis has been performed.
Strengths
Strong global brand: The consumer loyalty, as well as the brand equity of the McDonald's
Company, is high. The company is considered to be one of the most recognizable brands in
the world. One of the chief reasons behind the popularity of McDonald’s is that the company
ensures the same taste of its fast food products and ambience no matter where the restaurant
is situated across the globe (McDONALD, 2016). Along with that, the company also
incorporates cultural diversity in its food.
Diversified Income: Considering the fact that the company is located at 1200 countries
across the world, the total earning of the McDonald’s from the different countries tends to
offset one another. For instance, when the sales of the country were decreasing in U, the
company was able to maintain its total revenue by imposing strategies that enhance its sales
in Africa.
Weaknesses
Negative publicity: Considering the fact that the company sells fast foods that are loaded
with curbs, salt, sugar and fats, McDonald's has been criticized several times for promoting

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unhealthy food habits. Moreover, the documentary “Super Size me’ documented an
individual whose health deteriorated due to consumption of McDonald's food products
(Kajanus et al., 2012).
High Employee turnover: The employee turnover rate of the company has increased due to
low payment by the organization. Since the company is employing unskilled employees for
low payment, the cost of training is high.
Opportunities
Upgraded Menu: In order to enhance their number of consumers and ensure consumer
loyalty, the company has recently introduced new items in their menu like Sirloin Burgers
and Artisan Chicken. Moreover, the company should also strengthen its position by
diversifying its product in the beverage industry (McDONALD, 2016).
Expansion Plans: The Company should expand its market in the Asian zone since the fast
food market of Europe and Australia has got highly saturated.
Threats
Health conscious consumers: The trend of leading a healthy lifestyle is high in developed
countries. Considering the fact that majority of the company’s outlets are located in
developed countries, it can be considered as a potential risk.
Competition: The Company is facing high competition in local, regional as well as
international market. Some of its crucial competitors include Burger King, Wendy's, Subway
and KFC.

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2. Identification of three strategic insights
 McDonald's must expand its business in the developing countries of Asia to ensure to
cope up with its competitors.
 The company must focus on the up gradation of its menu list in order to deal with the
increasing demand for a healthy lifestyle among its consumers (Kiron et al., 2012).
 The management of the company should recruit experienced and skilled employees
by paying them their demanded amount of money.
3. Importance of Strategic insights
The mentioned recommendations are strategic insights because it will help the
organization to develop effective strategies in order to mend its loopholes. While the
expansion of its business will results in enhancement of its revenue, recruiting skilled staffs
will lower the cost of its training programs.

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Reference List
Kajanus, M., Leskinen, P., Kurttila, M., & Kangas, J. (2012). Making use of MCDS methods in
SWOT analysis—Lessons learnt in strategic natural resources management. Forest
Policy and Economics, 20, 1-9.
Kiron, D., Palmer, D., Phillips, A. N., & Kruschwitz, N. (2012). What managers really think
about social business. MIT Sloan Management Review, 53(4), 51.
McDONALD, M. A. L. C. O. L. M. (2016). Strategic marketing planning: theory and practice.
In The marketing book Routledge, 108-142
Yuece, I. (2012). SWOT Analysis of McDonald’s and Derivation of Appropriate Strategies, 22-
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