Mc Donald's Case Study

GET HELP INSTANTLY

Place Your Question Here

Mc Donald's Introduction

Organisations are expected to assess their strengths and weaknesses in order to improve their business processes as well as to cater to the needs of the customers. In this context, it can be stated that SWOT analysis of a company provides assistance in assessing the strengths and weaknesses along with identifying the opportunities and threats related to the company. Moreover, PESTLE analysis is a framework that provides the company with appropriate information about the macro environmental factors. These factors have the capability of impacting the performance of an organisation. This study focuses on the case study of McDonald’s in order to develop a SWOT analysis as well as a PESTLE analysis.

Company Details

Company Name

McDonald’s

Type of industry

Restaurants

Headquarters

Chicago, Illinois, United States

Sales/Revenue

21.025 Billion USD

Area served

Worldwide

Number of stores

37,855 in 101 countries

Competition

KFC, Burger King and Subway

USP

Perfect Combination of price, consistency and cleanliness

Target Group

Young Children and Teenagers along with their parents

Products

Fast foods for young children, teenagers and their parents

Website

https://www.mcdonalds.com/us/en-us.html

Table 1: Detail of McDonald

(Source: Influenced from a study by Epple et al. 2019)

Mc Donald's Swot Analysis

Strengths

  • McDonald’s is considered as the second largest chain of restaurants
  • Strong Brand Equity
  • Worldwide recognition
  • Annual revenue of 21.025 billion USD in 2018 (Macrotrends.net, 2018)
  • Wide customer base
  • Overseas market
  • Consistency in the quality of food

Weaknesses

  • Decline in market shares
  • Decline in annual income
  • Lack of innovative product development

Opportunities

  • Expansion in other countries
  • Increase in the dine-out market
  • Introduction of new formats such as McCafe
  • Increased focus on corporate social responsibility

Threats

  • Increase in competition
  • Increase in the number of health conscious customers
  • Change in exchange rate
  • Recessions

Table 2: Swot Analysis

(Source: created by Author)

Mc Donald's Analysis

McDonald’s is considered as the second largest chain of restaurants operating in over 101 countries with 37,855 stores globally (News.mcdonalds.com, 2019). The main strength of the company is that the name of the McDonald’s is recognised as a reliable brand. As per the case study of McDonald's, the company has a wide customer base consisting of all age groups from youngsters to older adults. Furthermore, the company was able to maintain their quality of food due to which the company was able to attract new customers as well as retain older customers. As per the case study of McDonald's, the company has a strong brand equity due to which the company was able to capture such a huge market globally. Moreover, as commented by Epple et al. (2019), it is necessary for a company to manage the market power with respect to competitors and suppliers in order to increase their financial performance. Furthermore, as per the case study of McDonald's, it can be inferred that due to the size of the company, McDonald’s has the ability to exercise their power over competitors and suppliers along with increasing its financial performance.

Need Full Solution?

Request a FREE quote now!

Ask Now

However, the main weakness of the company is its declining profit. As per the case study of McDonald's, it can be inferred that the company’s annual revenue saw a decline of 7% for the year of 2018 (Macrotrends.net, 2018). Moreover, lack of innovative product makes the product less appealing to the customers. However, the company can increase their financial performance by using the opportunity of expanding in various emerging markets such as China and India. Furthermore, the new concepts of McCafe might increase the number of customers due to an increase in the numbers of facilities provided by the company. Additionally, with the help of corporate social responsibility the company can enhance their image through community works with respect to the environment. The main threat of the company is an increase in the number of competitors along with an increase in the number of health conscious consumers. This results in a decline in the performance of the company.

Mc Donald's Pestel Analysis

Political

  • McDonald’s operates in over 100 countries due to which the company needs to follow the policies of all the countries
  • The company needs to abide by the health and hygiene policy of all the operating countries
  • The change in the paradigm of political power can affect the business of the McDonald’s

Economical

  • The economy of the company is linked with all the countries they are operating in
  • The annual revenue of the company for 2018 is 21.025 billion USD in 2018 (Macrotrends.net, 2018)
  • The change in the exchange rate also affects the financial performance of the country

Social

  • McDonald’s cater to the needs of all its customers ranging from health conscious consumers to normal customers
  • The company is considered to be the fourth largest employer in the world by providing 1.9 million jobs (News.mcdonalds.com, 2019).

Technological

  • The company is implementing technologies within their outlets in order to increase the efficiency of the employees
  • The website of the company allows an individual to order online without any hassle

Legal

  • The company needs to follow the legislations of all the 101 countries in order to prevent any breaching of legislations
  • The company needs to abide by the employment law along with health and hygiene policy

Environmental

  • The company uses corporate social responsibility to manage the community work for the wellbeing of the society

Table 3: Pestel Analysis

(Source: created by Author)

Mc Donald's Analysis

McDonald’s operates in over 100 countries with more than 37,000 stores, therefore, the company need to abide by the rules and regulations of all the companies. Furthermore, any change in the political power may disrupt the business of McDonald’s. As per the case study of McDonald's, the company complies with the health and hygiene policy in order to provide quality food to its customers. Furthermore, the exchange rate of currency affects the financial performance of the company. Moreover, as per the case study of McDonald's, the company saw a decline of 7% for the annual revenue of 2018 as compared to the annual revenue of 2017 (Macrotrends.net, 2018). The company is focussed on catering to the needs of its customers of al age group and gender. Additionally, as per the case study of McDonald's, the company introduced healthy food such as low-calorie foods in their menu in order to attract health conscious. Moreover, the company uses technologies such as flashy television to provide the customers with a visually appealing menu. The company needs to follow the legislations of each country in order to prevent any fine from them. Moreover, the company needs to follow the employment law as well as health and hygiene policy. As per the case study of McDonald's, the company also follows the guidelines of corporate social responsibility in order to work for the wellbeing of the environment as well as the society.

Reference List

Epple, D., Romano, R., Sarpça, S., Sieg, H. and Zaber, M., (2019). Market power and price discrimination in the US market for higher education. The RAND Journal of Economics, 50(1), pp.201-225.

Macrotrends.net, (2018), McDonald's Revenue 2006-2019 | MCD, Available at: https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/revenue [Accessed on: 4th August 2019]

News.mcdonalds.com, (2019), Newsroom, Available at: https://news.mcdonalds.com/ [Accessed on: 4th August 2019]

GET 20% OFF On your first Mc Donald's Case Study Order Now

whatsApp
whatsApp