McDonalds: SWOT analysis
Among the alternatives given above, the second alternative will be the best solution that should be implemented. McDonald’s should utilize its ability to innovate products in order to be more responsive to the needs of the Chinese market. Popularity, good customer service, strategic locations, and excellent promotion will all be useless if the products themselves are not appealing to a wide range of consumers. Its primary product is its burgers so it would be better to improve its burger and try to add more products product to its menu list.
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In that way can McDonald’s be able to sustain its competitive advantage over its competitors. As with any other company, McDonald’s has its own share of strengths and weaknesses which can pose threat or offer opportunities to the company’s operation in China. There are also external forces that are needed to be recognized in order to determine how it can possibly effect the company. Situational analysis, being a part of the market and strategic planning process, is an integral procedure and a very powerful tool for organizations and businesses to instigate effective marketing plans and strategies.
All these can be best described and determined using SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. SWOT analysis is “concerned with analysis of an organization’s internal and external environment with the aim of identifying internal strengths in order to take advantage of its external opportunities and avoid external and possible internal threats, while addressing its weaknesses”, (Panagiotou, 2003, p. 8). SWOT analysis therefore is a business strategy and decision-making tool that provides a company an in-depth analysis of its characteristics, enabling the company decides on the appropriate strategies.
Strengths The primary strength of McDonald’s is its strong brand identity that enables the company to differentiate itself from the other fast food and restaurants in China. In China, the popular foods are noodles and dimsum thus the Chinese people found McDonald’s to be different. McDonald’s offers products and services different from what other traditional Chinese restaurants in the country offer, such as birthday celebrations and party packages which have met the needs of the Chinese who usually live in small areas in the city of Beijing.
The company has the ability to offer diverse and innovative services including the McCafe which offers cakes, pastries, tea and coffee and the drive-thru service in order to serve a wide range of market. McDonald’s products are known for its burgers that tastes the same in every McDonald’s outlet. However, the company has managed to still localized its products by varying its menu and adding some products that can satisfy the local market. In Beijing and Shanghai, McDonald’s offers the Spicy Wings, Spicy Chicken Fillet Burger and the Spicy Fillet-O-Fish.
Additionally, some Chinese people think that eating at an American restaurant like McDonald’s which is far different from the traditional Chinese cuisine they are used to is a way of being part of the globalization or they way of connecting to the world (Watson, 2000). McDonald’s was able to used effective and strong promotion and communication tools to be able to capture and reach for a wider market. McDonald’s has gained its market primarily through its effective advertisement in radio, television and billboards. It recently launched the “You Got Beef Today? ” and the “Feel the Beef” television and print ads .
McDonald’s was the first fast food chain to launched a central advertising icon with its clown Ronald McDonald, also known as Uncle McDonald in China who was paired with Aunt McDonald to entertain children while they eat at McDonald’s and during party. McDonald’s has made Yao Ming, the famous Chinese basketball player, its endorser to be able to influence younger individuals. McDonald’s has a high quality customer service that even Chinese elites perceived McDonald’s to offer safe, clean and reliable products and quick service along with the air-conditioned restaurant, roomy tables, and courteous and friendly staff.
McDonald’s knows that the fast food industry is also a service industry so the relationship between the personnel and the customers is important. It recently launched the “Ask Me” program that “invites customer to ask crew members or post questions via its website about product quality or other concerns” (R&I, 2007). Through this program, McDonald’s has the chance to determine customers’ demands and further improve its products and services.