McDonalds: SWOT analysis Essay
McDonald, a renowned name in fast food industry since its establishment has penetrated in several market including international markets. McDonald is committed to offer best quality food and attractive deals to its customers along with multiple strategies to sustain its position and in the industry and growing profits. Despite of competition and economic recession McDonalds maintained its position by utilizing its resources effectively and focusing on best use of its strengths.
McDonald being one of the major market players in the fast food industry has maintained its position over many decades.
However, several factors play important role in determining the way to success for a company.
McDonalds is aiming to provide quality food to its customers worldwide; therefore its products are complying with the health standards, hence enabling the company to meet the needs of health conscious people and build long-term customer relationship. Globally, McDonalds is serving in more than 118 countries targeting as many people as it can hence giving it an edge over its competitors limited by geographic boundaries.
McDonald’s penetration in international markets by opening franchisees with offering consistent product taste and quality increased the brand equity of McDonald worldwide.
As McDonald is emphasizing on giving quality food to its customers therefore it price products relatively high compare to local competitors who prefer cost leadership strategy. Therefore, a large price sensitive segment of consumers is attracted to promotions of McDonald’s competitors resulting in draining of profits.
Health awareness program are enabling people to learn about the importance of quality food, thus providing an opportunity to company to attract these potential customers. Moreover, McDonald can expand its business in more international markets that are not being catered by any other competitor. Innovative programs to promote product such as emailing customers about new products, sponsoring green environment programs and more packaged deals can be offered to new and existing customer that would provide an opportunity to the company to increase the brand equity and skim the profit from the large market share.
Also read Burger King SWOT Analysis
Starbucks, Burger King and Dunkin’ Donuts are also targeting the same customer segment that McDonald is catering which eventually may shift the customers profit to competitors by switching of customers to other food restaurants (Arndt, 2007). This intensive competition and maturity of industry will threaten the position of company in long-run. Meanwhile, during recession consumer behavior patterns are changed a lot and current situation of recession in economy is negatively affecting the McDonald’s revenue that has remarkable impact on the declining profits.
Increasing health problems among heavy users such as of obesity provide new entrants to capture existing market share with new innovative diet products (such as less calorie burger) that would result in shifting of variety seeking consumers away from McDonalds. In addition to that negative word of mouth and rumors will destabilize the image of company as once happen when a customer claimed a blood vessel a worm; found in hot dogs.
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