Question

Company - McDonalds

S.W.O.T. Analysis

PESTEL Analysis

Lists in bullet format of: Resources, Capabilities, Core Competencies

A total of four findings of fact; 1 from each of the four functional areas of business: Management Marketing Finance Accounting

Answer 1

SWOT Analysis of McDonalds:

Strength:

• Mc Donalds have s strong global presence as the market leader among the fast food restaurant chain.
• It has the most recognized logos in the world.
• They own over 4000 restaurants over 119 countries across the world.
• They have always been effective in using economies of scale.
• Activities are socially responsible and also they are community oriented.
• They have the best management team and also there is a systematic process that is happening within the company.

Weakness:

• The ads are mostly targeting the children who barely have any purchasing power.
• There is a high employee turnover in the company which is definitely not a good side of the human resource management.
• The core product line is focusing on the fast foods, which are basically out of the healthy trend of eating.
• When franchisees are provided, there are chances of compromise occurring in the quality which could defame the whole company.

Opportunity:

• They could experiment more with an innovative product line, which could attract more customers.
• CSR activities can also be given a little bit more importance.
• The stores located in the posh areas could be updated so as the give a luxurious ambience and to attract more rich customers.
• Asian markets are left unexplored by the brand. This should be taken care of and the possibility of market expansion shouldn’t be left unconsidered.

Threat:

• The recession in the economy has badly affected the business.
• Emergence of moreover similar fast food chains has always been a threat to the company.
• People started becoming more health conscious and thus there has been e reduction in the level of customers thinking that the food is unhealthy.
• Heavy investment done on marketing has reduced the market share of the company.

PESTLE Analysis:

Political factors:

• There has been an increasing rate in the international trade agreements which act as an opportunity for the brand to excel.
• Various guidelines and policies that the government has made in case of the health and diet affect the consumer level.
• Mc Donalds have received criticism from the side of the government regarding the impact it has on the health of the customers.

Economic factors:

• There is a slow and stable growth that the company is facing in terms of the overall economic status of the company.
• The company easily gets affected by the fluctuations in the global market. For example there is a slowdown in the Chinese market which act as a threat at the same time the company has an advantage with the rapid growth of the markets in the developing countries.

Social factors:

• With the increasing disposable income of the society, more potential customers arise.
• There is a busy life style that is prevalent in the scene in the urban environment, which makes more people to adopt fast food style.
• When more people are thinking of healthy eating and consider fast food restaurant chains to pose a threat to their health, there are chances that the company loses its market share.
• They also have found the scope in the CSR activity promoting the sustainability factor after facing an issue on using plastic in their advertisement.

Technological factors:

• Automated business activities are mostly used in the processing which reduces the waiting time of the customers and thus increases the customer satisfaction and maximize the productivity.
• They also found a way to increase their sales through the mobile devices, which act as an opportunity.

Legal factors:

• There is an increasing number of health regulations in the workplace and schools which have a significant impact on the sales of the company.
• Vegan activists conduct protest against the usage of meat and this also has an implication on the company legally.
• Demand for raising the minimum wages of the employees is to be obliged by the company.

Environmental factors:

• As mentioned earlier, their CSR activities focus more on the sustainability aspect and thus providing an opportunity to get place in minds of the public.

Resources, Capabilities and Core competency:

• The company has tangible as well as intangible assets. There is a strong financial background for the company even when it was trying on cutting down the cist during the slower period of economy. The number of franchised outlets also sharply rose, leading to more customers. Usage of more automation in the processing and delivery gives an edge to the customer satisfaction level. Training is given to the employees in the shops for proper delivery and to maintain quality standards. Introduction of new and innovative products are always welcome in the market.
• The major capability of the organization is to align the tangible and the intangible resources together to get the lion share of the market and also maintain the value and customer satisfaction that it provides. The company also adapts to changes in order to achieve the goal. In case of the services provided, there is a stand out quality that can be seen which gives a differentiation from other similar rival companies.
• The ability to offer food without letting the customer wait in queues for longer time has acted as the core competency that the company has. Usage of automated system for ordering, billing, food processing etc also helped the company to gain that advantage over their rivals. The company provides food to the customers at their convenience. They also have an upper hand in the way their staffs are. The company employs trained and experienced staffs. They also have an innovative range of product line which is different from the traditional concept of the food offered at their rival stores.