McDonald’s just like other well-known fast-food restaurants, it has widened its territories from USA to different corners of the world. It has a strong global presence and consider as a market leader in both the domestic as well as the international markets. Now there are about 31,000 McDonald’s restaurants serving 121 countries. And from the thirty-one thousand branches 14,000 of them is in the US since American was the largest consumer of the company. Furthermore, it has its own training facility, Hamburger University in order to train their staff.
There are more than 250,000 employees graduate from there annually. It’s also ranked number one in Fortune Magazine’s 2008 list of most admired food service companies. Besides that, establishment of the Ronald McDonald House which actively take part different charity activities, mostly on children’s charity, can be one of the strength of the company because by interfere in charity works reputation of McDonald’s can be increased and improved the performance of the company eventually. In addition, it has branded menu items such as Big Mac, Chicken McNuggets, which further promote McDonalds.
It also successfully and easily adapts the global restaurants to appeal to the cultural differences regarding the regions where it set up. For example, they serve beef and chicken in Malaysia, pork in Taiwan, lamb in India and provide separate entrance for families and single women in Middle East. As nowadays people are concerning the nutrients that brought by the food they consumed, they will consider not to eat fast food because most of them may bring negative effects to their health.
To overcome the problem, McDonald’s has then adjusted the ingredients and product offerings such as salads and fruits to upgrade the health standards of their foods. In fact, the health standards are approved by USDA, an authorized firm that in-charged in approving food standards. That nutrition information are also printed on all packaging and added to its website. Besides selling fast foods, McDonald’s also doing investment on property and franchising to earn revenue. Weaknesses There are also some significant weaknesses for McDonald’s.
One of them is the advertisement technique used by the company. Most of the advertisements are targeting to the children which may lead to less consumption as children don’t have financial source to purchase. Their purchasing power is much lesser compare to adults. Besides that, public perception about McDonald’s can also affect the company’s performances. The McDonald’s has been impacted by negative press like the documentary “Supersize Me” by Morgan Spurlock in which he contributed our societies’ obesity to McDonald’s and other fast food chains.
Furthermore, high employee turnover has become one of the weaknesses as well. It has to spent more money in training. In addition, too many competitors (etc. fast food restaurants such as pizza hut, KFC, A;W and so on) emerged nowadays and lead to price competition. Thus, this will cause in low revenue generate in McDonald’s. Opportunities In today’s health conscious societies, the introduction of a healthy hamburger is a great opportunity. McDonald’s has become the first QSR (Quick Service Restaurant) to get FDA approval on marketing a low fat low calorie hamburger.
In order to fulfil their social responsibility, they use ‘green’ energy and packaging which will work as a part of their promotional effort. Besides that, McDonald’s is quite flexible in adapting the society needs. It can adapt the needs by undergo an innovative product line. For examples, sell pork burger in Taiwan and beef burger in Malaysia. It also directed put on efforts on convenience categories for the workers, breakfast, chicken and beverage. It provides optional items that are regarded to be the allergens free food items as well such as gluten free and peanut free.
Moreover, McDonald’s can even upscale some of its restaurant settings at luxurious locations to attract different target market. Like the one they have in New York City on Broadway. It can slow down the level of expansion in order to increase the profitability of its own. Threats McDonald’s has been sued multiple times regarding to its unhealthy food, usually with addictive additives and resulting to the obesity epidemic in America. One of the documentaries Super Size Me by Michael Spulock in 2004 has direct attacked the image of McDonald’s.
This is because the guy went on all McDonald’s diet for 30 days and wound up getting cirrhosis of the liver. However, after this incident happened, McDonald’s never pushed the super size advertisement at the dive thru window. Moreover, there is enormous emerging of major fast food competitors such as Burger King, Starbucks, KFC, Wendy’s and any mid-range sit-down restaurants. Then, that is their standard pricing for food items because of the foreign currency fluctuations and also the recession problems.
It would negatively impact the holding position of the firm according to their revenue streams, even though they are quite diversified. Besides that, McDonalds’s entice children as young as one year old into their restaurants with special meals, toys, playgrounds and popular movie character tie-ins. This benchmark of marketing strategy of McDonald’s which called ‘cradle to grave’ that focuses on kids has been strongly criticized by parents as this would take it as a trend to their adulthood later on. Last but not least, the heavy investment on promotional campaigns which also decrease the gaining of market share.