McDonald's

McDonald's Corporation, doing business as McDonald's, is an American multinational fast food chain, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. The brothers' business, which started off as a hamburger stand, soon became the company franchise as it is today. The Golden Arches is now the company's logo, which was introduced in 1953 at a location in Phoenix, Arizona. In 1955, Ray Kroc, a businessman, joined the company as a franchise agent and, in 1961, bought out the McDonald brothers. Previously headquartered in Oak Brook, Illinois, it moved to nearby Chicago in June 2018. McDonald's is also a real estate company through its ownership of around 70% of restaurant buildings and 45% of the underlying land (which it leases to its franchisees). McDonald's has over 40,000 restaurant locations as of 2024. The restaurants serve in total over 69 million customers daily in over 100 countries.

McDonald's is the world's second largest fast food restaurant chain by number of locations, surpassed only by Chinese chain Mixue Ice Cream & Tea as of September 2024. McDonald's primary offerings are hamburgers, cheeseburgers, and french fries. Other items on their menu include chicken, fish, fruit, and salads. Their bestselling licensed item is their french fries, followed by the Big Mac. The McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants. In 2018, McDonald's was the world's second-largest private employer with 1.7 million employees (behind only Walmart with 2.3 million employees), the majority of whom work in the restaurant's franchises.

McDonald's has been subject to criticism of its effects on the world, like obesity, low worker wages, and negative impacts on the environment.

Strengths of McDonald’s

• The company’s strength is focussed approach to capture a market and wide range of product development. That is totally the main factor that is contributing to the company’s success and make them a leader in this market segment. McDonald’s Strengths in the SWOT Analysis are as follows:
• It has a global brand presence in more than 120 Countries. That makes it the most recognizable brand in the industry.
• It has a wide range of products, starting from burgers, smoothies, shakes, ice cream and snacks items vary from place to place.
• The variety of food weather you’re eating it in America or in Europe the taste for both of them will be the same.
• It provides the food items according to the region, like in India the consumption of non-veg items are relatively low. So they have designed the different menu for vegans, it includes Mcveggie.
• One of the largest fast food chains in the world.
• Income of Mcdonald’s is diversified in 120 countries. That doesn’t make them to rely on one place for the earnings.

Weakness of McDonald’s

• The McDonald’s weakness is due to the internal strategic factors and the competition in the market. They can be handled, if the company tries to tackle these in a strategic manner.
• There is negative publicity about the products that McDonalds sell are fast food and contains a high amount of fat, carbs, salt and sugar. Due to which there is the trend of obesity in children.
• The US market for the burger outlet is almost saturated. So McDonalds have to look for taking its product internationally to other countries, which involves cultural and economic challenges.
• The dividend growth rate has been slowing down there is potential for that the investors will opt out from the McDonald’s.

Opportunities for McDonald’s 

There are an ample number of opportunities in the market which McDonalds can implement to get a sustainable development in the future. McDonald’s opportunities in the SWOT Analysis are as follows:

• There is an opportunity for the international expansion for Mcdonald’s.
• Can start the premium products at some of its franchise to check whether there is a change in the customer demand.
• Can start developing the supply chain for the related products in the market so that they can generate revenue from other segments as well.
• Can start selling the products which are giving health proposition to the customers.
• There is a lot of potential by designing the customer centric campaign to add value proposition to the brand.
• Focus on the opportunities to expand in the underdeveloped nations
• Use corporate social responsibility and reducing the impact on the environment and use it as a competitive advantage to attract the customers.
• Company can expand more in the caffeinated beverages industry and can be a direct competitor of Starbucks in the caffeinated beverages segment.
• Propose a joint venture with the supermarkets to sell the franchise in there marketplace.

Threats to McDonald’s

• Government policy on banning ingredients such as MSG(Monosodium Glutamate).
• The competition in the market is very high, the market is more saturated and intensity of competition is high
• In the new product segments the company have to compete with the market leaders such as Starbucks and Subway.
• The customer nowadays are health conscious they are more lean towards the products which are healthy.
• Most of revenue of McDonald’s is dependent on the U.S. market so in the recession there might be trickle down effect on the revenue.