McDonald's SWOT Analysis

Running head: McDonald’s SWOT Analysis 1
McDonald’s SWOT Analysis
[Institutional Affiliation(s)]
MCDONALD’S SWOT ANALYSIS 2
Abstract
McDonald’s being a fast food giant is one of the largest in the food and breakfast market with
tentacles reaching a host of countries in the world. It is capable of maintaining the leading
position in the fast-food market because of its unequaled strategies to address internal and
external factors that give it a competitive advantage over its rivals. This SWOT analysis
addresses some of the most important issues that concern McDonald’s role as a leader in the fast-
food market.
Keywords: SWOT, Strength, Weakness, Opportunity, Threat

McDonald’s SWOT Analysis
McDonald’s being one of the largest fast-food chains in the world is a giant in the food
and breakfast market with tentacles reaching a host of countries in the world. Its ability to
maintain the leading position in the fast-food market is borne out of its unequaled strategies to
address internal and external factors that give it a competitive advantage over its rivals.
McDonald’s ability to maintain considerable success over a long time is down to its great focus
on the best ways to deal with emerging challenges in the global breakfast and fast food market.
Some of the most important issues that concern McDonald’s role as a leader in the fast-food
market will be addressed by this SWOT analysis.
Strengths
McDonald’s strengths come from establishing a uniquely strong brand name that
continues to dominate the fast-food chain utilizing constant promotion of its products and
services, and issuing of franchises to operate 37241 restaurants all over the world as at the year
2018 and ranks it the second largest fast-food chain in the world after Subway (Jurevicius, 2020).
McDonald’s boasts a table-topping revenue of $38.52 billion in 2018 according to Statista, which
makes it the leading quick-service restaurant (QSR) in the United States in 2018. Although
competition is ripe in the fast-food market, McDonald’s can maintain a competitive advantage
because of several years of building and improving its brand name. Additionally, McDonald’s
strength manifests in its economies of scale by maintaining a fixed cost for all its products in all
its restaurant locations, making McDonald’s the cheapest restaurant for consumers of fast foods.
The vast network of restaurants owned by McDonald’s gives it a competitive advantage over its
rivals by using its market power to require or compel suppliers to lower their prices so that foods
and beverages are cheaper at McDonald’s outlets. In addition to that, McDonald’s wide audience
reach is a strength that gets it ahead of its rivals in brand awareness and providing better services.
McDonald’s also provides self-service with kiosks, mobile order, and payment systems. These
are considered technological advancements in its service provision making McDonald’s role as a
restaurant for the future unequaled.
Weakness
Just like strengths, McDonald’s also has its weaknesses in the sense that McDonald’s runs
a very complicated franchising model, which puts the company at risk of mismanagement, low-
income generation, and customer dissatisfaction because it lacks total control over the daily
activities of the franchisees. In the same vein, McDonald’s faces a serious problem with
intrusions in its supply chain limiting the availability of products and having a direct impact on
its services by reducing revenues. McDonald’s has in recent times suffered reputation damage as
a result of employees’ dissatisfaction with wages. Customers also showed a decline in their
consumption of McDonald’s breakfast menu meaning that it is gradually losing the charm in its
breakfast menu. McDonald’s focus is majorly on food and beverage products, failing to diversify
its products and causing a major weakness exposing the firm to slowdowns in the restaurant
market. The same inadequate diversification ensures that McDonald’s only market is the western
economies, a situation that can prove devastating in case of an economic downturn in the west.
Opportunity
Digitalization is helping many organizations create a competitive edge over their rivals
(Greenspan, 2017). It can get McDonald’s to a level of higher competitive advantage by

deploying digital marketing channels for marketing. The major opportunity for McDonald’s is to
undertake aggressive market exploration in developing countries and emerging economies.
Market development strategy can be very useful for McDonald’s to establish operations in
emerging economies like China, India, Singapore, Malaysia, and Taiwan where demand for fast
food is growing daily.
Threat
McDonald’s is currently feeling the pressure of stiff competition from a range of fast-
food chains. Leading competitors like Subway, Burger King, and Wendy’s have been about a bit,
but Chick-fil-A has overnight, turned to “McDonald’s biggest competitor in the fiercely
competitive QSR space” (Kelso, 2018). McDonald’s, in trying to keep an edge over its
competitors, incurs more operating cost in maintaining product quality and in trying to cope with
constant pressure from government regulatory agencies, especially when expanding to markets
overseas.
References
Greenspan, R. (2017, February 5). McDonald’s SWOT analysis & recommendations. Panmore
Institute. https://panmore.com/mcdonalds-swot-analysis-recommendations
Jurevicius, O. (2020, January 10). McDonald's SWOT analysis (5 key strengths in 2020). SM
Insight. https://strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-
analysis.html
Kelso, A. (2018, December 20). Chick-fil-A is now McDonald's biggest threat. Forbes.
https://www.forbes.com/sites/aliciakelso/2018/12/20/how-chick-fil-a-positioned-itself-to-
be-mcdonalds-biggest-threat/#4dfb9c1f1ae7
Statista. (n.d.). Leading QSR chains by systemwide sales in the U.S. 2019.
https://www.statista.com/statistics/315469/leading-qsr-chains-by-systemwide-sales-us/

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What are McDonald's main strengths according to the analysis?

What are some of McDonald's weaknesses?

Running head: McDonald’s SWOT Analysis 1

McDonald’s SWOT Analysis

Keywords: SWOT, Strength, Weakness, Opportunity, Threat

McDonald’s SWOT Analysis

market will be addressed by this SWOT analysis.

restaurant for the future unequaled.

(Greenspan, 2017). It can get McDonald’s to a level of higher competitive advantage by

undertake aggressive market exploration in developing countries and emerging economies.

food is growing daily.

Greenspan, R. (2017, February 5). McDonald’s SWOT analysis & recommendations. Panmore

Jurevicius, O. (2020, January 10). McDonald's SWOT analysis (5 key strengths in 2020). SM

Kelso, A. (2018, December 20). Chick-fil-A is now McDonald's biggest threat. Forbes.

Statista. (n.d.). Leading QSR chains by systemwide sales in the U.S. 2019.

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