Swot Analysis On Mcdonald

SWOT Analysis on McDonald’s:: Strength:: •

McDonalds has built up huge brand equity. It is the No. 1 fast-food company by sales, with more than 31,000 restaurants serving burgers and fries in almost 120 countries. Sales, 2007 (11,4009 million), 5.6% sales growth.

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Globalization: 31,000 restaurants serving 120 countries. Of the 31,000 restaurants at least14,000 restaurants in the US

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Good innovation and product development. It continually innovates to retain customers in the business.

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The McDonalds brand offers consumers choice, reasonable value and great service

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Large amounts of investment have gone into supporting its franchise network, 75% of stores are franchises

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Loyal staff and strong management team.

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Very strong brand name

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Recognizable characters

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Large target group

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New stores almost 100% guaranteed to succeed

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Ability to adapt when faced with criticism

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Play Area for children

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successful advertisement (i’m loving it)

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Great partnership(coke cola)

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clean environment and play ground for kids

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professional training for employees(hamburger university)

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mcdonalds is able to generate more sales because of its brand recognition

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Active Childrens Charity: The Ronald McDonald House

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Adjusted Ingredients and product offerings to comply with upgraded health standards deemed necessary by the USDA

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Earns revenue not merely by fast food sales, but also as a property investor, a franchiser of restaurants.

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Branded (name recognized) menu items such as Big Mac, Quarter Pounder and Chicken McNuggets

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Strong brand name, image and reputation.

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Large market share.

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Strong global presence.

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Specialized training for managers known as the Hamburger University.

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McDonalds Plan to win focuses on people, products, place, price and promotion.

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Strong financial performance and position.

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Introduction of new products.

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Customer focus (centric).

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Strong MCD's performance in the global marketplace.

Weakness::: • • • • • •

Many other similar competitors Until recently, had very few options for eating healthy Negative image due to “Fast Food Nation” and other media sources Advertisement techniques that target children Consumers use disposable income to purchase fast food meals so when the budget it treatened, consumers redirect these funds Public perception: McDonalds has been impacted by negative press like the documentary "Supersize Me" by Morgan Spurlock in which he contributed our societies obesity to McDonalds and other fast food chains.

• product development • price • management of franchisees/joint venture • • • • • • • • •

Core product line out of line with the trend towards healthier lifestyles for adults and children. Product line heavily focused towards hot food and burgers[3]. Seasonal Quality issues across the franchise network. Unhealthy food image. High Staff Turnover including management Customer losses due to fierce competition. Legal actions related to health issues; use of trans fat & beef oil. Uses HCFC-22 to make polystyrene that is contributing to ozone depletion. Ignoring breakfast from the menu.

Opportunities::

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“Going green” – energy management, improving packaging efficiency, environmentally friendly refrigerants, and partnering with Greenpeace for rainforest protection New store looks/styles – McCafe coffee shop, and “forever young” redesign Charity – The Ronald McDonald House provides a cheap or free place to stay for parents of sick children. Over 250 worldwide in 48 countries. Funded primarily by donations and Joan Kroc (founder Ray Kroc’s wife) Innovation: Continued adaptation to societies needs such as USDA and Supersize Me upgrade. Conservation: Researching green energies and green packaging solutions and incorporating these findings as a part of their marketing strategy and advertisements. Exploration: Create new product offerings. Continue to use technology to influence revenue strategy: possibly use text messages to deliver specials offers to individuals who sign up for such services. internationalization

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growing dinning-out market(especially for young generations and middle age group)

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Joint ventures with retailers (e.g. supermarkets). Consolidation of retailers likely, so better locations for franchisees. Respond to social changes - by innovation within healthier lifestyle foods. Its move into hot baguettes and healthier snacks (fruit) has supported its new positioning. Use of CRM, database marketing to more accurately market to its consumer target groups. It could identify likely customers (based on modelling and profiles of shoppers) and prevent brand switching[4]. Strengthen its value proposition and offering, to encourage customers who visit coffee shops into McDonalds. The new “formats”, McCafe, having Wifi internet links should help in attracting segments. Also installing children’s play-parks and its focus on educating consumers about health, fitness. Continued focus on corporate social responsibility, reducing the impact on the environment and community linkages. International expansion into emerging markets of China and India. Growing health trends among consumers. Globalization, expansion in other countries (especially in China & India). Diversification and acquisition of other quick-service restaurants. Growth of the fast-food industry. Worldwide deregulation. Low cost menu that will attract the customers. Freebies and discounts.

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Threats:: •

Current world economic standing: the company's revenue streams are diversified, but depending on the the length of this "recession", they will inevitably be negatively impacted by the trickle down effect.

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More Casual Dining Restaurants increasing their "burger" offering and decreasing the price: Restaurants like Ruby Tuesdays have $6 burger meals that they strongly advertise…If you're not in a hurry, which one would you choose? Public Health Crisis: with a growing number of obesity cases among Americans, fastfood chains like McDonalds will continued to be overshadowed by their previous product offerings (Supersized Meal, no fruits or yogurt, slim salad selection). Health professionals and consumer activists accuse McDonald's of contributing to the country’s health issue of high cholesterol, heart attacks, diabetes, and obesity. The relationship between corporate level McDonald's and its franchise dealers. McDonald’s competitors threatened market share of the company both internationally and domestically. Social changes - Government, consumer groups encouraging balanced meals, 5 a day fruit and vegetables. Focus by consumers on nutrition and healthier lifestyles. Competitive pressures on the high street as new entrants offering value and greater product ranges and healthier lifestyles products. E.g. subway, supermarkets, M&S. Recession or down turn in economy may affect the retailer sales, as household budgets tighten reducing spend and number of visitors. Pressure groups - environmental more health conscious customers

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threats from local compietitors from different countries

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the economic downturn

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playing in a mature and saturated industry

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foreign currency fluctuations is another problem for global companies like mcdoanlds

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fast food industry is becoming an increasingly competitive sector

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Strategy Of McDonald’s THE 7 P's Of Mc DONALDS' Strategic Approach: PRODUCT: Mc Donald’s product portfolio primarily comprises of vegetarian and nonvegetarian burgers. The vegetarian burgers like Veg surprise, salad sandwich, Mc Aloo Tikki Burger, Mc veggie burger are offered to the customers. Non-vegetatarian burgers include Chicken Mc grill, Mc chicken burger, Fliet of fish and chicken maharaja burger. Along with these french-fries, veg pizza mc puff, wrap chicken

Mexican, wrap paneer salsa, potato wedges, soft serve pineapple and choclate ice creams, Mc swirl soft drinks, coffee and Mc shakes are also offered to increase the variety in the product portfolio. Mc Donalds also provides mean combos with medium fries and medium soft drink, happy mean with small soft drink, econo meals with small soft drink and value meals with potato wedges and small soft drink. PRICE: Mc Donalds vegetarian burgers are priced between Rs 20 and Rs 48. Wrap paneer salsa is priced at Rs 45-50. The non vegetarian burgers are priced between Rs 30 and Rs 60. Wrap chicken Mexican is priced at Rs 55. Medium French fries are priced at Rs 28, potato wedges at Rs 20, soft serves at Rs 35, mc swirl at Rs 12, medium soft drinks at Rs 20 and medium shakes at Rs 45. PROMOTION: At Mc Donalds the prime focus is on targeting children. In happy meals too which are targeted at children small toys are given along with the meal. Apart from this, various schemes for winning prices by way of lucky draws and also scratch cards are given when an order is placed on the various mean combos. In fact, the various econo meals and value meals also signal to the customer that buying separate items results in greater value for money for the customer. PLACE: Mc Donals’ outlets are very evenly spread throughout the NCR region. Mc Donalds does not offer home delivery but its outlets are very readily accessible. Mc Donalds also offers take away drive through facilities. PEOPLE: The employees in Mc Donalds have a standard uniform and Mc Donalds specially focuses on friendly and prompt service to its customers from their employees. PROCESS: The food manufacturing process at Mc Donalds is completely transparent i.e. the whole process is visible to the customers. In fact, the fast food joint allows its customers to view and judge the hygienic standards at Mc Donalds by allowing them to enter the area where the process takes place. The customers are invited to check the ingredients used in food. PHYSICAL EVIDENCE: Mc Donalds focuses on clean and hygienic interiors of is outlets and at the same time the interiors are attractive and the fast food joint maintains a proper decorum at its joints.

The Main Objectives of McDonald’s Business are: Sales – Sales revenue is the total amount of money a company has earned by providing their service or selling their stock. Growth – An increase in the Business capacity to produce more stock or provide better or greater service. Profit – Residual value gained from business operations after cutting out expenses such as stock cost etc. Customer Satisfaction – Providing service to customers to their satisfaction level such as hygienically clean place or high quality food. SMART Before a business can set objectives it is important that they follow the SMART criteria. •Specific – Detailed and Exact •Measurable – Targets should be measurable •Achievable – Something that can be achieved •Realistic – Targets must be realistic, so that they can be met • Time Specific – That can be achieved by a deadline “ It’s What I Eat And What I Do…I’m Lovin’ It ” PLAN –

Their plan is to deepen their connection with the customer by providing great service ad experience “in every restaurant, every time.” Their usage of different activities allows McDonald’s and the Customers to have a relation between them.

Goods And Service Design:: Strategies a) Advertisement: McDonalds implements this strategy by making aware people about their products and services through advertising on TV, newspapers, brochure. b) Customers Relationship: The personals of customer relationship department convince the people and customers about services. Results 1. Inside the McDonalds: a) Achieving Objectives: By implementing this strategy McDonalds is achieving its objectives, i.e. it’s earns profit, customers are satisfying, and the services offered to customers sharing in revenue growth of the country. So it helps to make further plans, strategies, making strengths, expansion of franchises etc. b) Business Development: As customers become attractive therefore McDonalds opens new branches. So it helps in expansion of business. 2. Outside the Organization: Improving social life: These strategies are improving quality of life as well as the social and environmental awareness in general public.

Location Selection: Strategies McDonalds makes and implement its location strategy in following way: Business Areas: They open their branches in business areas where they target the corporate people and the working class to dine in and have their timeout for breakfast and lunch. Play Lands and Shopping Areas: They try to introduce their services according to target customers, i.e. capture the customers in the amusement parks and in markets such as the branch in Fortress Stadium, Model Town link road etc. Results Convenience: Customers feel comfort ability when a branch is in near vicinity to their work place. Customer Gaining: Due to the good environment the company has an ability to gain their customers to their locations.

Layout Design:: Strategies

a) Exterior: McDonalds sets its premises in proper manner to handle any number of customers easily. The building design is standard world wide but it may be have some difference in size or in exterior according to the location. It enables them to save time, satisfy their customers, comfortable environment for both employees and customers. b) Interior: McDonalds uses the same interior pattern as it’s used internationally. It may vary according to the premises size. Results a) Brand Recognition: Homogeneity in layout design and franchise settings strikes a clear brand image in the minds of the customers. The efficiency level of personnel also leaves a good impression on the minds. b) Customer Satisfaction: Through a universal image, layout design and the brand image in the minds of customers results in customer satisfaction.

Human Resource Being partially in pure services and goods production sector, McDonalds exercises a good strategy for its human resources e.g. Right Person on Right Job: McDonalds allocates its human resource in different areas according to the abilities, qualifications and experiences of employees. They appoint a marketing expert for marketing, accountant for accounts etc. Trainings: McDonalds provide training opportunities for its employees who need training in a particular area. So it enables the organization to achieve its goals efficiently. Separate Departments for Different Functions: McDonalds has different departments for different functions. Marketing department consists of marketing experts who perform marketing analysis and finance department consists of finance experts who arrange and manage finance etc. Proper Utilization of Resources: As there are many experts in different areas, so they use all available resources and opportunities properly. They provide services to their customers efficiently, which satisfies customers and they achieve their goals successfully. Employee’s Job Satisfaction: McDonalds provides training opportunities to its employees to improve their skills. So it results in enhanced employee performance and they become more interested to work in good manner, which gives a good reputation to the organization. Competency: McDonalds trains it’s employees of all departments to enhance their capabilities and to improve their skills and therefore employees provide right product to right customers on right time. So it enables the organization to compete in the market.

Observation: Local Sourcing Is Key for Truly Indian Products: McDonald's India is committed to sourcing almost all of its products from within the country. For this purpose, it has developed local Indian businesses, which can supply them the highest quality products required for their Indian operations. Fresh Lettuce is sourced from Pune, Delhi, Nainital and Ooty; Cheese from Dynamix Dairies, Baramati, Maharashtra; fresh Buns from Mrs. Bector Foods, Phillaur, Punjab & Khopoli, Maharashtra; Sauce from Mrs. Bector Foods, Phillaur, Punjab, Chicken Patties, Vegetable Patties, and Veg.Pizza McPuff from Vista Processed Foods, Taloja, Maharashtra. Dairy Products are sourced from Amrit Food, Ghaziabad, UP. All our suppliers are HACCP certified. Respect for the Indian Customs and Culture: McDonald's worldwide is well known for the high degree of respect to the local culture. McDonald's has developed a menu especially for India with vegetarian selections to suit Indian tastes and culture. In line with its respect for local culture, India is the first country in the world where McDonald’s does not offer any beef or pork items. McDonald's has also re-engineered its operations to address the special requirements of vegetarians. Special care is taken to ensure that the vegetable products are prepared separately, using dedicated equipment and utensils. This separation of vegetarian and non-vegetarian food products is maintained throughout the various stages of procurement, cooking and serving. So much so that the mayonnaise and the soft serve are also 100% vegetarian. Also in India, only vegetable oil is used as a cooking medium. An Employer of Opportunity: McDonald's India is an employer of opportunity, providing quality employment and long-term careers to the Indian people. The average McDonald's restaurant employs 60-80 people from crew to restaurant manager. McDonald's world class-training inputs to its employees can be seen in the present close to 4000 employees currently in India. Quality, Service, Cleanliness & Value The USP of McDonald’s is Quality, Service, Cleanliness & Value for money which means we focus on providing our customers high quality products, served quickly with a smile, in a clean and pleasant environment at an affordable price. The McDonald's philosophy of QSC&V is the guiding force behind its service to the customers. McDonald’s menu is priced at a value that the largest segment of the Indian consumers can afford. McDonald’s does not sacrifice quality for value – rather McDonald’s leverages economies to minimise costs while maximizing value to customers. Community Partnership McDonald's believes in giving back to the community it serves. Wherever McDonald's goes, it becomes a part of the community it operates in and contributes towards the development of the locality. For example, McDonald's has introduced the concept of ‘Litter Patrols’ – McDonald's employees go around the market every day, picking

up garbage left behind not only by customers from McDonald's restaurants but also by other visitors in the area. The result is a cleaner neighbourhood.

Motivation: People are the most important resources of an organisation. They ensure the interaction of financial, industrial, and other resources so that the organisation can function. Nowadays experienced managers realize that he financial reward cannot stay the only kind of an employee encouragement. The employees' needs should be viewed as an entity that leads to the search of non financial motives. There exist many non financial motives that are connected with the employee's satisfaction of needs, such as his/her recognition, participation in the decisionmaking, self-fulfillment, personal growth and others. The practice shows that the full use of human resources of an organisation is one of the most significant advantages, which allow companies to occupy the leading positions in the world market. The 'McDonalds' company flourishes owing to the logical integration of the staff into the problem solving. The company adheres to the principle: 'The result is done by a man'. 'McDonalds' examines its employees as the primary source of progress in the field of quality and productivity. This organisation has based its success on the motivation theories having altered only some aspects of them. 'McDonalds' adheres to four simple principles, which give the possibility to increase the performance of its employees: 1. The company must elaborate different systems of motivation for every department. 2. The personnel must have clear and attainable aims. It is better to have one aim per a person. 3. The aims must change: managers should have one aim for half of a year. For example, at first a manager examines the number of clients, then he/she examines the number of returning clients; and then he/she should analyze the increase in business sales. This method gives the possibility to find new abilities of employees and to check new methods of work. 4. The rise of salary amount must be sensible for an employee. The 'McDonalds' company applies three components of the motivation system: financial encouragement, non financial encouragement, and social policy. The research of the 'McDonalds' company, its strategy and structure shows that only a simultaneous fulfilment of employee's needs will increase an employee's performance Summarising, the 'McDonalds' company has effective motivation system that makes it possible to increase employees' performance, and hence the company's productivity. The situational approach applied by 'McDonalds' administration staff has turned out to be the most relevant to the current situation. The administrators have used the specific techniques on the basis of motivation theories. Having applied the procedure of assembly line in food preparation, 'McDonalds' has ensured the standard quality of the production and the high

performance. Besides, the company has implemented effective motivation strategy that is based on the existing motivation theories. Consequently, on the basis of the research we can say that every company has its own system of behaviour explanation and every concrete case should be examined as the 'McDonalds' company case.

Recommendations

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The introduction of the Salads Plus menu. This is now a permanent feature on the McDonalds menu, which brings a healthier, lighter focus to the original menu, consisting of a range of products that have 10 grams of fat or less, per serve. Introducing nutrition information panels on the packaging of regular menu items. This allows for enhanced consumer information and education, enabling individuals and families to make better dietary choices. Introducing hamburger buns that are low in sugar. Reducing the calorie / kilojoule (energy) and sugar content of Salads Plus muffin and yoghurt menu items. Launching an alternative (healthier) Happy Meal for children, containing fruit and vegetables. Using a liquid canola cooking oil blend in restaurants, to aim for enhanced cooking methods. Introducing a new breakfast menu known as “Quickstart”. McDonald’s have teamed up with some of Australia’s favourite brands to launch this new menu, which offers cereals, fruit, yoghurt and juices.

McDonald’s has made available super-size portions, advertised as offering good value for money. In response to the obesity epidemic sweeping the country, as well as the poor nutrition these super-size portions offer, McDonald’s has decided to phase out its super-size French fries and soft drinks later this year. This move is another one of McDonald’s steps to appeal to health- and weight-conscious consumers. 

McDonald’s needs to be aware of the situation and design jobs keeping in mind numbers of factors which affect the performance in work place.

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McDonald’s don’t only need to motivate individuals. They should provide them with an environment to be self motivated.

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The company should take necessary actions to cure the problem of stress by making job more interesting.

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Effective communication of all kinds is crucial to the success of every organization. (Mc Donald’s)

Conclusion and Suggestions: Suggestions In the end of our report we have following suggestions: • McDonalds should revise its product prices.

• Company should work on all of its products • There is still a lot of opportunities for McDonalds outlets

to increase number of

After the analysis of our project we have concluded our report as under: • McDonalds is maintaining its product quality according to the international standards • The customization of the product and services according to the culture of has resulted in customer satisfaction • McDonalds has properly covered the business areas with in cities e.g. Lahore • McDonalds maintains a good environment in every premise. • McDonalds has a learning environment for employee development and customer satisfaction.