SWOT Analysis of McDonald’s Company

Subject: Company Analysis
Pages: 5
Words: 892
Reading time:
4 min
Study level: Bachelor

Introduction

I am going to analyze McDonald’s internal environment using SWOT to determine its strengths, weaknesses, opportunities, and threats. I will go ahead to provide strategies that the company should use to maximize its strengths and opportunities and minimize its weaknesses and threats. I will also address an effective communication plan to promote profitability and competitiveness. I will talk about the corporate social responsibilities of McDonald’s and their impact.

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SWOT Analysis of McDonald’s

  1. Strengths
    1. The company ensures that what they serve customers is safe and of good quality. They have mastered a technique that they use to provide customers with quality food.
    2. The company offers affordable food to customers in the market. This enables the company to attract more customers.
  2. Weaknesses
    1. There is a lack of employee satisfaction due to low salaries and poor working conditions.
    2. Since it is one of the busiest food chains, the company faces a lot of interruptions in its supply chain.
  3. Opportunities
    1. There is a growing demand for healthy food in the market from customers.
    2. The number of people using the internet is increasing each day.
  4. Threats
    1. Nowadays, people understand the health dangers that come with eating junk.
    2. There is intense competition in the fast food industry (McDonald’s, 2019).

SWOT Analysis Strategy

McDonald’s should use business-level strategies to maximize its strengths and make use of opportunities. To maximize its strengths, the company should use a cost leadership strategy. This involves a set of activities taken to produce products with attributes that are acceptable to customers at the lowest cost to that of the rivals in the market (Michael, 2020). The second strategy that the company should use to make use of the opportunity and maximize its strengths is focused differentiation. The strategy requires the company to meet the requirements of the market. For example, adopting online delivery products in the market.

The strategies that the company should adopt to minimize weaknesses and threats are differentiation and cost leadership. The differentiation strategy will enable McDonald’s to produce products that customers perceive as different from the ones in the market. To achieve a competitive advantage, the company should ensure that its products are unique and affordable to customers (Michael, 2020). On the other hand, cost leadership strategy involves actions taken to produce products and services that are acceptable to products. One of the ways to achieve this is to develop policies to enable effective hiring and retention of employees to keep costs low while maintaining employee satisfaction.

Competitiveness Strategy

There are various ways MacDonald’s can gain a competitive advantage in the market. First, the company should focus on activities that are geared towards increasing the level of customer satisfaction. Meeting the needs of customers should be the company’s top priority. For example, they should conduct market research to determine the needs of their customers (Michael, 2020). Secondly, the company should lower its cost to offer affordable products. They should adopt effective cost reduction strategies to ensure that customers get products at low cost and employees are also satisfied.

Profitability Strategy

To maximize profitability, McDonald’s should manage its cost-effectively and provide a conducive work environment. First, the company should ensure that wastage is reduced. They should avoid unnecessary expenditure and direct the funds to major areas of operations such as training employees to equip them with appropriate skills (Michael, 2020). This will ensure that the employees provide quality products and services. The next strategy is to establish a conducive working environment. The organization should ensure that employees are satisfied.

Communications Plan

Effective communication is required to ensure the message is communicated to stakeholders. The first strategy is to arrange physical and virtual meetings with relevant stakeholders to communicate the information (Verčič & Špoljarić, 2020). The strategy is effective because it enables stakeholders to share information and obtain instant feedback. It is possible to know whether the audience understands the content or not. The second strategy is to use memorandums to communicate the message. The memo provides all concerned with the same information. Therefore, there is less likelihood of misunderstanding between the recipients of the intended content.

Communication strategies to be adopted should promote profitability. The first strategy for McDonald’s is to promote e-mail communication. This communication tool is free hence saving the company unnecessary costs. In addition, with this communication, the company can meet various stakeholders both within and outside the organization (Verčič & Špoljarić, 2020). The second strategy to use is the instant messaging communication approach. It is an essential tool for fast-paced teams who need to communicate and collaborate in real time. Therefore, it gives leaders the ability to communicate effectively in the market.

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Corporate Social Responsibility

As a responsible corporate citizen, McDonald’s focused on giving back to society and green operations. The company has McDonald’s house charities and also engages in community activities such as the kidathon. At the heart of the company’s brand is to relate well with the community. The company also engages in corporate social responsibility by engaging in green operations. It has upped its commitment to help lower the effects of climate change. The company pledged to reduce its emission from its stores and offices by 36%. These efforts have a positive impact on the company because they improve brand recognition. Corporate social responsibility also creates a positive relationship with stakeholders. It helps the company to relate well with stakeholders such as customers.

References

McDonald’s. (2019). People Safety. 

Michael A. Hitt. (2020). Strategic Management: Concepts and Cases: Competitiveness and Globalization (13th ed.). Cengage Learning.

Verčič, A. T., & Špoljarić, A. (2020). Managing internal communication: How the choice of channels affects internal communication satisfaction. Public relations review, 46(3), 101926.

Zhang, R., Wu, C., Yin, J., Liu, L., Cheng, L., & Xin, X. (2020). Corporate Social Responsibility (CSR) Survey—KFC, McDonald’s. Academic Journal of Business & Management, 2(8).