SWOT analysis, McDonald’s

Introduction

McDonald’s is a global organization that operates in many different nations. The company has come to be recognized as one of the most popular fast food restaurant chains in the world. Although many people enjoy the convenience of eating at McDonald’s, there has also been some controversy about the lack of healthy ingredients in the food served at McDonald’s.

Some have claimed that it is the responsibility of the fast food chain to fight obesity by offering healthier products. The company has made efforts in recent years to seek out healthier products. Regardless of health concerns, the McDonald’s company has still managed to maintain high levels of profitability. An SWOT analysis of the McDonald’s organization will be provided.

Order custom essay SWOT analysis, McDonald’s with free plagiarism report

450+ experts on 30 subjects Starting from 3 hours delivery

Get Essay Help

History and Background

The first McDonald’s restaurant was opened in 1940 in San Bernardino, California. Richard and Maurice McDonald were the two brothers who opened the first location (Kincheloe, 2002). An interesting fact about McDonald’s is that they were one of the first companies to pioneer the concept of fast food.

They started a “Speedee Service System” at their restaurant location, and the concept eventually developed into fast food (Kincheloe, 2002). The brothers quickly gained recognition from people in the community for their innovative concept of rapidly delivering food to their customers. Although the brothers were successful, the rapid expansion of the company was as a result of another investor.

Ray Kroc was a wealthy businessman who purchased equity in the McDonald’s company (Kincheloe, 2002). Kroc had enough capital to open up many McDonald’s locations throughout the nation. The company continued to gain popularity, and eventually started operating on a global scale. McDonald’s is now the world’s largest fast food restaurant chain.

Strengths

The McDonald’s organization has several different areas of strength that have contributed to its success. One major strength is the company’s scale. McDonald’s operates in over 119 different countries across the globe. Since the company has so many locations, they have the option of purchasing supplies in bulk. Companies that purchase in bulk typically receive prices that are much lower than normal retail (Simchi-Levi et al., 1999). The organization can then offer low prices on food as a result of the fact that they can purchase their supplies and ingredients at a discounted rate.

Another strength of the McDonald’s organization is that they have a well-established history and a recognizable brand. Since the company has been in operation for many years, most people recognize the brand. The company can open up new locations and not have to worry about advertising or getting the brand to be recognized by consumers.

Most people immediately know that it is a McDonald’s location when they see the large yellow M on the sign. The company has franchises that allow other individuals to purchase and operate a location, while still having to pay revenue to the main equity holders for the McDonald’s organization.

Weaknesses

Although the McDonald’s company is successful, it also has several areas of weakness. The most obvious weakness is in the quality of the food served at the locations. McDonald’s has a reputation for offering food that is high in calories and low in nutritional value (Chandon & Wansink, 2007). Most fast food companies are able to deliver meals in a short amount of time as a result of having pre-cooked or pre-packaged food.

The food contains high amounts of preservatives that do not always have a positive impact on a person’s health (Chandon & Wansink, 2007). In the past, the fast food chain received criticism for failing to disclose the nutrition facts for their products. Individuals had to guess or estimate the number of calories and other nutrition facts. The issue has since been corrected, and McDonald’s now displays the nutrition facts on sheets that are under the food.

Negative publicity represents another weakness of McDonald’s. Several films and public awareness campaigns have been created in response to the low nutritional quality of food served at McDonald’s. Some individuals may be less likely to eat at McDonald’s after having seen the film or other media that criticized the company.

Opportunities

Digital technology is making many new things possible in the modern age. McDonald’s could potentially be one of the first major companies to implement things like artificial intelligence systems that are capable of taking orders, preparing food, and then serving it to the customer. Other things like 3D printing may also be used in the future by fast food companies. The company could save time by 3D printing some of their supplies.

Threats

McDonald’s faces threats from other competitors and also from the external business environment. Obesity is currently a major issue in many parts of the world. In particular, it is a major problem in the United States. More and more media attention is being given to the fact that the nation should work hard to fight against obesity.

McDonald’s may experience lower sales as a result of the fact that many people may avoid eating at the fast food chain as a result of its reputation for serving unhealthy foods.

Other companies are starting to offer fast food that has more nutritional value. For example, companies like Chipotle offer healthier food options that are still served in an express manner. McDonald’s must adapt to the current and future market by offering healthier food.

References

• Chandon, P., & Wansink, B. (2007). The biasing health halos of fast-food restaurant health claims: lower calorie estimates and higher side-dish consumption intentions. Journal of Consumer Research, 34(3), 301-314.
• Kincheloe, J. L. (2002). The sign of the burger: McDonald's and the culture of power (Vol. 27). Temple University Press.
• Simchi-Levi, D., Simchi-Levi, E., & Kaminsky, P. (1999). Designing and managing the supply chain: Concepts, strategies, and cases. New York: McGraw-Hill.

Don't let plagiarism ruin your grade

Run a free check or have your essay done for you

Check my essay Hire Writer