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Strengths
1. Highly successful and recognized advertising. (I’m loving it)
2. Strong employee training and promotion mostly from within
3. Strong Investor Reputation.
4. Strongest Brand Image as the number-1 fast-food company by sales, with more than
32,000 restaurants in 118 countries.
5. Recognized as a community oriented, socially responsible company.
6. Strong Global Presence and an ability to weather local economic fluctuations.
7. Use pure ingredients and take food safety very seriously.
8. Consistently solid financial performance.
1. Gross margins (36.7%) and net profit margins (18.2%) above industry averages.
2. Sales revenue up 3.3% in 2008, global comparable sales up 6.9%.
3. Net income up 80% in 2008.
9. Strong innovation and product development.
10. Large real estate portfolio.
11. Economies of Scale – Nearest competitor in U.S. is half McDonald’s size.
12. Offer premium taste at bargain prices which is convenient for a cash-strapped society
13. Lots of ads and billboards everywhere that promotes their company
14. McDonald is known Internationally.MCD as over 31,000 restaurants in 118 countries
serving more than 58 million customers each day.
15. Offer rapid service which is convenient for a time-challenge society
16. Delivering exceptional costumer experience by using their Plan to Win Strategy, which
includes an extra P, for people.
17. With a market cap of 59.8$ billion MCD is by far the leading market brand in the fastfood service industry followed by Yum! Brands, which has a market cap of only $16.3
billion.
18. McDonalds had a 3.8% sales growth in 2009.
19. From 200-2009 MCD had a 15.5% annual total return while S & P 500 and DJIA both
decreased.
20. Total assets outweigh total debts by up to 3 times more.
21. The convenience of McDonald`s is definitely one of its strengths.
22. Their prices for their various products are all very affordable.
23. The appeal to basically every class of individual.
24. They are located all over the world- McDonald`s Asia, would be different from
McDonald`s in the US pertaining to the food they serve.
25. Fast food is a growing want in many American’s lives and with their big food chain; they
remain strong and are available to provide the basics of "fast food" wants.
26. Their marketing campaign continues to focus on brand recognition by promoting their
name. It is a successful cooperation through marketing.
27. Greatly successful and known advertising.
28. Solid innovation and product growth.
29. McDonald offers premium taste at bargain prices.
30. McDonald has a lot of advertising on buses and billboard, they are large advertising, and
they are everywhere that people can see it.
31. McDonald is, internationally, the largest global food service retailer, with over 31,000
restaurant in 118 countries, and they are serving more than 58 million customers per day.
32. McDonald offers a fast customer services.
33. By having a great customer experience in their WIN,strategy plan, which is people,
McDonald improve their strategy to be able to target a larger variety of customers.
34. McDonald focuse on customers, so they provide high quality food and superior service,
in a clean, welcoming environment.
35. McDonald hold them, and conduct their buiness to hogh standards of fairness, honesty,
and integrity.
36. McDonald is by far the leading market brand in the fast food industry with a market cap
of $59.8 billion in May 2009, compare to Yum who has $16.3 billion.
37. They earn revenue from three different markets, real estate, fast food sales and
franchising of their brand.
38. They are one of the most recognized brand logos with the golden arches worldwide.
39. They are located in places with ease of access in and out, high volume of traffic and even
more visible than most.
40. McDonalds has a lot of advertising, with the “golden arches” being one of the most
recognized brands in the world.
41. McDonalds is, literally, the largest global fast food service retailer.
42. McDonalds offers nice tasting food at bargain prices, with a short waiting period.
43. McDonalds offers fast customer service.
44. McDonalds is by far the leading market brand in the fast food industry
45. They acclimatize each of their stores around the world to fit in with that culture.
46. Recognized brand – the McDonald’s brand is known worldwide for its products and
success.
47. Available cash/stock performance – excellent revenue and profit even in a recession
48. New items – innovation, adaptability, and market sense to create and develop new food
items
49. McDonalds is well established with over 30,000 restaurants serving over 120 countries.
They are successful in all of these markets.
50. They earn revenue not only from food sales and stocks but also from their rented
franchise to every McDonald’s location.
51. They adapt culturally to every location and country. For example in India their menu
does not include beef burgers it consists veggie, chicken, and fish burgers for their
customers.
Weaknesses
1. Lowest Customer satisfaction rating in the industry (69), even below IRS.
2. High employee turnover.
3. Assembly line approach makes it difficult and costly to adapt to changing trends.
4. Core product line out of sync with trends toward healthier lifestyles for adults and
children.
5. Sales demonstrates seasonal effects.
6. 80% of restaurants are franchise owned, placing image and reputation in other’s hands.
7. Over-saturation of real estate in the US.
8. Struggles with fluctuations in operating and net profits: Operating profits $4,433M
(2006), $3,879M (2007), $6443M (2008).
9. Net profits $3,544M (2006), $2,395M (2007), $4,313M (2008).
10. 70% of operating revenues and 45% of debt are in foreign currency.
11. McDonalds has yet to add items to their menu that are organic and does not market their
healthiest items to customers as well as they should. (The U.S. is in a health conscious
state of mind)
12. A McDonald’s position employment wise is not exactly what an individual strives for.
This ends up giving McDonalds has a high employee turnover. One of the top expenses
for McDonalds is in employee training.
13. The food that they offer customers is in no way healthy. This could potentially end up in
customers with health issues.
14. Product issues, such as substandard beef (e coli) – some food sources may be
contaminated
15. Difficult to find new franchise locations – success may be bitter sweet for new
restaurants
16. Inexpensive, fast food products could lead to change in culture, contribute to obesity
17. McDonalds is not a good product to follow in terms of health.
18. McDonalds lack of healthy food substitutes.
19. Even though McDonalds has a lot of customers, it also has a considerable amount bad
representation.
20. Their lack of advertising of ingredients in their foods.
21. Lack of new products.
22. High employee turnover.
23. Lack of the ability to capitalize on organic healthier foods and ingredients use to make
their products.
24. McDonald gives a bad representation regarding diet and health to communities.
25. McDonald’s lack of healthy food in its restaurant, and the customers do not know the
way the food is made.
26. McDonald’s lack of nutritional information.
27. Even though McDonal has a lot of customers, it also has a numerous amount of product
recalls.
28. High employee turnover.
29. Lowest Customer satisfaction
30. McDonalds recently been harassed by some Americans about their unhealthy products,
their icon can be seen at times when people accuse fast food as being "addictive" and a
reason why Americans are becoming obese.
31. Their biggest weakness is the negative image of their food. Their food doesn’t have a
good public image.
32. Bad reputation food reputation
33. Bad example for the community regarding diet and health.
34. No nutritional information on MCD products provided for costumers
35. MCD suffers from a lot of product recalls
Opportunities:
1. Anticipated 4% growth rate in Quick Service Restaurant industry.
2. Low fat, low calorie, healthy hamburger – Could be first on market.
3. Many restaurants (60% in U.S.) have outdated appearance. Remodeling can yield cozier,
upscale setting, and upgrade the image.
4. Respond to social changes by innovation within healthier lifestyle foods.
5. Increased beverage options (Gourmet coffees) have been shown to increase customer
visits in Europe (+7.2%) and takes advantage of faltering Starbuck’s.
6. Breakfast not available at 25% of locations – can increase return on assets and equity.
7. Joint ventures with retailers (Walmart, etc.) can place new locations in high traffic areas
at lower capital cost.
8. Continued focus on corporate social responsibility, reducing the impact on the
environment and community linkages.
9. International expansion into emerging markets of China, India, Brazil.
10. Diversify portfolio (i.e., similar to what it did before divesting Chipotle, Boston Market).
11. MCD delivers consistently good performance, making it advantageous for investors.
12. Ronald McDonald House or Charity
13. MCD has made significant changes to become a socially and environmentally friendly
company.
14. Great variety across the menu
15. Rising sales in the US Restaurant Industry
16. Enormous potential in Emerging Markets
17. They have the opportunity to grow, and expand because their large food chain and they
can afford small losses compared to smaller local businesses.
18. It gives job opportunities in local communities and funds Ronald McDonald house for
families of sick children. They also have the ability to add healthier food.
19. Diversify range
20. Respond to social change.
21. They can offer more healthy food options, also more allergen free.
22. Provide more of an upscale environment in bigger cities by refurbishing it present
restaurants and also getting more of a wireless zone.
23. They can try to improve the time lines in which service is provided, thus creating more
business.
24. They have restaurant franchises virtually all over the world, why not use that as an
opportunity to promote healthy living.
25. They have so many people who go there because of its convenience, that even if they
start changing their foods slowly to a more healthy style, more than likely people will still
buy what they sell.
26. They use certain percentages of their staggering profits to support various charities, even
support and run their own charity.
27. As the leading fast food restaurant, they have an opportunity to lead by example, in all
their business practices, from healthier foods, to being environmentally friendly, to
showing an interest in their employees from the top to the bottom.
28. McDonalds has a much higher market cap than its competitors, sometimes 3 times higher
or more.
29. Starting new businesses in other countries/ expanding operations.
30. The dividend that is being earned is a decent amount which keeps people wanting to
invest or possibly even invest more.
31. The recent remodeling of thousands of McDonald’s restaurants has given the fast food
restaurant a new environment of more of a high class coffee shop (Appealing to a bigger
demographic).
32. Since the prices are so low in hard times such as the 2009 recession, revenues actually
increased when other businesses were taking a hit. They also have the versatility that
when the “hard times” are over customers will still be buying McDonalds.
33. Developing “play places” for children, as well as having Wi-Fi Internet allows it to be a
family setting as well as a workplace for college students or business individuals.
Threats:
1. More health conscious customers.
2. Particularly vulnerable in older, established markets (US, EU) to upstarts offering
healthier food offerings and more modern, high tech surroundings.
3. Global economic recession causing consumers to spend less (Global GDP Est.-2.3%).
4. Markets in US and EU are mature and saturated, but 70% of locations.
5. Subway and YUM! Brands expanding into developing markets at a higher rate.
6.
Litigation:
7. Brand equity at risk: 80% of restaurants owned by franchisees.
8. Contamination of the food supply, especially e-coli, or Mad cow disease, could damage
sales, reputation, etc.
9. Intense price pressure from competitors like Burger King, Taco Bell, Wendy’s, KFC and
any mid-range sit-down restaurants.
10. Negative public opinion campaigns
11. Looks like MCD does not want to give itself to much responsibilities or promises because
they have no mission statement or vision statement offered publicly available or are just
very hard to find.
12. BKC trails behind McDonald’s in several categories in the fast- food industry, including
operating margins, earnings per share (EPS), and P/ E ratio. Yum!, which is consider
second largest in the global fast-food service industry owns prominent restaurant chains,
such as Kentucky Fried Chicken ( KFC), Pizza Hut, Taco Bell, Long John Silver’s, and
A& W. Briefly, all well-known fast-food company such as Wendy’s, Starbuck, KFC,
BKC, etc. are MCD competitors.
13. MCD as a bad reputation in the media and community industry because of the unhealthy
and bad reputation food quality. Ex.: Super Size Me, Destruction of Amazon Rain Forest
and Indigenous
14. Unfavorable changes on the sociopolitical, legal, and environmental fronts at home and
over-seas as well as currency rates may adversely affect MCD without prior notice.
15. Unpredictable consumer choices
16. Darden Restaurants, Inc. has a lower P/E ratio than McDonalds, therefore their stocks are
a better bargain.
17. There are competitors whose market value of stock are less and when paired with P/E
ratios, are a good investment.
18. As the economy gets better, people are beginning to switch from McDonalds back to
what they purchased before the economy started the downturn in 2007.
19. As they are a fast food restaurant, who make massive profits off selling unhealthy foods,
it encourages other restaurants to do the same… now there are places like Wendy`s,
Burger King, Arby`s etc etc… and the list just goes on, who are all unhealthy and all are
just as convenient as the next.
20. A growth of similar fast foods joints, that other people may be interested in trying instead
of McDonalds.
21. Healthy living is being promoted on a huge scale, if they don’t start showing their
support, they might lose many of their customers who are turning to healthier lifestyles.
22. McDonalds would be an "Anti 'fast food"' move by the American society as a whole.
Having almost all Americans realize that eating healthy was the healthy way to live, may
threaten their business.
23. McDonalds would have to adapt in order to survive, however they may not be able to
change everything because of the already existing "healthy" food chain Subway.
24. McDonald’s needs to start with healthier food and then make sure they convey it in an
advertising campaign.
25. It threatens small local businesses based on how fast the food is delivered and its
convenience.
26. Global economic recession causing consumers to spend less
27. More healthy mindful customers.
28. People are now eating out less these days.
29. Bad food press from contaminated meat, chicken or any other food supply.
30. Parental groups have gave them the name “cradle to grave” as the market to kids with
promotional toys, play grounds and such, then as they grow into adults they end up with
health problems. As seen in the film “Super-Size Me”.
31. It seems like McDonald does not want to give to many informations about their mission
statement and vision statement, in case, they cannot keep their promises because it looks
like it does not have a mission statement nor vision statement or these documents are not
publicly available.
32. Burger King Company trails behind McDonald, as the third largest in many categories
related to the fast food industry, such as operating margins, earnings per share, and Price
Earning ratio. Also, Yum is the second largest in the industry of fast food, which is a
threat to McDonald because they own all Pizza Hut, Taco Bell, KFC, Long John Silver’s,
and A&W.
33. The presence of fast food close to school increase the percentage of obesity rate in young
people, which can banned fast food restaurant that are close to school.
34. McDonald does not have a very good representation in the media industry. (Super Size
Me, Amazon rain forest in Brazil destruction, Indigenous people’s land destruction)
35. The unfavorable change in the sociopolitical, legal, and environmental fronts at home and
over-seas as well as currency rates can affect McDonald without notice.
36. Unstable consumer choices between healthy food and fast food.