COMPANY PROFILE -McDonald’s Corporation
Business Sector :Fast Food, Restaurant Chain
Operating Geography :United States, North America, Global
About McDonald’s Corporation :
McDonald’s Corporation is one of the world's first and largest franchise based fast food chains. The company relies on its franchisee model and 93% of its stores run through this model. The company, focuses on innovative and extensive marketing, its core offerings of bugers, chicken and coffee, and 3D’s, which are boosting digital sales, delivery and drive-thrus. In fact, the company enjoys the advantage of being one of the early movers to try the 3D’s in different time frames. The company is known for its socio-economic researches before entering the newer markets and thus, designs the
products and engineers nomenclature which can connect with the culture and local values of the regions wherever the company operates. The American fast food chain focuses on trying the latest offerings in the company owned restaurants to research on their chances of success and scope of improvements before introducing them to the larger market through franchised restaurants. In the conventional franchise model, the company either provides the real estate property to the franchise and rest, the franchise decorates and manages the day to day operations through their employees. In another model of franchise, known as developmental license or affiliate, the real estate properties also provided by the franchises apart from interior decorations and cost of operations. Developmental license or affiliates are slightly different from each other by the fact that in affiliates the company purchases some equity in the franchise. In all the franchise models, the company earns through a license fee of permitting the usage of the brand, systems and products of McDonald’s and royalty based on sales.
McDonald's USP or unique selling proposition lies in being the world's largest restaurant chain by revenue, present in 119 countries with 39,198 restaurants across the globe as of 2020. McDonald’s Corporation’s mission statement reads “To make delicious feel-good moments easy for everyone.”
McDonald’s Corporation Revenue :
$19,208 million - FY ending 31st December 2020 (y-o-y decline 10.10%)
$21,365 million - FY ending 31st December 2019
Competitive Analysis of McDonald’s Corporation
The SWOT analysis for McDonald’s Corporation is presented below in a matrix followed by the detailed analysis report
| Strengths | Weaknesses |
1. Global presence with local relevant offerings
2. Scalable franchise-based model adding to the long term profitability and business innovation
3. Consistently improving and maintaining a high quality of food through efficient supply chain mechanisms
4. Well known for innovative marketing and promotion of the brand
5. Resilient business structure helped the company retain profits even amid pandemic
6. Successfully extending McDelivery through collaborations with food delivery partners
| 1. Long run Walmart - McDonald’s collaboration rapidly hanging boots in the post covid era
2. Reeling with food safety issues and loss of foothold in the ever growing Indian market
3. Big ticket employees purposely violating company policies may hurt employee sentiments across orders
4. Data breach poses serious question on the McDonald’s cyber security amid the major shift in consumer behaviour hierarchy
5. Instances of discrimination based on color and outlooks tarnishing acceptance of the brand among diverse communities
6. McDonald’s abandoned in multiple nations due to socio-economic concerns limits expansion of the brand
|
| Opportunities | Threats |
1. Rising demand of drive thrus and take outs amid pandemic
2. Opportunity to grow in the rapidly growing Asia Pacific region
3. Drive thrus to become the future of fast food giants
| 1. Multidimensional competition from large to micro sized competitors
2. Risk of theft of food items recipes and duplicate menus by competitors at various levels
3. Lack of nutritional values in fast foods discourages consumption by health
|
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Detailed SWOT Analysis of McDonald’s Corporation
Strength
1. Global presence with local relevant offerings: McDonald’s Corporation is one of the largest global brands of quick-service restaurants, take-out, and drive-thru corners. The company has a strong presence in 119 countries with 39,198 counters. 65% of the Annual revenue of McDonald's is generated outside of the USA. The company has gained expertise in standardizing the food as per the taste of different customer cohorts across the world. The company gives priority to the cultural, demographic, and financial cohorts of its customers. The offerings are based on well-surveyed research of the choices of customers with the highest possible priority to food preservation methods and hygiene. The company has never hesitated to cancel franchise memberships based on reports of unhygienic and unsafe practices. Popularly, McDonald’s is renowned for its hamburgers but to enter the Indian market they totally removed hamburgers from the menu and replaced them with chicken, egg, and veg alternatives due to religious factors, whereas, the company serves shrimp and pork stuffed burgers in the greater South East Asian markets, such as south Korea, China, Hong Kong, Malaysia and many others. Keeping a close eye on global diversity, the company directly employs over 200000 staff out of which 75% are outside of the US.
2. Scalable franchise-based model adding to the long-term profitability and business innovation: McDonald’s is a sought-after hunger break spot across the globe, which comprises both company-owned properties and franchise-based facilities. Out of them 92%+ of the outlets run through a strong and standardized franchise-based model. The company considers its franchise as the most important reason behind its success and they acknowledge that they are a global brand due to their franchises. The company has various kinds of franchise-based models to cater to the local jurisdictions and business atmosphere of various regions. The company substantially depends on the rent, brand loyalty, and sales commission of its franchises for growth, and in return, the company provides support in operations and financial resources and focuses on product innovations, training of staff, promotions, and marketing. McDonald’s has conventional franchises and developmental licensees or affiliates. In conventional franchises, the company owns the real estate through lease, grant, or permanent buyout, and the franchise co-invests in the property to operate it as high standards McDonald's outlet or restaurant. The franchisee pays the rent of the real estate and sales commission. In developmental license, the franchisee invests all the capital resources including the property, and McDonald’s receives license maintenance fee and a sales commission from such franchise. Affiliates are the same as the previous, except that the company invests in the equity of such franchises. McDonald’s has indirectly generated employment for over 2 million staff through its franchises. Through franchise-based models, the company maintains a lean structure within the organization, invest more resources in expansion in newer venues, maintain margins as high as 30% or more, and external forces of obstructions could be avoided while maintaining the outlets through franchise.
The remaining section of “Strength” is available only in the 'Complete Report' on purchase.
Weakness
This section is available only in the 'Complete Report' on purchase.
Opportunity
This section is available only in the 'Complete Report' on purchase.
Threats
This section is available only in the 'Complete Report' on purchase.
The PESTLE analysis for McDonald’s Corporation is presented below in a table followed by the detailed analysis report
| Political | Economical |
1. Supply chain uncertainties due to Brexit
2. Impact of sanctions and embargoes in operations
| 1. Impact of currency fluctuation in the operations
2. Impact of slowdown in economy due Covid-19
3. Evolving public health policies
|
| Social | Technological |
1. Consumers seeking vegan options in the new normal
2. Impact of cultural differences on the McD menu
3. Youngsters preferring ghost kitchens to battle taste hunger
4. Consumers seeking fast food with healthy and hygienic options
5. Popularity of fast drive-thru services
| 1. Virtual kitchens easing contactless and queueless services
2. Robotic and AI enabled kitchens to beat delays in order fulfillment
|
| Legal | Environmental |
1. Stringent regulations related to food preservation and hygiene
2. Compliances related to data privacy of customers and their impact
| 1. Sourcing food ingredients though sustainable agriculture
2. Sustainable packaging helps McDonald’s to meet sustainability goals
|
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Detailed Pestle Analysis of McDonald’s Corporation
Political
This section is available only in the 'Complete Report' on purchase.
Economic
This section is available only in the 'Complete Report' on purchase.
Social
1. Consumers seeking vegan options in the new normal: Vegan food market is one of the fastest segments of food markets with increasing demands. Covid-19 and concerns of environment protections are encouraging customers to adopt a vegan lifestyle. The vegan food market is about to grow at the CAGR of 9% between 2020 and 2025 when it is expected to scale to a whopping $22.27 billion, as per reports from The Business Research Company. Vegan food variants include plant-based diet and it has given scope to the R&D of meat developed through Cell based technology, where meat is produced by feed meat cells with vital nutrients for growth. This can help to curb the deficiency of vital minerals and proteins in the vegan diet. As per meticulous Research, the plant based diet Market would grow with a CAGR of 11.4% between 2020 and 2027 and would become worth $74B~ by then. This gives a huge opportunity in market penetration in existing markets for McDonald's by alluring vegan customers by serving their palettes with delicious gourmet. McDonald's serves McAloo, the potato burger, in India and has McPlant variants in Europe. It planned to launch McPlant in the USA as well. The brand can rebrand itself in the sustainable food offerings by launching its own range of vegan foods.
The remaining section of “Social” is available only in the 'Complete Report' on purchase.
Technological
This section is available only in the 'Complete Report' on purchase.
Legal
This section is available only in the 'Complete Report' on purchase.
Environmental
This section is available only in the 'Complete Report' on purchase.
Major Brands :
- McDonald’s
- McCafe’s
- Ronald McDonald
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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
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References used in McDonald’s Corporation SWOT & PESTLE Analysis Report
1. Annnual report of McDonald’s: 2020
https://d18rn0p25nwr6d.cloudfront.net/CIK-0000063908/66cf4c9f-1e8c-4436-8a2f-95f189fde65f.pdf
2. Growth rate of restaurant industry
https://www.thebusinessresearchcompany.com/report/restaurants-and-mobile-food-services-global-market-report-2020-30-covid-19-impact-and-recovery
3. Growth of Ghost Kitchens
https://techhq.com/2020/11/the-rise-of-ghost-kitchens/
4. Market leader in fast food chain industry
https://www.t4.ai/industry/fast-food-market-share
5. Food Policy Approaches to Obesity Prevention: An International Perspective: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4333683/
The detailed complete set of references are available on request in the 'Complete report' on purchase.
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McDonald’s Corporation SWOT and PESTLE analysis has been conducted by Tej Narayan Shaw from IISWBM, Kolkata and reviewed by senior analysts from Barakaat Consulting.
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