McDonald’s Corporation SWOT & PESTLE Analysis

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 40,031 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 200,000 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 93% (as of 2022) 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.

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Weakness

Opportunity

Threats

Political

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Economic

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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.

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Technological

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Legal

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Environmental

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