In the contemporary recent era, McDonalds has acknowledged the biggest food chain of hamburgers and related fast food items. McDonalds assert that above fifty-eight million individuals fond of junk foods show their presence in the outlet and consume burgers and fries. The historical background of the company initiated in 1940 when two brothers namely, Richard and Maurice McDonald, inaugurated a restaurant in San Bernardino, California. During the year 1948, the “Speedee Service System” was introduced, which was considered as the principles of modern food chain globally. However, the company remained small-scale for another half decade (McDonalds, 2016).
In April 1955, Mr. Ray Kroc purchased a first franchise of McDonalds in Des Plaines Illinois. Mr. Kroc went on to purchase equity in the company for the worldwide expansion. The presence of Kroc in corporate affairs of McDonalds transformed small-scale food chain into the global phenomenon of taste and excellence (McDonalds, 2016).
In the classic era of corporation and industrialization, Ray Kroc proposed a distinct philosophy to regulate operations of McDonalds that resulted in a global breakthrough. Ray Kroc wanted to develop a systematic framework that ensures consistency in quality and taste. Moreover, Kroc wanted to follow uniform production process for preparing burgers, buns, fries, and beverages. The franchise owner wanted to maintain the taste of foods in Alaska similar to Alabama. Based on the promotion of slogan, for instance “in business for you, but not by you”, he insisted every franchisee and supplier for complying with his vision. The vision enforced stakeholders to together with McDonalds rather working for McDonalds. According to Kroc’s vision, McDonalds was depending on three important pillars of operations – franchisees, suppliers, and employees (McDonalds, 2016).
SWOT Analysis
Strengths
In terms of brand equity, McDonalds is the biggest restaurant in the fast food industry worldwide. The company has more than 36.5 thousand restaurants in more than hundred countries. According to Forbes (2016), recorded sales for McDonalds in 2016 were $25.4 billion with the market value of $110.1 billion. Out of 2000 large-scale public organizations, McDonalds rank at 189th position in Forbes list. The brand image of McDonalds asserts that kids distinguish its symbolic identity (logo) before self-recognition. The company is known for transforming eating patterns of people worldwide (Nickel, 2016).
The product portfolio and operational portfolio of McDonalds is another competitive advantage while defending the position of market leadership on the global platform. The portfolios generate diversified and lucrative sources of income that ensures sustainability in the financial stream. Unlike competitors, McDonalds does not exhibit complete dependability on a single source of income. The sources vary from regions to distinct products that are sold in massive volume to millions everyday (Jurevicius, 2016).
Another significant strength of McDonalds is marketing strategies and activities. The facial appearance of Ronald McDonald is a signature for the brand name. This mass scale recognition around the globe can be achieved through effective marketing strategies for spans. In the long run, the company would be in a sustainable position in context to brand recognition and brand differentiation (Nickel, 2016).
Moreover, the share of the market of McDonalds is found to be greater among giant competitors namely Burger King, Yum Brands, Kentucky Fried Chicken (KFC), etc. The company acquires more than 20% market share on a global scale, which incorporates more than 1.5 billion people in the target audience (Nickel, 2016).
Currently, the major strength of McDonalds is brand turnaround strategy that institutes enhancements in multiple dimensions of the company and expands the industrial competitive advantages. The entity is determined in creating an appeal in products and brand to acquire loyalty of value conscious audience. As evidence, the company reintroduced McFirst platform in France for offering higher value towards products. Moreover, there are various innovations introduced in the menu by offering premium food items that enhance corporate positioning in the United Kingdom (UK; Trefis Team, 2016).
Weaknesses
The company is incapable of offering healthy food items and considered as a major source for obesity. Moreover, the food items prepared in McDonalds have high calories that fail to create appeal in health conscious audience. McDonalds use Trans – fat and beef oil while preparing burgers and other fired items. The consumption of Trans – fat is legal in various countries but results in lethal types of cancer among consumers. The overall brand image of the company is serving unhealthy food items to customers in terms of ingredients.
Opportunities
With increasing global population, demand for fast food and fried items tend to increase simultaneously. The time constraint during jobs and rapid consumption of food drive people to avail services from McDonalds. Further, the company has an opportunity of preventing environmental damages through green packaging and solutions. This specific advantage is uncovered by McDonalds in marketing aspirations and advertisements.
Threats
The major threat for McDonalds is cutthroat competition in the global fast food industry. Currently, the company is excelling competitors such as Burger King, KFC, Wendy’s, and Johnny Rockets. However, the industrial opportunities are equally exploitable for the competitors that have the potential to snatch market leadership. Further, diseases such as obesity and heart conditions are increasing over the period globally. Regulatory may influence McDonalds to change production framework and ingredients that will disturb classic taste of their products significantly.
Four Ps (Meyer, 2015)
Product Aspects with Positive Influence – Personal Experience
In personal opinion, McDonalds have the ability to serve hamburgers with consistency in taste and quality along with presentable appearance. The hamburgers and sandwiches would not by dry and dead in appearance, neither over filled with meat and sauces. The company knows the balancing point while preparing burgers that are able to appeal target audience. Lastly, the wraps and packaging of the burgers and sandwiches would prevent sauce spilling, which is another value addition towards products.
Product Aspects with Negative Influence – Personal Experience
The image of preparing and serving burgers and fried items in Trans – fat and beef oil is a major concern. There are researches and blogs claiming that specified ingredients have the potential to cause deadly cancers and obesity. Personally, health conscious is not extreme but fear of fatalities and weight disorders minimize the appeal in hamburgers and fried items offered by McDonalds. Lastly, McDonalds does not provide an element of personalization in burgers and sandwiches. Unlike Subway, customers cannot prepare edibles based on self-preferences and tastes. McDonalds restrict its target audience from conducting personal experiments.
Physical Evidence
The physical evidence of McDonalds is two-dimensional when it comes to purchasing decision. The company targets the mass market, which makes the restaurant crowded and noisy. People are filled with friends and families for a quality time. The ambiance is filled with discussions, laughter, and socialization. However, the quick service and politeness of employees force to visit McDonalds repeatedly. Further, the restaurant is accessible throughout residents, offices, and malls. It is easier and cheaper to get prompt food from McDonalds as compared to other entities.
Recommendations
In personal opinion, McDonalds need to change the image of unhealthy food providers immediately. The company can introduce a new line of organic foods in order to tackle this concern and entertain people with health problems such as obesity. Furthermore, the company needs to diversify operations even further. Since McDonalds has become a trademark with its logo and Ronald Trademark. A diversification in apparels will prove lucrative and effective in tackling industrial challenges on the global scale.
In context to diversification, McDonalds must introduce fine dining in order to capture new segments of the consumer market. Fine dining will shift brand positioning and brand image to newer levels. Customers would be adapting the contemporary concept of McDonalds promptly due to established relationship with the brand.
Physical evidence of McDonalds has issues with comfort and relaxation. McDonalds need to setup flagship stores that have minimal capacity for people. This will maintain the balance between traditional and contemporary ambiance of the company. Moreover, it will be easier to increase market share of the company that was decreased due to regulatory involvement and health issues among consumers.
References
Forbes,. (2016). #189 McDonald's. Forbes. Retrieved 29 July 2016, from http://www.forbes.com/companies/mcdonalds/
Jurevicius, O. (2016). McDonald's SWOT analysis 2016. Strategic Management Insight. Retrieved 29 July 2016, from https://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html
McDonalds,. (2016). Our History and Timeline | McDonald's. Mcdonalds.com. Retrieved 29 July 2016, from https://www.mcdonalds.com/us/en-us/about-us/our-history.html
Meyer, P. (2015). McDonald’s Marketing Mix (4Ps) Analysis - Panmore Institute. Panmore Institute. Retrieved 29 July 2016, from http://panmore.com/mcdonalds-marketing-mix-4ps-analysis
Nickel, T. (2016). McDonald's SWOT Analysis and Recommendations. Tough Nickel. Retrieved 29 July 2016, from Jurevicius, O. (2016). McDonald's SWOT analysis 2016. Strategic Management Insight. Retrieved 29 July 2016, from https://www.strategicmanagementinsight.com/swot-analyses/mcdonalds-swot-analysis.html
Trefis Team,. (2016). How McDonald's Is Effectively Executing Its Turnaround Strategy?. Forbes. Retrieved 29 July 2016, from http://www.forbes.com/sites/greatspeculations/2016/05/03/how-mcdonalds-is-effectively-executing-its-turnaround-strategy/#424cd0072d91
