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SWOT Analysis MANDATORY OUTLINE Organization History, including a Mission Statement if possible A. Since its incorporation in 1955, McDonald's Corporation has not only become the world's largest quick-service restaurant organization, but has literally changed Americans' eating habits--and increasingly the habits of non-Americans as well. On an average day, more than 46 million people eat at one of the company's more than 31,000 restaurants, which are located in 119 countries on six continents. About 9,000 of the restaurants are company owned and operated; the remainders are run either by franchisees or through joint ventures with local businesspeople. System wide sales (which encompass total revenues from all three types of restaurants) totaled more than $46 billion in 2003. Nine major markets--Australia, Brazil, Canada, China, France, Germany, Japan, the United Kingdom, and the United States--account for 80 percent of the restaurants and 75 percent of overall sales. The vast majority of the company's restaurants are of the flagship McDonald's hamburger joint variety. Two other wholly owned chains, Boston Market (rotisserie chicken) and Chipotle Mexican Grill (Mexican fast casual), along with A Manger (upscale prepared sandwiches), in which McDonald's owns a 33 percent stake, account for about 1,000 of the units. Organizational Strengths and Weaknesses A. (First Organizational Strength) McDonald’s strengths include positive cash flow, highly regarded brand recognition, and skilled management (Bateman & Snell, 2009). A brand is a sign, symbol, design, or a name (or a combination of these) which identifies one organization's products from those of its competitors. McDonald’s phenomenal growth is mainly attributed to the creation of its strong brand identity. McDonald’s products (i.e. chicken nuggets, Big Mac) are recognized all over the world; its trademark, “the Golden Arches”, and its brand name have become amongst the most instantly recognized symbol in the world (The Times 100, n.d.). B. (Second Organizational Strength) another one of McDonald’s strengths is its positive cash flow. McDonald’s has been one of the few companies in the world immune to the bear market and today’s credit crisis. Indeed, McDonald’s global same-store sales were up 7.7% in 2008; while the locations in the United States still had a respectable 4.5% increase. Two main reasons that explain McDonald’s positive cash flow are: consumers are switching from more expensive restaurants to fast foods like McDonald’s and small price increases on McDonald’s popular “Dollar Menu” do not have a negative impact on sales (Markman, 2008). C. (Third Organizational Strength) Skilled management does make a difference at McDonald’s. McDonald’s has highly qualified consultants who offer continuous support from accounting to human resources and any technical issues. Further, cooking processes are broken down into small and repetitive tasks which allow the staff to become highly efficient. McDonald’s training centers provide in training areas such as leadership, business management, team building, and customer service. Therefore, no McDonald's managers would have to ask members of their staff to complete tasks that the managers could not do themselves (The Times 100, n.d.). D. (First Organizational Weakness) the food industry is really saturated. McDonald's has to deal with the prospects of looming market saturation, which could make it difficult to add new outlets. The market is forecast to grow around 2% per year. There is also an increasing price competition driven by too many competitors, which reduces the company's ability to increase revenue. Neither less swift of the company's focus from a value menu to a more diverse one has recently limited the negative effect of the intense price competition that was traditionally taking place among the industry leaders. Lack of product innovation is another weakness of McDonalds. The last break-through for McDonalds's was the Chicken Mc Nugget in 1993, but again the company’s strategy seems to have successfully dealt with the problem through the popularity of its new salads and other new products. E. (Second Organizational Strength) another weakness is the negative image of their food. Their food doesn't have a good public image. For example, the movie "Super Size Me" did not do well for McDonald's public image. McDonalds could minimize this weakness by changing up their menu and showing a more healthy side of McDonalds. F. (Third Organizational Strength) The Seasons could be a weakness. If customers spend less during certain seasons, then MCD doesn't get as much profit Opportunities / Threats One could be Expansion: McDonald's only serves less than 1 percent of the world's population per day. Although the market in the US is saturated, the global opportunities for expansion are endless particularly in the areas of Europe, India and Asia. McDonalds take great pride in the global opportunity in serving the world with its award winning restaurants and it prides itself and business as very strong. The franchise is strong and has high-performing self-motivating job opportunities for the entire working population worldwide. The operations expand with great knowledge of cultural environments to support key objectives in the long term strategic planning. In the factors of a good organization the opportunities is one of the Strengths discussed in corporate meetings and training seminars worldwide. Career development opportunities are very successful as the franchise attempts to encourage the employees to stay and have a career with McDonalds. The incentives are incredible along with benefits to fit and meet the youngest or newly employed workers. Dental, Medical, school reimbursement funds and vacation time are the benefits that work well with new and present employees. McDonald's benefits incentives are developed to motivate, impress, and value the well-trained personnel as the strategic plan with personnel. The corporation values the package with the benefits opportunities and creates a professional feeling among the employees for a career. McDonalds have a People Promise that describes and reflects reliable and balanced pay and benefits as one of our five People Principles. The McDonalds franchise policies and programs are organized to take on the employee desires through three strategic urgencies, respect, commitment enhancement and talent management. The franchise opportunities also cover a wide variety of high corporation jobs that are listed throughout their website, restaurant management, operation supervisors, crew leaders and members, and a large selection of district and corporate executives that travel the world. A McDonald’s story of opportunity a young woman by the name of Laura Cudebec use to hear people say “you work at McDonalds, that’s all you do?” Laura turns out to have an excellent career as a McDonalds’ Restaurant Manager with great income. One threat could be Competition: The McDonald's Corporation is the number one fast food company in the world. Needless to say that when you are nr 1 it is very easy to lose your position if a company does not keep it’s competitive edge. For the first time in history, in 1997 McDonald had lost the lead in US marked to rival Burger King. After considering both internal and external factors, McDonald's can then strategize on how best to address any possible threats, and there are many threats that had to be considered. Nutrition, for example, due to the rise of obesity, diabetes, and cancer derived from poor nutrition, McDonald's has faced a string of accusations about the high fat food they sell. As a response, McDonald's began using a non trans fat grease to cook their fries and have engaged in selling other nutritional foods such apples slices and salads. McDonald's has also been on the defense for their advertising schemes whereas protestors have been making accusations about McDonald's high fat foods targeting children as their primary audience. McDonald's has used television commercials to advertise enticing toys to be included in Happy Meals, which now include more nutritious foods and drinks such as Chicken McNuggets in place of hamburgers or cheeseburgers, apple slices instead of fries, and juice and milk instead of soda.
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