Essay: McDonald’s SWOT

As one of the largest well-established organization in the world, McDonald’s shows certain degree of strength and weakness, as well as obtains many opportunities for business development and faces different external challenges.
Strength
One of the greatest strength of McDonald’s is its strong brand name with global presence. Besides providing probably the same range of foods all over the world, it also provides foods based on the culture of each country. Other competitors in this industry can seldom perform as well as McDonald’s in this aspect. That is why McDonald’s become the largest fast food restaurant in the world persistently.
Due to its global presence, their revenue is also diversified across the globe. The company doesn’t rely heavily only on some well-developed regions or countries. Sometimes when there is economic downturn in some regions, the revenue in other regions could still contribute to the company so that the business can still operate normally and stably without any problem of lacking cash flows. This is very important for a global company as well-diversified business across different regions means minimized market risks, and stable profitability could be generated.
In terms of information technology, McDonald’s strength is the usage of the same systems over all countries. Internal working processes can be standardized thus product consistency can be ensured. Using the same systems can also ensure lower operational cost because the resources for working on the same systems such as consultancy cost, maintenance cost or even training resources can be shared between each country within McDonald’s. Overall speaking, product quality could be assured and increased more easily at a reduced cost.
By utilizing the same systems, communication will also be made easier, cheaper and more efficient within McDonald’s. Since staffs are required to follow the same standards, the obstacles in communication due to cultural differences between each country would be reduced. These contribute to the operational efficiency of a global company.
Weakness
One of the largest weaknesses of McDonald’s is its ingrained negative image. This image can be classified into two main types – unhealthiness of food and infamously low wages.
There is long history of perception on McDonald’s food being unhealthy in the general public. McDonald’s is always criticized for encouraging unhealthy dieting style in our life, especially for children and adolescent. It is always thought that the standard menus in McDonald’s are designed to fill up our stomach as soon as possible only, without any healthy content. That is why there is high percentage of obesity over US which has high percentage of fast-food consumers.
Besides the food, McDonald’s is also infamous for its low skilled, low promising career prospect, unusually low paid job opportunities. High quality employees can seldom be attracted to work and contribute in McDonald’s, despite it is one of the largest restaurant chain in the world.  Thus, employee turnover rate could be exceptionally high which also lead to high training costs.
One of the weaknesses of McDonald’s applications of technology is the development of their new touch-screen self-service kiosks. In order to boost higher sales, McDonald’s introduced the “Create Your Taste” programme using “Build your burger” platform in recent years which allow customers to tailor-made their own burgers based on their own taste. Customers can choose from lists of different ingredients for each component of the burger.
To make a perfect burger, customers spend much more time to scan through all ingredients available on the list and consider about different combination of burgers, consequently making other customers on the queue spending more time to wait for ordering. Also, since the burgers are tailor-made, it takes longer time to prepare than the standard burgers. On the other hand, the touch-screen self-service kiosks are only available inside the restaurant. However, in many countries, about 70% of McDonald’s customers are drive-thru customers. They would be more reluctant to go inside the restaurant and wait for long time for only a burger. So the target customer of this service is mainly for their dine-in customers which composed of only 30% of their customers. The programme is like a gimmick more than an effective programme boosting sales revenue of the restaurant. Customization through technology in this aspect sounds like enhancing the image and performance of the restaurant, but it actually cover only a small portion of customers and adds more waiting time to them.
Opportunities
In order to maintain competitiveness in different markets across the globe, McDonald’s is planning to provide more choices at some locations. On top of providing fast-food, it is also expanding their business to compete with other food and beverage industries such as coffeehouse chain by launching the brand McCafe.
Besides expanding its market share by stepping into other food and beverage industries, McDonald’s also has many opportunities to expand their business in less developed regions like Middle East countries, South America and Africa. More diversification in markets means less market risks, and more stable business.
There could also be many good opportunities for McDonald’s to develop in terms of information technology. A popular example is the launch of mobile apps. In recent years, McDonald’s actively developed mobile apps to attract more customers especially the tech-savvy generation. Through the apps, customers could order, pay, download coupons and get the latest news of McDonald’s.
Last year, McDonald’s started the linkage to Apple Pay to simplify payment process in the US. It will accept Apple Pay payments, which make ordering quick and easy for customers using iPhones and Apple Watch.
McDonald’s is also implementing 3D printing technologies in the restaurant. The idea is to use 3D printing technologies to reprint the toys from Happy Meals for children so that those who don’t collect every single toy in the set could also enjoy and have more exciting dining experience.
Threats
As the largest fast food restaurant in the world, the largest threat of McDonald’s is to face very keen competition. Every business faces competition. However, McDonald’s faces extremely severe competition at different levels. Competitors come from national, international, regional and local in terms of scale, and from quick service restaurants to food products retailers in terms of business nature. The competitions can be from many different aspects – not only on prices, tastes, quality, but also services, convenience and product variety.
Nowadays, the emerging healthy lifestyles could also be a threat to McDonald’s. Consumers tend to choose more healthy alternatives. There are many options of restaurant providing healthier meals and nourishment available on the market – organic products, fresh fruit and vegetables, and diet with minimal oil, salt, sugar are all threats to McDonald’s business.
Besides competitions and substitutes, the major threat to McDonald’s is the issue of information security. In past few years, McDonald’s has been reported loss of customer data accessed by hackers. The data was managed by an email database management firm which has long history of partnership with McDonald’s. Customers involved including those who signed up or promotions or registered in McDonald’s website. The information in the database includes customer personal information such as full name, address, date of birth and phone number. Fortunately, the data does not contain highly sensitive information such as social security number, credit card number and other financial information.