Tuesday, April 2, 2019
PESTLE and SWOT Analysis of McDonalds
grind and SWOT Analysis of McDonaldsExecutive SummaryIn this enunciate entitles close to the external synopsis of riotous nourishment eating place and internecine psychoanalysis of McDonalds cooperation by SWOT analysis and constructing of TWOS matrix that give us the coming(prenominal) day strategies of MC Donalds. The vital results of external analysis argon the there is considerable competition with the competitors because it is perfect competition between the firms. The customers ar much point about the organic food, and excessively about wellness issues much(prenominal) as obesity. Such as increasing the organic food is to a fault probability and at the same time it give add the cost, so they should more than concentrate pricing of the product. From the internal analysis the firm is sanitaryer in pecuniary stead and tack on chain and also strong grade discover. By combining these elements the firm should go for the enquiry in terminal figureinal fig ures of the health issues and also they croupe extend the new stores to curl up the customers. They should also plus the benefits to the employee s that should decrease the dramaover ratio. This wrap up is prepared for the CEO of McDonalds cooperation for victorious decision on future strategyTerms of ReferenceThis report is prepared for the internal use only and prepared as the appellative for the strategic management in the course of MBA. The use of this is primarily for accessing the arrest and awarding gradesIntroductionMcDonalds is the one of the biggest fast food chain restaurant having more than 32000 restaurants in 199 countries whole over the world. McDonalds is selling majorly soft drinks and fast food items corresponding fries, chicken, burgers, salads and ice creams. The restraints of mc Donalds are operated such(prenominal) as an affiliate, franchisee, or the corporation itself. In term of long term goals of the mc Donald is satisfaction of customer and cons ignment to their brand. Brand image and the unique brand logo are one key achievement portion for the McDonalds.This is report prearranged in a certain manner that is in the first sermon about the external analysis of the government by stamp and PORTERS pentad force set for the analysis in assiduity level. In the internal analysis part discuss about the tangible assets, key success factors ,supply chain, SWOT analysis and formulate the TWOS matrix for the future analysis for future strategies and in the conclusion part entitled about the recommendations and long term strategies.EXTERNAL ANALYSISIn this section deals with the considerate the factors that effect the organization by the external environment. These are forces that the organization would take steps to compress the effects but could non avoid it tot eithery (Strategic Management plow 2000)Macro environmentThe analysis of macro environment is push aside be through by PESTLE analysis and also other(a) factors s tandardized competitors, suppliers, customers. The complete analysis of PESTLE is given in the appendix and or sowhat key factors is given in the table 1The important factors like obesity and other competition is more in the fast food chain, and mc Donalds is also concentrating on the green, cost to contract competitive march on on competitors, menu establish upon the region such as in India Mc Donalds introduced mack ALLU and O fat items are preparedness in the menu for casting the customers more oriented about obesity.Porters five force modelPorters five force model is used for the analysis in the industry level complete analysis of five ushers is given in appendix and summarized is given belowIn the case of MC Donalds from the five porter analysis new entry is very high collectible to less(prenominal)(prenominal) regulation in fast food industry, substitute threat is low, where as competition and rivalry among the firm are very high so McDonalds pricing is very import ant. Supply power is low unless the main component part of the product is not readily availableOpportunities and threatsThe external audit puke be done by using opportunities and threats, the whole Opportunities and threats are explained in the appendix. The opportunities for the mc Donalds such as low cost menu will gain competitive advantage and attract more customers and also such as people also more oriented about the health so McDonalds covers more on healthier goods o attract the customers. They have main threats like obesity, the relationship with the franchiser, tone of voice also decreasing due to the lack of proper jibe on the franchising, such as Ameri put forward brand appeal act as threat in some anti Ameri enkindle countries, Global recession and fluctuating foreign currencies cay success factorsMc Donalds one of the success factors is franchising with the local suppliers, uniqueness in the brand image, pricing of the meal with the best price, store location in ma ximum places and easy access to the customers, turnover rate per chair in the McDonalds is high as compare to the restaurants, attracting the customers based upon the kids menu and toys .introduction of breakfast menu and coffee in the menu, localization of their menu like introduction MAC ALLU and mutton in India. Appearance of the restaurant more focus on their values and productivity, Promotion and a continuing focus on build brand loyaltyInternal Analysis of McDonaldsInternal analysis of McDonalds substructure be done based upon the tangible assets and nonphysical assets, strength and weakness, supply chain. These are the factor on which firm has control as they kindle be alter based upon available resources and increase capabilities.Tangible assets and intangible assetsThe vital tangible assets of McDonalds comprise of resources such as financial resources, and also resources in call physical elements location of restaurants in city, airports and in all happening locations , the trade secret of their recipes, innovative production processes etc.and resources in terms of organizational such as efficient strategic planning processes, control systems and excellent evaluation. The vital intangible assets of McDonalds are unique brand identity element and their logo. The capabilities of the organizational also important such as satisfaction of the customers are high, product innovativeness and excellent product development capabilities (see appendix).Strengths and weaknessesThe strength and weakness are explained in the appendix. The strength of McDonalds is the brand image, their innovative products, uniqueness in their products, strong finical position, more in terms of their stores in the main cities, employee educate such as mangers pop off training in Hamburger University, segmentation of their product such as kid meal, happy meal etc. more concentrate about the customers, turnover per chair is more in McDonalds, strong advertisement campings to attract the more customers, kids offers to attract more customers. failing of mc Donalds such as No clear strategic direction, out of date facilities, higher overall costs than rivals, subpar profits, Falling behind in RD, besides narrow product line. High Staff Turnover including Top management, foamy food image, Uses HCFC-22 to make polystyrene that is contributing to ozone depletionTWOS MatrixTWOS matrix is build based upon the internal and external factors by using strength, weakness, opportunities and threats. It is constructed based upon comparing of all(prenominal) factor with the other factors of SWOT. The complete TWOS matrix is given in the appendix. In this based upon the TWOS matrix explain about the differ combination as possible.Strengths and OpportunitiesBecause of strong financial position and their unique brand image McDonald posterior extend their stores and attract new customers.Due to their unique brand image they can advantage over their suppliers.Due to t he strong financial position they can invest more on the Research and development practice session in term of decreasing the fat in the food.Strengths and threatsMc Donalds can take more control on the franchise dealers to maintain the quality and reputation.They can offer novel product and keep the innovation to attract the new customers and existing customers.Weaknesses and OpportunitiesBy creating product in a greener such as decreasing HCFC-22, product quality can be increase and also plan for the healthy meal.By Increase stores in distinct locating that increases the market penetration.Weaknesses and ThreatsApplying 0 grams Trans fat that increase the customers who are more oriented about the obesityBy changing HCFC -22 in to the carbon free HFC (hydro fluorocarbon) which is not harm to environment.Future systemBased upon the various analysis of the firm and by comparing the different analysis the future strategies can be planned. The strategies in term they can be broadly classified in to two broad sections such as business and corporate strategies. The recommendation of the firm based upon the analysis is listed in following section.Business level strategySuch as differentiation of their product to gain competitive advantage, increase in the research to develop food with low fat content that can be decrease the obesity, focusing more on the customers to increase the customer loyalty to the brand. They can also concentrate about the organic food, Labor turn rate should be decreased by giving different bonuses and hard-hitting salaries.Corporate Level StrategyDue to the strong financial they can penetrate into new market by increase their store in different locations. And also they go for back ward integration with the suppliers to get the quality goods for low price.ConclusionIn this report entitled about the different external and internal environment of mc Donalds and by constructing the PESTLE analysis, SWOT analysis and also prepare the TWOS ana lysis for the long term strategy in the future.mc Donalds increased their stores about 50 percent in last five years but there is only less increase in the sales about 2percent only so McDonalds is planning to change their strategies to attract the more new customer and planning to increase the customer life time value such that the sales can be increased they should consider about the following factors such as health issues they can increase the organic food, they can also by employing and also proper planning of the queues that can decrease the queuing time and also increase the turn over. Price is also one of the important factor because bargain power is low they can be shift to the other company, so pricing can be properly planned. They can be plan for the deli burger which cost low that will give price advantage whereas they also keep the organic burger in their menu to attract the health oriented customers and also they can be focus on o fat food that can also attract who conc rete about diet. They should plan to decrease the employee turnover ratio.Limitation and RecommendationThe bound would be that the current strategies that are practiced currently have not been reviewed in depth the future research can be done on analyzing the current strategy of mc Donalds and see how these can be amended to formulate the future strategy.