In the Unit 1 Discussion Board, you reviewed a strengths, weaknesses, opportunities, threats, and trends (SWOTT) analysis of a fast-food franchise that was done in 2013. There have been many more recent changes with the fast-food giant toward improved business results. Read this article http://www.businessinsider.com/mcdonalds-unveils-turnaround-strategy-2015-4
on these changes, and conduct a brief SWOTT analysis based on these new changes that includes the following:
Strengths: The internal and external characteristics of a company that are stronger than its competitors
Weaknesses: The internal and external characteristics of a company that are weaker than its competitors
Opportunities: The issues internal and external to a company that can affect the company and its competitors in a favorable way
Threats: The issues internal and external to a company that can affect the company and its competitors in an unfavorable way
Trends: The internal and external patterns in the organization, market, or industry
Part 2 (post this response in the appropriate topic within U2 DB (labeled “for” and “against”)
Based on the first initial of your last name, complete the following:
First initial A-L: Provide an argument for the success of the strategies that a fast-food franchise has instituted. Submit your position by posting in the Unit 2 Debate forum under the for topic.
McDonald’s SWOTT Analysis
- McDonald’s is the second-largest fast-food chain in the U.S. with over 36,000 locations. It is only second to Subway.
- McDonald has a high brand presence in the region – it is one of the most recognized fast-food brands in the U.S.
- High market power over competitors and suppliers. For instance, the agreement with Coca Cola Company to acquire soft drinks at a lower price and passing the lower prices to customers.
- McDonald’s has a strong supply chain network, meaning it is easier reach customers in the market
- Economies of scale due to its large size (Peterson, 2015).
- Declining sales volume and customer traffic
- Poor relationship with franchisees
- Negative public image
- High employee turnover due to low pay
- Bloated menu resulting to slow customer service and problems with food preparation in the kitchens
- Majority of McDonald’s outlets are aging giving the stores an old-fashioned image among customers (Peterson, 2015).
- The fast-food industry is still experiencing growth and as such McDonald’s can capitalize on this to gain more market share
- The opportunity to easily expand in overseas markets including developing nations
- The opportunity to attract more people in the low income bracket due to lower menu prices
- McDonald’s can take advantage of the growing health consciousness among consumers to introduce healthier fast-foods in its menu
- Intense competition from full-service restaurants perceived as offering quality foods
- Rising public consciousness about the effects of fast-foods on the health of consumers
- The possibility of an economic recession may negatively affect the food industry
- Issues of food quality and safety due presence of GMO foods
- McDonalds began serving an ‘all-day breakfast’ to customers in select outlets, which means extending the breakfast items throughout the day
- Introduce more quicker service
- Offering healthier diets
- New trend where breakfast is served as brunch.
One of the strategies that Mc-Donald’s has instituted is customer service (Peterson, 2015). Customer service is a critical aspect in determining the satisfaction levels of customers. With regard to customer service, speed is of great essence in the fast-food industry. Quicker services translate to happier customers. Another critical aspect in customer service is the friendliness of the employees towards the customers. Customers appreciate friendly services and are more likely to return in outlets where the employees show basic courtesy. Although providing huge discounts may have a short-term influence in the number of customers who walk in a particular outlet, the quality of customer service has the ultimate power to create lasting relationships with customers. It is relatively difficult for fast-food outlets to improve customer service compared with full-service restaurants due to the quick-service nature of the interaction with customers.
McDonald’s has also resolved to offer breakfast around the clock. Traditionally, McDonald’s offers breakfast up to 10:30 a.m. where it introduces other menus (Peterson, 2015). The current plan is to offer breakfast items past the prescribed hours. This strategy may translate to increased sales for the breakfast items. This is because people do not restrict breakfast items to morning hours only. Customers may wish to take light meals in the afternoon or in the evening, and breakfast items may the best option available for them. Due to the changing nature of the workplace, some people report to work in odd hours. Such people may prefer to take breakfast items past the breakfast hours.
Peterson, H. (2015, May 2). McDonald’s is about to unveil plan to save its business – here are 8 things investors need to hear. Business Insider. Retrieved from http://www.businessinsider.com/mcdonalds-unveils-turnaround-strategy-2015-4?IR=T
Related: Starbucks Strategy