McDonalds Beefing Company SWOT Analysis - Case Study Example

McDonald INDUSTRY Student’s name Code & Course Professor’s name University City Date McDonald’s Beefing Company Introduction McDonald Beefing Company in India experienced a tremendous expansion in the year 2001. It expanded its operational market not only in India but also in the global market. In 2003, the company expanded their outlets from 15 to 80, and a sum of Rs 10 billion from Rs 46.50 in 2001. The operation of this company was operational for long with minimal profits (McDonald, et al, 2016). Over the last three years, the company have posted a great achievement in terms of product delivery in the global market. Despite of low returns on sale, Jasia is optimistic and dares to invest more in infrastructural development plan. Many people wondered of the McDonald’s investment move yielding low returns from it. A lot of capital of overs 30 million was needed for the investment, India offered low market for this products (demand potential). This made many investors think that McDonald’s business was not viable. McDonald continued to plan for his business having strength, weaknesses, opportunities as well as business transformation (McDonald, et al, 2016). QN1. SWOT ANALYSIS Strength of McDonald’s Company Increased global demand of their products As a global food powerhouse, McDonald Company has got high demand of its products over other companies. It has widened its market globally whereby it operated more than 30,000 restaurants globally serving 45 million customers in 120 states daily in the year 2000. This has led to the general increment in the demand of its products in the global market (McDonald, et at, 2016). Increased sales of their products The increased demand for the McDonald Company products has led to the increased sales of their products. This in turn has resulted to a huge rise in their financial base to over US$40.2Billion (McDonald, et al, 2016). Tentatively, it has led to the increased production to curb the widened market globally. A stable political will The Indian government is assisting in provision of capital for the running of McDonald industry. Sometime it gives a tax free leave to the company as well as subsidizing their production process. Furthermore, the government meets part of their production fee hence reducing their inputs and increasing their output. The government also offers security services to this company for its effective running (Furlong, et al, 2015). Successful infrastructural development The transport and communication network in India is smooth making movement of raw materials from the farmers to the company. Moreover, these products easily reach the market within a shorter period through air or electric trains. The advancement in the information technology have influenced the marketing strategies of this company. it uses social media like Facebook, instagram and Skype to reach the global market. Low level of competition Due to limited number of companies engaging in foods supply, this company took an intervening opportunity to dominate the entire market. Its financial base and management is effective work. Availability of raw materials and labor force This industry employ qualified workers who are readily available for labor supply. The raw materials are also evenly distributed in Egypt for this industrial use. Farmers in Egypt avail varieties of animals for this industry hence continuous production process. Feeder industries like the leather making industries are also located near McDonald Company making it easier for it to dispose off the wastes like wool. These wastes generate capita to the company as they are sold to the associate companies without any transportation cost (McDonald, et al, 2016). Technological advancement Improved technology in India renders a strong pillar to this industry. This is because the produced beef is well kept in sophisticated equipment6s like refrigerators. This makes these perishables to be kept for a longer time. Use of electric trains as well as aircrafts to ferry their products reduces the risk of wastage through perishability of these products. Use of modern machines in the production process improves the efficiency of production and productivity (O’Neill et al, 2015). Weaknesses McDonald Company experiences a weakness in the management process. Despite of proper planning, the managers over rely on excessive investment with low profits as seen in 2001 (McDonald, et al, 2016). This leads to low income with huge investment hence operating at a low return rate. The company also experiences a negative impact on its market. This is seen where the 80% of the population are vegetarians. Cultural beliefs like those of Muslims and Hindus. The Muslims do not eat pork while the Hindus do not over rely on beef nor any meat. This reduces the market for their products hence reducing their returns (McDonald, et al, 2016). In Norway, this company faces a weakness whereby the Norwegians buy their products rather than the Indian products. As a result, the market for their products reduces hence reduced returns. The community also depends on local goods like potatoes halting the market for this products. Opportunity The McDonald Company have created several opportunities for workers. Indian citizens are employed in this company hence obtaining their income from this. This raises their living standards, increases investment rate hence reducing the dependency ratio. The government has also extracted an opportunity in investing in this venture. This makes an advantage whereby the imports supersedes the exports. Consequently, the gross domestic products increases rising the net domestic products. Tax imposed by the government to this company is used for developmental programs like improvement of infrastructure, social amenities as well as urbanization (McDonald, et al, 2016). The company utilizes the global market to maximize their profits. This is enhanced by effective marketing and provision of quality goods to the customers. Since there are no other big companies posing a lot of competition to it, it utilizes this chance to suppress the upcoming companies, monopolize the market and maximize its profits (McDonald, et al, 2016). The company also creates a wide pool of opportunity to sub-industries. These industries include the shoe and leather wear making industries. They sell their waste products like wool from this industries, this creates an opportune moment for capital formation. More so, the industries formed are created with an easier way of obtaining their raw materials. Transformation This industry have gone through several pools of transformation. It offer diversified products in the contemporary market. It offers different products to world restaurants in Asia, America, Canada and even Africa. There are also economeals that are given to low income earners. Such meals are supplied by the low cost supply chain. New products like Chicken McGrill and Pepsi products. Such goods accommodate the low income earners in the society (McDonald, et al, 2016). From a single entity it has registered an increased volume of customers worldwide. This renders it a global status as one of the best restaurants. Despite of the cultural believes in India and overdependence on local foods, the company has struggled to meet its ultimate goal of provision of services to the global market. The company also came up with a successful supply chain that reduced the cost of raw materials hence maximizing its profits. This supply chain obtained raw materials not only in India but also in the external countries like Norway (McDonald, et al, 2016). In terms of marketing, the company uses the cartoon network and the zee to market its products. These networks are also use in launching new products in the market. As a result, market for their products is increased as many people watch this programs. The world organizations like UNESCO and community based groups have made it possible for the company to reap its maximum demand. Such groups market. Sale and also finance this company’s activities (McDonald, et al, 2016). QN 2. The industry and its competitor As an industry the company faces some challenges including poor infrastructure, occasional power outages and scarcity in capital. This problems are solved hence strategizing in maximizing profits. The industry is controlling the global market from Europe, United States China and even Japan. This increases the operational income as shown in the table. The figures are on US$(millions) in the year2000. USA EUROPE AMERICA ASIA OTHER TOTAL Depreciation 418 297 69 121 61 1011 Operating income 1733 1180 102 442 94 3330 Total assets 7877 7084 1856 2790 1069 21684 Expenditure on capital 469 798 246 224 161 1945 revenues 5259 4754 949 1987 1294 14243 (McDonald, et al, 2016). This industry faces a stiff competition from Norway where the buyers prefer their products over the Indian products. This reduces market for b this company hence reduced income. The strength of this company captivates a less impact from its competitors. The Rupee currency is also stable in the global market hence denying their competitors a chance to adopt the market. This company offers a wide varieties of products which include Combo meal, burger, fries and coke. The meals are affordable making more people opt to buy then in place of their competitors. QN 3. International strategy of the company In order to suit the local culture, McDonald industry is adopting local foods in different states. In Japan, it is including teriyaki burger in its meal, rice dish in Indonesia and McLox Salmon sandwiches in Norway. The company is strategizing to merge with different competitor companies like Connaught Plaza Restaurant and Hardcastle Restaurants among other global companies to curb competition (McDonald, et al, 2016). The industry is working on the supply chain where the quality 5raw materials will be allowed. McDonald has set aside over US$ 12.8m to set up global supply network. This will ensure steady supply of raw materials hence continuous production process (McDonald, et al, 2016). In the management sector, the industry tends to acquire quality work force to ensure that they provide quality services to their customers. To recruit such employees, the management uses the people in charge of food logistics to ensure that food produced are of high quality. Furthermore, the workers must be well verse with the new technological advancement for effective machine operation and effective storage facilitation. In terms of performance and operation, McDonald is opening, more outlets in the global market. Like in 2000, he opened over 25 outlets globally and is targeted to more than 100 outlets. This will increase its capital as well as the revenue earned per company. By 2000, the sales had increased to over 70% making the revenue to increase tremendously. This makes an expectation of the company to yield greater profits to meet its operational cost (McDonald, et al, 2016). Conclusion McDonald Company have influenced the food production market globally. Its success depends mostly on the management as well as the work pool available. The steady supply of the raw materials and labor force in the global market influences its growth. Technological advancement have ease the marketing process of this company. It has also improved the production process of this industry hence continued production. Curbing competition through amalgamation and price reduction has rendered a monopoly power to this industry hence more sales. The government offers subsidies, security and infrastructural improvements, cutting the production cost of this industry. This yields a low running cost and an increased output. The Indian Rupee is overvalued in the currency market. This makes it easier for working in foreign states. The tendency of maximizing profits is extracted by the quality services offered by McDonald industry workers. Reference list Furlong, P., Bridges, J.F., Charnas, L., Fallon, J.R., Fischer, R., Flanigan, K.M., Franson, T.R., Gulati, N., McDonald, C., Peay, H. and Sweeney, H.L., 2015. How a patient advocacy group developed the first proposed draft guidance document for industry for submission to the US Food and Drug Administration. Orphanet journal of rare diseases, 10(1), p.1. Jevremovic, T., Schow, R., McDonald, I.V. and Rey, A., 2015. Unique approaches in emphasizing the role of reactor laboratories and facilities for training and education of future nuclear engineers' without the borders' (No. JAEA-CONF--2014-003). McDonald, P.J., Shon, E.R. and Kulkarni, A.V., 2016. P. 013 Conflicts of interest in neurosurgical research-comparing voluntary physician disclosure to mandatory company data. Canadian Journal of Neurological Sciences/Journal Canadien des Sciences Neurologiques, 43(S2), pp.S24-S24. McDonald, L., Lambrelli, D., Wasiak, R. and Ramagopalan, S.V., 2016. Real-world data in the United Kingdom: opportunities and challenges. BMC medicine, 14(1), p.97. McDonald, P.J., Shon, E.R. and Kulkarni, A.V., 2016. P. 013 Conflicts of interest in neurosurgical research-comparing voluntary physician disclosure to mandatory company data. Canadian Journal of Neurological Sciences/Journal Canadien des Sciences Neurologiques, 43(S2), pp.S24-S24. McDonald, G., Mangin, T., Thomas, L.R. and Costello, C., 2016. Designing and financing optimal enforcement for small-scale fisheries and dive tourism industries. Marine Policy, 67, pp.105-117. O'Neill, S., McDonald, G. and Deegan, C.M., 2015. Lost in translation: Institutionalised logic and the problematisation of accounting for injury. Accounting, Auditing & Accountability Journal, 28(2), pp.180-209. Roche, R.C., Harvey, C.V., Harvey, J.J., Kavanagh, A.P., McDonald, M., Stein-Rostaing, V.R. and Turner, J.R., 2016. Recreational Diving Impacts on Coral Reefs and the Adoption of Environmentally Responsible Practices within the SCUBA Diving Industry. Environmental management, 58(1), pp.107-116. Read More