SWOT Analysis of McDonalds Australia Holdings - Case Study Example

McDonald’s Australia Holdings Student’s Name: ID Number: Date: 441793-McDonald’s Australia Holdings Executive Summary In conducting SWOT Analysis of the company, the management seeks to identify and understand specific aspects of business environment. It also aims at getting deeper insight on how each of the aspect affects the performance of the company (Helms, & Nixon, 2010). The analysis enables the management to make strategic decisions concerning marketing and other core activities of the organisation. In most establishments, the management conducts SWOT Analysis after every three to five years due to the fact that environment is constantly changing. In respect of this fact, the company is able to cope with changes and utilise opportunities that come along with them (Mohapatra, & Singh, 2012). This paper aims at identifying several elements or variables that affect business performance in respect of McDonald’s Australia Holdings. It develops SWOT Analysis and provides further explanation in reference to this particular establishment. Introduction and Company Background SWOT Analysis is one of the essential management tools that companies use to identify their actual position in terms of competitiveness. Management uses the analysis to develop strategies as well as make major marketing decisions (Gao, & Peng, 2011). SWOT stands for strengths, weaknesses, opportunities and threats. The analysis is a self-assessment tool which seeks to expose internal strengths of the company as well as its weaknesses. In addition, it highlights external opportunities available and potential threats that are most likely to affect the company performance. From this analysis, the company management is able to make viable decision hence utilise all the positive aspects such as strengths and weaknesses to counter negative ones i.e. weaknesses and threats. The main aim of SWOT analysis is to identify internal and external factors affecting performance of the company (Kajanus, Leskinen, Kurttila, & Kangas, 2012). In other words, it seeks to justify the current performance as well as provide realistic ways on how the company can either improve or sustain its performance. In this regard, the analysis enumerates several aspects and classifies each as either strength, weakness, opportunity or a threat to the performance and survival of the company. From this analysis, the management is able to develop a strategic marketing plan which utilises its strength to minimise weaknesses and available opportunities to paralyse its potential threats. McDonald’s Australia Holdings is among the companies that are able to utilise SWOT Analysis as a tool to drive its performance towards its goals. The company boasts of its impressive performance in food and beverage sector (Carbó, 2013). It ranks among top 500 companies in Australia hence a key driver of economy in this particular country. The company has been in operation for several decades with number of restaurants across the country. It controls significant market share due to strong brand which attracts and sustains loyalty from thousands of customers countrywide. The company average revenue also implies its admirable performance in food and beverage market considering the existing business competition especially in this sector (Assaf, Deery, & Jago, 2011). SWOT Table in Relation to McDonald’s Australia Holdings Strengths Strong brand Customer Loyalty Impressive Performance Skilled Manpower Favourable Reputation Quality Products and Services Weaknesses High Operational Cost Complex Management Structure Relatively Expensive Products Opportunities Favourable Public Relations Service Diversification Competitive Market Share Market Trends Threats Ever Increasing Competition Market Dynamics Taxation and Policy Issues It is important to note that SWOT Analysis is a representation of internal and external business environment. Strengths and weaknesses are internal factors that influence company performance. The management has significant control over these factors since they are found within the organisation (Kajanus, Leskinen, et al, 2012). On the other hand, opportunities and threats represent external aspects that have potential impact on the business performance. The management may not have sufficient power to control these factors since they apply to the entire economy. It is upon the management to exploit leadership skills to detect available opportunities and utilise them to counter threats (Chew, Cheng, & Petrovic, 2006). This calls for strategic positioning of the company in such a way that it is able to take the leading role in making use of the opportunities rather than spending money on fighting threats. Another approach of SWOT Analysis is that it identifies strengths and weaknesses as issues that have been active. They are things that have been going on within the company hence explains better the past and current performance of the company. They are always in present forms implying that they have direct impact on the performance. Elements of strength such as consumer loyalty and company profitability can be easily quantified and demonstrated (Gao, & Peng, 2011). One can demonstrate loyalty by showing how customers have been making repeated purchases despite having competitive business nearby. In the same way, profitability can be demonstrated by showing how the organisation records sales turn-over due to sufficient customer base hence covering expenses and remaining with excess revenue. In regard to McDonald’s Australia Holdings, this company has plenty of strengths that can be used to minimise weaknesses. The company has already built strong brand such that customers are proud of associating with it (Wellard, Glasson, & Chapman, 2012). As a matter of fact, the brand alone contributes significant percentage of sales daily. There are customers who buy food or beverage from McDonald’s just because of its brand. Whenever you mention food and beverage restaurant in major cities of Australia, McDonald is among the top brands that comes in customer’s mind (Chen, & Hu, 2010). The brand has reached top of resonance pyramid to an extent that the company becomes among the key drivers of Australian economy. The company uses that loyalty to make sales hence raising sufficient revenue to cover high operational cost. Quality of products and services accounts for high prices. Obviously, most customers would prefer paying more on quality products that going for less quality at lower prices (Mohr, Wilson, Dunn, Brindal, & Wittert, 2007). Since McDonald’s product line is food and beverage, it mainly targets working class residents and students. It implies that it concentrates on providing suitable package for breakfast, lunch and dinner. It is worth noting that most students in higher learning institutions may prefer packed lunch due to time constraint. McDonald’s Australia Holding may decide to introduce special menu which may be provided in a suitable packaging for lunch. The target market in this case is college and university students. In addition, the main idea is to avoid time wastage in visiting the restaurant during lunch time. By saving time which would be used by going to the restaurant physically, student may concentrate in other activities. Such kind of special package for students can be appealing hence generates substantial revenue for the company. Most students carry packed lunch from home with an aim of avoiding time wastage during lunch time. This is due to lack of such package in restaurants around the colleges and in towns. Students need sufficient rest during breaks in order to gather energy for the next lecture. Availability of packed lunch at McDonald’s Australia Holdings provides such value in that students can have enough rest during this time. Having sufficient rest during lunch break requires ready meals packed in good container. Consequently, students can concentrate during afternoon lecture session which is essential for good performance. The new product utilises customer loyalty as strength to exploit opportunity for diversification. With McDonald’s packaging material, many students will definitely go for the product due to loyalty with the brand. The company should make use of this strategy to expand its market base hence maximise revenue generation. The product is a viable means of utilising the opportunity to counter competition. It provides students with better alternative during lunch breaks and such builds strong customer base. It is a new venture that translates students into potential market hence building a sustainable market. As a result, forces of competition can no longer worry the management of McDonald’s Australia Holdings (Patiar, & Mia, 2009). It is also a marketing strategy to prepare future customers especially after studies. Conclusion McDonald’s Australia Holding has sufficient strength and opportunities to improve and sustain performance in this sector. The management should utilise brand advantage to create formidable force which ensures the organisation dominates the market. It has got wide range of products that fits every segment of the target market thus maximising sales revenue. Generating revenue may not be a sufficient conviction of a bright future for this company. New businesses are raising everyday with fresh tactics and strategies. Unless the management provides leadership, this trend may affect the future performance of this particular company. Note that food and beverage companies use every available opportunity to beat their competitors. McDonald’s is one of the target competitors which other restaurants strive to beat in Australian market. Management should ensure the company stays on top of things in terms of product development and customer service. Constant marketing is also essential activity which ensures the company sustains its popularity. McDonald’s Australia Holding should engage sufficient resources in marketing activities especially in new areas. A good example is the development of special lunch for students and marketing the same in colleges and universities. However, proper and strategic marketing requires SWOT Analysis. To conduct realistic SWOT Analysis, marketing manager may require input from customers, employees and other members of management among other business stakeholders. The analysis is a process that calls for market research which provides reliable information. Reference Assaf, A. G., Deery, M., & Jago, L. (2011). Evaluating the performance and scale characteristics of the Australian restaurant industry. Journal of Hospitality & Tourism Research, 35(4), 419-436. Carbó, M. C. (2013). A marketing plan for the ice cream brand Max Adventures in food service. Chen, P. T., & Hu, H. H. (2010). 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