McDonalds Australia Holdings - SWOT Analysis - Case Study Example

McDONALD’S AUSTRALIA By student name: Institution name: Date: McDonalds Australia Executive summary McDonalds Australia is a subsidiary of the world’s largest fast food chain. The operations of the McDonalds Company began back in the year 1940. The fast-food chain has over the years witnessed massive expansion and growth in its reach and customer numbers. Currently, the company serves more than 68 million customers daily in its outlets. It has also had its reach in 119 countries in all the corners of the world. (Wilbur, 2009)Currently, it has more than 36000 outlets across the globe. These are indicators of the growth that the company has witnessed in its activities. The Australian branch of the subsidiary has also been on the rise. This is attributable to several measures that are operating to its advantage. This is following the SWOT analysis of the company. Some of the strengths that have been identified include the strong brand name that they possess. It also has strengths in the diversification of the streams of the incomes of the company. Another strength that it has is its global reach. There are some weaknesses that are however faced by the company. They include absence in most countries especially so in the sub-Saharan Africa. There is another weakness of a crowded market place from where it operates. This is due to increased competition. There also exists many opportunities which the company can capitalize on. They include such services as home delivery for the customers. The company can also benefit from changing the habits of the customers and capitalizing on them in a profitable manner. There exist several threats to the continued existence of the chain store in Australia. The main threat is the saturation of the fast food market. This is due to the existence of many players to the sale of the related products. Another threat is the recent shift in the eating habits of the people to healthy diets. This is where they consume foods with low fat contents which the company is yet to deal with. 1. Introduction to the task This study involves the analysis of the performance of the McDonalds Company Australia. This is through the analysis of the strengths and the weaknesses, the opportunities and the threats that it is encountered with. The main reason behind this is to analyze the actors that revolve around the operations of the business. The main reason for the SWOT analysis is to create a basis for improvements. The strengths that are indicated are the factors that act to the favor of the company. The company should therefore work to continually improve them. The weaknesses are the shortcomings of the entity in its operations. They are the actors that drag it down in its operations. Opportunities are factors which exist and which would be profitable and beneficial to the entity one they are put in place. It is through the analysis of the SWOT that businesses are able to strategize on the factors to put in place to facilitate continued operations. The SWOT analysis is therefore the benchmark for identifying the performance of a business. It also aids in the determination of the future outcome of the operations of the business in the future. This is through the analysis of the opportunities that re in place for the company and which it can capitalize on. It is through this that businesses are able to fit into environments which they did not previously operate. 2. Introduction and background of the company The McDonalds Corporation was founded in the year 1940. Since its founding, it has undertaken different operations that are aimed at seeing to it that it provides exemplary services and products to the customers. It has its headquarters located at Oak Brook, Illinois, United States. It has its presence felt in 119 countries across the world. With this, it has opened up more than 36000 branches. As by the year 2015, the company has a total of 420,000 employees. The company mainly deals with the sale of fast foods to its customers. Some of the products which it sells to the customers include, hamburgers, chicken sandwiches, wraps, salads, French fries, coffee, soft drinks, oatmeal and desserts among other many products. As indicated, it has diversified its product line in order to see to it that customers can have all that they require at the counters. (Toivanen, 2011)The company is however faced with competition from different fronts. This is due to the lucrative nature of the fast food market. Some of the major competitors include, Burger King, Starbucks, Yum!Brands, Wendy’s, Domino’s and Darden among many others. The competitors offer both price and product competition. The company as in response to this aimed at creating loyal relationships with its customers. This is in order to counter the competition that is present in the market. 3. SWOT table Strengths Brand name Global presence Product diversification Franchise benefits(Toivanen, 2011) Weaknesses Absence in some markets Crowded market places Quality issues(Toivanen, 2011) Opportunities Home delivery Changing behavior patterns New markets (Bernstein, 1994) Threats Massive competition Healthy diets (Wilbur, 2009) 4. Findings a. Rationale of ranking The basis for the undertaking of the analysis is through the feedback from the customers. Another approach that has been used in arriving at the results is feedback from the employees and the management. The competitors have also has a saying the development of the analysis. It is therefore representative of the feedback and the views of all the parties involved in the growth, development and the continued existence of the company. The above listed factors are the most listed and mentioned by the people who the business affects in its operations. They are hence in a better position and well aware of the issues as pertains to the operations of the company. It is through the feedback such as this that a company is able to improve its levels of service delivery. (Hill, 2014) b. Detailed description of SWOT findings Strengths Brand name - The Company has several strengths that act to its advantage. The first strength of the company is its brand name. The household name and status that the company has acquired over the years has made it earn great returns. This is because many people, who know about the McDonalds, would prefer having their meals and fast foods in the restaurant. This has come to the advantage of the company. (Toivanen, 2011) Global presence - The second advantage of the company is the global status that it has acquired. By its reach being felt in more than 119 countries, this has come with many benefits to the company. The first benefit is the economies of scale that come with operation in many markets. Another benefit of this is the high number of consumers that this brings along with it. This therefore results to an increase in the returns of the company over time. (Hill, 2014) The other strength of the company is product diversification. The reach of the company has been broadened by the sale of different products in the production line. This enables it to cater for all seasonal and unseasonal demands for some products. An example is coffee during winter and summer and other soft drinks. (Hill, 2014) Franchise benefits –more than 80% of the operations of the company are on franchises. This is where it invests into an existing and an already existing business. This has the benefit of that startup costs are minimal. Businesses also come with their loyal customers. Weaknesses Absence in some markets – the company has many countries that it has not ventured into. This has an effect in that the total numbers of clients that it serves are reduced. Venturing into the countries would create a new market and new customers. This therefore would bring about additional revenues for the company. Crowded market place – with many different firms operating the fast food business, the revenues of the McDonalds are declining. The company has in effect not put in place adequate measures to counter the effects and forces of the competition. This is, therefore, a weakness on its part. Quality issues - over the recent past, the company has received issues about the quality of the foods and meals that they offer. This is as compared to those that are offered by the competitors. This is a weakness to the company as it has resulted to a decline in the customer numbers over the period of time. Opportunities Home delivery – there exists the opportunity of the company operating in a home delivery system rather than focusing solely on the restaurants. This trend of home delivery has been on the rise and the company should take advantage of it. (Bernstein, 1994) New markets – the company has close to 100 more countries that it has not ventured into. This is a huge number of countries. By venturing into them, it will be able to increase the customer numbers and revenues that it makes from its activities. Changing behavior patterns – there has been a move by many people into healthy diets. The company should in respect to this tune their meals and products to have healthy ingredients. This can be done through such things as reduction in the calorie levels of the foods. It will as a result of this recoup the lost customers and even make more. Threats Competition – over the recent past, the company has faced stiff competition on its activities. In some markets, the competition levels have made it to lose its f=grounding resulting to reductions in the levels of revenues that are made. This is a threat to the continued existence of the company in some markets. Healthy diets – people over the recent past have undertaken to embark on the consumption of healthy foods. This is through reduction in the fat components and sugar amounts. This is at the expense of the company. This is because most of its foods have high fat and calorie components. This threatens its continued operation. (Wilbur, 2009) 5. Recommendations a. Target market There are several factors that can be put into use to see to it that the company continues to be a going concern. One of them is the entry into new markets. This will aid in the increase in the revenue and profitability levels. One of the places where the company has not made advancements into is the sub-Saharan Africa. This is a region which has huge potential for the success of the company. The new products developed such as ice cream and chocolate can also be sold to the already existing markets. (Gerbe, 2007) b. New product The company has in its years of existence put more focus on such things as meat and other protein foods. It should try selling other products aimed at raising the levels if revenues. Examples include ice creams and chocolate all of which are loved by many. This will be one of the diverse products of the company which will aid in filling the revenue basket of the company. (Gerbe, 2007) c. Customer value proposition Customers are the reason behind the success of firms. Creation of value to the customer is therefore mandatory for companies that seek to attain developments in their operations. Value to the customers can be improved by the level of service that they are given at the restaurant. High service levels will mean that they get value for their money and will be in line for creation of loyal relationships. Value can also be improved by increase in the quality of products. The company should therefore focus on increasing the quality of the meals and drinks that it offers to its customers. Ice cream and chocolate can aid in the creation of value to the customers. This can be through such things as customized production which is according to the requirements of the customers. (Gerbe, 2007) d. SWOT strategy used In the development of the ice cream and chocolate business, there are several elements of the SWOT analysis used. The first is product diversification. This is increase in the number of products in the production line of the company. The second element is new markets. New markets will aid ion the development of the product and increase in the revenues that are generated from the new products. 6. References Bernstein, C., & Paul, R. N. Winning the chain restaurant game: Eight key strategies. (1994). New York: John Wiley. Gerbe, K. Intercultural communication as a strategy of global marketing: Marketing strategies of McDonald's in India and Saudi Arabia. (2007). München: GRIN Verlag GmbH. Gilbert, Sara. Mcdonalds. (2011). Creative Paperbacks Inc. Hill, C. W. International business: (2014). Competing in the global marketplace. Kincheloe, J. L. The sign of the burger: McDonald's and the culture of power. . (2002). Philadelphia: Temple University Press. Toivanen, O., Waterson, M., & Centre for Economic Policy Research (Great Britain). Retail chain expansion: The early years of McDonalds in Great Britain. (2011). London: Centre for Economic Policy Research. Wilbur, T. Top secret recipes unlocked: All new home clones of America's favorite brand-name foods. (2009). New York, N.Y: Plume Book. Willems, M. Bon appétit: Restaurant design. (2006). Amsterdam: Frame Publishers. Read More