McDonald's as we know it was founded by Ray Kroc, who built upon thehamburger stand of Dick and Mac McDonald, which sold hamburgers and friesto customers. Mr Kroc decided a franchising model was the best way to growthe company, and it turns out he was right. The company has grown from itsfirst franchise in 1954 to having 32,000 restaurants in 117 countries by 2010and employing 1.7 million people. The company had massive sustained growth,and moved into many territories across the world. McDonald's was a story of success.From 2000 onwards, the image of the company was tarnished, becoming aneasy target for media and government for various reasons, and so profitsdwindled.However, the company fought back, with a change in marketing strategy andcorporate policy as a whole, and sought to turn its fortunes around with its'Plan to Win'.During the recent recession McDonald's has been in rude health, with profitsspiralling due to people once again prioritising value and convenience overother values such as sustainable sourcing and healthy eating. As is discussedlater on, the recession won't last forever and so future policies will again haveto deal with the public's changing tastes (excuse the pun).Strategic management is a key area in business and can help to decide the fateof a company when analysing where its strengths, and perhaps moreimportantly, where its weaknesses lie. A company that can successfully identifythese characteristics will certainly have an advantage over its competitors. Welooked at McDonald’s using the SWOT, PESTEL and Michael Porter methods.
This is an initial assessment of McDonald’s performance.StrengthsWeaknessesStrong brand image & recognisablelogo.Ranked very highly in Fortune 500'slist of most admired food companies.Image of cheap food even though it isnot that well priced.Global spread of restaurants provideseconomic resilience.Established staff training program.High employee turnover increases HRcosts.Media and government tend to givethe company a bad image.Growing concern for obesity andhealth issues.OpportunitiesThreatsOrganic foods.Healthier foods.More animal welfare conscious foods.Growing demand for coffee fromMcDonald's.Growing concern for animal welfareand ethical sourcing of ingredients.Major competitors such as Burger King& KFC.Upmarket chains such as Eat,Starbucks & Pret.