McDonalds Case Study

1. Strengths:

-Strong brand name, image and reputation

McDonalds has built up huge brand equity. It is the no 1 fast food company by sales, with more than
31,000 restaurants serving burgers and fries in almost 120 countries. The image of McDonalds is
recognized everywhere. This brand is in top ten of the most powerful brand names in the world with
Coca-Cola, Nokia or GM.

-Large market share

McDonalds is considered as the largest player in size and global reach. When Wendy's or Burgers King
are losing market share in 2006, McDonalds still increases its market share. Market share of McDonalds
in the recent time is about 19% while Yum!Brands is 9% and both Wendy's and Burger King is 2%.

- Specialized training for managers

McDonalds is very serious on training managers. This company has its own program to train managers
the most professionally, which is called Hamburger University. As a result, McDonalds has many good
managers who can help company development well.

-McDonalds Plan to Win

McDonalds customer-focused Plan to Win provide a common framework for its global business yet
allows for local adaptation. Through the execution of initiatives surrounding the five elements of its Plan
to Win-People, Products, Place, Price and Promotion-McDonalds has enhanced the restaurant
experience for customers worldwide and grown comparable sales and customer visits in each of the last
eight years. This Plan, combined with financial discipline, has delivered strong results for company's
shareholders.

McDonalds is considered the first one enters to fast food industry. It initiates to other brand to enter this
industry. As a result, when think about fast food, customers always remember McDonalds first In fact, in
some big countries, especially in US, McDonalds is the first choice of a large number of customers.

Technology Innovative:

McDonald's is keeping at the forefront of technology around the globe. For example, In Brazil
McDonald's is currently studying the installation of Internet access terminals in some outlets as well as
enabling customers to order online. This will create a more efficient process that will reduce the amount
of lag time between a customer's orders and pick up of the order.

-Good marketing strategies:

No matter the continent, children and adults know the face of Ronald McDonald is synonymous with the
colossus restaurant chain. This results in wonderful marketing strategies among management which
conducts a very thorough market analysis, resulting in much success around the globe.

2. Weaknesses:
-Unhealthy food image

McDonald's has been impacted by negative press like the documentary "Supersize Me" by Morgan
Spurlock in which he contributed our society's obesity to McDonald's and other fast-food chains. In fact,
each McDonalds dishes provides large amount of calories but not too much nutrition.

-Customer loses due to fierce competition

McDonalds has to compete with many strong brand name in fast food industry such as Wendy's. Burger
King or Yum!Brands. This fierce competition makes McDonalds loose a large number of customers who
prefer favor of other brands

-Problem related to health issue

McDonalds use Trans-fat and beef oil in their food. Although it is not illegal, it affects badly on
customer's health because Trans-fat is causes of some kind of cancer. Consequently, a number of
customers who care about their health stop eating at McDonalds restaurants. It makes revenue of
company decrease.

-Legal action:

McDonald's has been involved in a number of lawsuits and other legal cases in the course. For example,
there are many case which involved with trademark issue. McDonald's force many others restaurant,
company of just a coffee shop to change their brand name because of keeping "Mc" letters.

-Unbalance meals:

Although McDonalds tries to update its menu by healthy criteria, McDonald's meals are still unbalance.
For example, there are many dishes with chicken (both grilled and fried), bacon, beef, rib or egg. Besides,
just several dishes are salad with vegetable and fruit. Moreover, amount of fruit or vegetable is not
much.

-High employee turnover rate

Although McDonalds has many good managers as well as skillful employees, the turnover rate is still
high. Every year many of their employees are fired out of the restaurants. Moreover, many others quit
their jobs, especially part time employees because of low salary as well as too high working pressure.

-Action related to environmental issue

McDonalds uses HCFC-22 to make polystyrene that is contributing to ozone depletion. The company has
to repair this weakness if doesn't want to be criticized.

-Dissatisfied Franchisees:

Franchisees are beginning to become very dissatisfied with the fees that McDonald's are forcing them to
pay. As the company continues to expand, they age also increasing the amount of fees franchisees have
to pay for the use of the notorious fast-food brand. Many people are not very happy about this and as a
result many franchisees are selling their businesses.

References:
Dess, G., Lumpkin, G. & Eisner, A. (2008). Strategic Management (4e). Boston: McGraw-Hill Irwin,
Siehoyono, L (2005) The McDonald's Case: Strategies for Growth McDonald's History. (2007). Available
on www.mcdonalds.com. Accessed on September 17th, 2008.