McDonald's

McDonald's

Situation Analysis

Brief History McDonald's & Past Successes/Failures

In the year 1937, McDonald's was begun as a drive-in restaurant by two brothers, Maurice and Richard McDonald from California. With the emergence of a revolutionary concept known as 'self-service', the business further boosted up from generating $200,000 per year in 1940s. Since 1955, the company has been successfully serving almost all across the globe some of their favorite food. Along the way, the company has managed to live their history, as well as created it from drive-thru restaurants to Chicken McNuggets to college credits from Hamburger U and much more. Though the company was not a first franchise, yet it has probably become the leading example of the business model. Today, with its roots that trace back to a sole drive-in began by brothers, Mac and Dick McDonald, McDonald's has grown to a network of well more than 30,000 locations in over 100 nations and serving 53 million customers every day (McDonald's, 2013).

Primary Competitors

There are several fast food restaurants present all over the world today, due to which McDonald's face huge competition. However, its primary competitors include YUM! Brand Inc., Burger King Worldwide Inc, and Starbucks Corporation (Yahoo Finance, 2013).

Core Competencies & Competitive Advantages Exist

McDonald's core competencies include its collective learning within the company, involvement, communication, and a deep commitment for working across organizational boundaries. Furthermore, company's capability of combining resource is also its core competence. Moreover, fast service, quality food, as well as consistency are also included in core competencies. McDonald's offer convenience to its consumers, develops localized products, and provides high quality products in terms of price as well as taste. Thus, McDonald's consistency, taste, quality, service, and distribution are its core competencies that provide it the competitive advantage in markets across the globe. Furthermore, McDonalds' competitive advantage is its large number of outlets, almost double than its rivals, making it more convenient for consumers as compared to any other fast food restaurant worldwide (Ireland, Hoskisson, & Hitt, 2010).

SWOT Analysis

Strengths and Weaknesses Internally

McDonald's associate numerous strengths and some weaknesses as well. Company's strength include its being world' largest fast food restaurant chain in terms of net sales i.e. McDonald's have largest market share in the world as compared to other fast food chains. Secondly, McDonald's brand recognition is among the highest ones i.e. valued at $40 billion, and the company's advertising budget is approximately $2 billion which is more than the next four fast food chains together. One of the biggest strengths of McDonald's is that it adapts to local food menu, since the company operates in several diverse cultures where food taste differs widely and thereby adapting to local taste is really a strength. Furthermore, business is partner with best brands such as Dannon Yogurt, Coca Cola, and Heinz Ketchup. Moreover, company's 80% of restaurants are owned by independent franchisees due to which it can perfect its marketing campaign as well as serving system (Yuece, 2012).

On the other hand, McDonald's also associate some weaknesses including low differentiation ...