Mcdonald Pest Swot

1. INTRODUCTION

In 1954, exclusive milkshake maker Multimixer, Raymond Albert Kroc mortgaged his home and went all the way to California after hearing about Dick&Mac McDonald hamburger stand made used of eight Multimixer at one time. He bought over the license and start opening up several restaurants all over US. The first McDonald restaurant was in Des Plaines, Illinois earned $366.12 on its very first day (McDonald, 2007). Over the time, it had grown to one of the largest food service company and holds a strong position in the market. The company is built out of five major activities; Operation, Development, Finance, Marketing, Human Resource (Bized, 2006). Using the PEST and SWOT analysis, this report attempts to observe the structure inside McDonald Corporation and its adaptability level to the external environment. Some possible future strategies were also mentioned within, consisting what sort of movement the company might want to take to expand their market.

2. Research Objectives

• To investigate the management system of one big corporation

• To analyze its present position, their stability in the market and the competitions it faces using the PEST and SWOT Analysis method

• To acquaint the strategies taken by this corporation in order to held its position

• To suggest some future strategic direction the company might want to take to keep up the trends in the world today.

3. Research Methods

3.1 Secondary Data

This report were base on sources taken from management books and ase study books, online journals, articles from sites related to the company and its overall performance.

3.2 Evaluation of Secondary Data The sources of data mentioned above were put together and evaluated to bring up the ideas and facts it contains.

Primary data is not given due to the limitation of area this report observed.The limitation of the secondary data approach would be the inability to give out societies’ points of view about McDonald Corporation.

4. Main Body

4.1 Company Background

After 10 years of existence, McDonald entered Wall Street for the first time in 1965, offering on the stock exchange worth $22.5 dollars. Today their stock market had risen up to $ 59.37 dollars in the first quarter of 2007.

According to Fortune 500 index 2007, the company ranked as the 108th America largest corporation, followed by its biggest competitor Wendy’s International and Burger King Holdings placed in 562nd and 842nd.

Figure 1. Revenue (from 1997 to 2006) $Mil (MorningStar, 2007)

Ray Croc based his company in a fundamental principles called Quality, Service, Cleanliness and Value (Q., S,. C. & V.). Interbrand rewarded McDonald as the leading brand in the world in 1997, but then it slipped to the 2nd best brand in 2006 (Bized, 2006). The icon, Ronald McDonald вЂ"the clown- was even more adored by younger customers after they launched such packet called “Happy Meal” in 1979, offered gifts and toys within the meal. The company’s power is more under its strategic marketing, which tries to adapt to local tastes and still didn’t lose their trademark in the same time.

Today, more than 3000 outlets is open in 120 countries, serving up to 52 million of people around the world, 80% are owned by franchisees (McDonald, 2006). A percentage of its revenue is allocated for their marketing research and R&D. McDonald in Asia was started in Japan (1971) and had spreading its branches to a wider market such as in India and Sri Lanka.

4.2 PEST Analysis

By analyzing its political, economic, socio-cultural and technology aspects, we can define how McDonalds Corporation can adapt to the external environment.

Political:

In order to gain good impression of a fun and caring family restaurant, McDonald had built Ronald McDonald House Charity Fund (RMHC), aiming to help families and especially children with illness to have a better life. Their core program included building family room and play areas in children hospitals, besides that RMHC also regularly support students by giving out scholarship all over US.

The firm is committed to protecting future generations by creating policies of recycling, reducing and managing solid waste for their branches. Brochures informing McDonald’s position on topic such as rain forest, packaging andozone depletion were placed in their outlets, showing how the corporations had contributed to save the environment. McDonald is partnering with the Environmental Defense Fund. This step had given the sense of respect out of the company for taking environmental issues seriously. Good publications were made and positioned McDonalds to be among the top recognized brands in the world. Therefore, the partnership with EDF should be continued to manage the eco-friendly image of the restaurant.

Economic:

McDonald is giving contribution to the nations they have their branches in by employing local workers. The firm provides both full and part-time job to help their workers to combine family and education matters in the same time. Staffs would normally get trainings and promotion based on their performances вЂ"over 40% of McDonalds’ managers were started as an hourly-paid staffs in the restaurant (McDonald, 2006). Benefits are also given to motivate their staffs, such as service awards, health insurance and paid holidays.

In 2003, McDonald’s was facing its first loss caused by the cost of closing more than 700 its restaurants. The restaurant chain recorded a net loss of $344m on October-December period, with only $272m of profit the year before. It took $810m charge to