McDonald's Corporation - Swot Analysis

McDonald's Corporation - SWOT Analysis

Strengths

1. Strong brand value

* McDonalds brand valued at $31,049 million in 2009

* Placed 6th in a ranking of top 100 global brands

o Burger King ranked 79th

2. Diversified geographic presence

* 32,478 restaurants

* In 117 countries

3. Market capitalization

* McDonalds - $59.8 billion

* Yum! Brands, Inc. - $16.3 billion

* Burger King - $2.46 billion

Weaknesses

1. Negative brand association

* Consumer Reports survey revealed that 49% of consumers surveyed considered McDonalds food extremely unhealthy

2. Limited menu options

* Majority of menu centered around burgers and sandwiches

* Yum! Brands, Inc. restaurants offer burgers, pizza, fried chicken, and seafood.

3. Below average income margin for company owned stores

* Income margin at 19% compared to 32% industry average

Opportunities

1. Growth of sales of low cost items

o 2009 sales increased by 3.9% compared to industry wide increase of 0.7%

2. Growth of franchisee operated restaurants

o McDonalds franchised restaurants produce a profit margin of 82% compared to a profit margin of only 19% for their company owned restaurants.

3. Access to merging markets

o Only 11.2 % of revenues earned in APMEA (Asia Pacific/Middle East/Asia)

o 2009 revenues increased by 5.2 % in APMEA compared to an increase of only 2.6% in the U.S.

Threats

1. Health conscious consumers

* In 2010, Obama administration passed a law requiring menu nutrition labeling

2. Foreign currency exchange rates

* 70% of the companies operating income is outside the U.S.

* 45% of its debt is denominated in foreign currencies

3. Economic