MacDonald’s has a strong global presence with its nearest domestic competitor being only half its size,McDonald’s is the market leader in both the domestic and international markets.MacDonald’s benefitfrom cost reduction through economies of scale because of its enormous size and its huge global presence allows it to diversify risk involved with the economic performance of specificcountries. Ininternational markets, MacDonald’s is well placed to expand and take advantage of long-termeconomic growth. MacDonald’s also has a strong real estate portfolio. The company’s outletsarelocated in areas that are highly known for visibility, traffic volume and ease of access. MacDonald’salso has exceptional brand recognition. This strong brand recognition creates significantopportunitiesfor the company. MacDonald’s is able to generate more sales because of its brand recognition. Throughaggressive market planning, MacDonald’s has been able to recapture its youth market once again.Weaknesses
The food industry is really saturated. As a result of this, MacDonald’s has to deal with the prospect of looming market saturation, which could make it difficult to add new outlets. Themarket is forecast togrow by around 2% per year. There is also an increasing price competition driven by too manycompetitors, which reduces the company’s ability to increase revenue. Nevertheless, theswift of thecompany’s focus from a value menu to a more diverse one has recently limited the negative effect of the intense price competition that was traditionally taking place among the industryleaders. Lack of product innovation is another weakness of McDonalds. The last break-through for McDonald’s was theChicken McNugget in 1983, but again the company’s new strategy seems to havesuccessfully dealtwith the problem through the popularity of its new salads and other new products.
MacDonald’s sold its Donatos Pizzeria back to its founder in 2003 and discontinued Boston...