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MRKT_researchPaper - MRKT 5210 McDonalds Corporation SWOT...

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MRKT 5210
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McDonald’s Corporation SWOT Analysis Strengths Massive global presence: McDonald’s is dominant in its domestic and international markets. It is considered more than half the size of its domestic competitor. It is one of the largest leading food service retailer with more than 30,000 restaurants within 119 countries offering service to 47 million customers each day around the world. Its huge size allows it many benefits such as cost reduction and its massive global presence means it is not too dependent on any one geographic area. Strong real estate portfolio: McDonald’s established a strong real estate early in the history. They rank high for visibility, traffic volume and ease of access. Exceptional brand recognition: McDonald’s massive global presence and strong real estate portfolio gives it the opportunity to have an exceptional strong brand recognition. McDonald’s is ranked as one of the ten most recognized brands in the world mentioned in business week magazine, which creates a significant opportunities for the company. McDonald’s has the potential to turn its brand recognition into sales. McDonalds benefits from a huge marketing budget. They launch a new campaign based around the slogan “I’m lovin it”. They cooperate with pop superstar Justin Timberlake, Hip Hop group The Neptunes, NBA superstar Yao Ming and
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Skateboarder Tony Hawk MacDonalds to relate themselves with a very important culture, the youth market. Weaknesses: Market saturation: McDonalds faces the prospect of threatening market saturation, with its own size and being dominant in its market, that could be leading to fewer and fewer opportunities to add new outlets in the future. The solution for this problem would be if the domestic market were to grow rapidly, but in fact the market is forecast to grow by 2% per year. Increasing price competition: The proliferation of competitors and the domestic market is also increasingly price competitive. Therefore, it reduces the company’s ability to increase revenue while rising prices for food and labor. Lack of product innovation: As becoming the market’s leading innovator, McDonald’s last break-through product launch was the Chicken McNugget in 1983.
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Rising food and labor costs: Rising food and labor costs combined with McDonald’s low prices, similar to its largest competitors, and the increases in minimum wage has reduced its margins in the US to a five-year low. Opportunities Alliance with Warner Home Video: “In June 2004 McDonald’s and Warner Home Video (WHV) announced a long- term distribution deal for a new live-action video series featuring high-energy interactive adventures of Ronald McDonald & Friends with kids from around the world. The videos will be produced in many languages and distributed by WHV in traditional video retail outlets around the world. Ronald McDonald is a well- recognized character and the McDonald’s mascot. A popular live-action series featuring Ronald McDonald will help further McDonald’s popularity, especially
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MRKT_researchPaper - MRKT 5210 McDonalds Corporation SWOT...

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