A SWOT analysis of

Mcdonalds Corporation
Philippines

In Partial Fulfillment to the requirements of Engineering Management

AY 2011-2012

Prepared by:
Sangalang, Anne Kristine M.
Dominguez, Juan Paolo
Delfin, Quincy Lou
Dee, Janette
Rapanut, Christian

Brief Overview of the Company

Mcdonalds is one of the leading fast food chains in the world. It started out in 1940,
when two brothers Dick and Mac McDonald Opened the first McDonalds Restaurant in San
Bernardino California. Soon Mcdonalds became famous and in 1953 the brothers began
franchising. The first franchise, by Neil Fox also in California, introduced the Golden Arches
Logo. In 1955, a business man named Ray Kroc, another franchisee, gave birth to the
Mcdonalds Corporation that we know today. He also owns the oldest operating branch of
Mcdonalds in the world. The 60s became a transition period for the company. As a matter of fact
in 1961, he bought the rights of Mcdonalds from the two brothers for only 2.7 Million Dollars.
Then in 1963, as a marketing strategy, the mascot Ronald Mcdonald was introduced to the world.
By the latter part of the 1960s, the first franchise opened outside the United States. It wasnt until
in 1981 that Mcdonalds was introduced to the Philippines by George Yang in Morayta, Manila.
Today over 30,000 branches are operating in more than 100 countries in 6 continents all
over the world. They serve around 46 Billion people everyday and have sold more than a
hundred billion burgers since it opened in 1940. The Mcdonalds Corporation here in the
Philippines has envisioned their company to be the first to respond to the fast changing needs of
the Filipino family. The first choice when it comes to food and dining experience. Their mission
is to serve the Filipino community by providing great-tasting food and the most relevant
customer delight experience.
Analysis
Strengths
Mcdonalds has the worlds most known logo. The Golden Arches is a sight anyone
anywhere in the world could relate to. This is how famous Mcdonalds corporation is. Over
hundreds of thousands of branches of the food chain is currently working today.
Almost all of the stores are a franchise which is why even if it is be globally branded, the
Mcdonalds Corporation here in the country is 100% Filipino owned. They are service oriented
to the extent that they try to appeal to the cultural differences around the globe. For instance,
they serve menus in different languages, offer a few value meals that are uniquely available for
the country only (the Philippines is one of the only countries that serve rice with their meals),
there are also stores that observes a separation of door entrances for males and females (like in
some countries in the middle east).

Being globally branded is not the only strength that the company has. With the ongoing
trend of going green, Mcdonalds launched their own eco-friendly campaigns by minimizing the
use of Styrofoam and plastics by serving their take outs in paper bags and paper containers.
Aside from this, they are also socially responsible. They have their own charities such as the
Ronald Mcdonald House charities, where a few percent of the proceeds from happy meals go to.
This charity financially and emotionally supports families of children who have diseases to keep
these children healthy and happy. This charity also opened the world widen theme/campaign Im
loving it - Love ko to in 2003. Since then, proceeds from any purchases go to the RMHC and to
local charities that the franchises support.
To add to that, they also have superior service quality and has significantly improved it
by adding a 24/7 online delivery system. This is a convenient way for Filipinos all over the
country to have a Mcdonalds meal in just a few clicks. Another good innovation from the
company is to build stalls outside of the restaurant for dessert take outs (usually found inside
malls, or corners of super markets).
Mcdonalds is also a pioneer of a few food items that are now famous and are copied by
competing companies. Such food items are the McFloat, Shake-Shake Fries, Mcflurry and the
ever famous twister fries. They also take their food safety very seriously, which is why many
consumers already provided their trust to the company.
Weaknesses
Every strength yields a weakness. Being a world renowned company where more than
80% is a franchise, its a difficulty for them to create a single theme or to unify their menu list.
The only famous and successful theme that the company created and still has not been followed
was the Love Ko To campaign in 2003. Since then the company has not launched any
successful themes, not even during the Olympic seasons. Other than that, considering the 190
branches all over the country, it must be a difficulty for them to manage all of it at the same time.
With regards to service, there are also weaknesses. There are actually no food items that
could cater to health conscious customers. Unlike their counterparts such as Wendys, KFC,
Chowking, etc that serve salads in their menu list, there is not even any nonhamburger, non
chicken alternatives in the list that Mcdonalds offer. When they released a healthy menu just at
the start of the year (FYI, this is not available in the country), it received very bad reviews. It was
a failed attempt to change a fast food restaurant that serves fat everyday to a fat free company.
However, the company has weaknesses that are similar to all of its competitors. One is
that the actual food served in their restaurant is not even half the size of what is being advertised.

Other than this, vegetables used in their food are not as fresh. Lastly, just like in other
companies, delivery is very slow. Such weaknesses are almost negligible that consumers have
already accepted them.
Opportunities
Most of the opportunities that the company has actually rooted from the fact that it is
widely known all over the world. One example of this is the fact that it is easy for them to tie up
with any business, event or new movie. For almost each famous childrens film every year, they
also change the theme of their happy meals. This is a good opportunity for them to really attract
children consumers.
Aside from that, ever since the introduction of the McFloat, the dessert items of the
company actually increased in demand. The company saw this as an opportunity and opened
their Dessert Take out Booth. And because many Filipinos are very interested small business
keepers, Mcdonalds opened this dessert take out booth as a franchise in the country as well.
Moreover, there had been an increase in the popularity of particular trends such as going
green and eating healthy. Together with the issue of obesity in the US, there is a new
consciousness from consumers today where they demand for healthier options in their meals.
The company saw this as an opportunity to serve healthier meals and they are the first fast food
giant that offer non salads as healthier alternatives. Aside from that, fast food chains in general
has received bad reviews regarding how they take care of the environment. This increases their
potential to open up a 100% eco-friendly campaign.
Lastly, with the fast paced lifestyle of people today, there are higher demands for faster and
cheaper way of eating. This opens up a chance for them to improve their menu list and provide
more nonhamburger and non chicken variety.
Threats
Since this is a fast food company, the health issues that it faces are actually the greatest
threats. Being widely known, the obesity that America is suffering from is blamed on them. The
food that Mcdonalds offer is high in fat, sugar and salt, and low in fibre and vitamins. This
increases the risk of heart disease, cancer and diabetes for the public. Worse of all, the food also
contains a few chemical additives that actually triggers hyperactivity in children. The Philippines
is in a transition today, and lifestyles of Filipinos had been changing rapidly. With the
accessibility and affordability of their products, many people would prefer Mcdonalds than to
waste time, money and effort on home cooked meals. Back in 2004, an American documentary

directly targeted the food that is being offered by McDonalds. It showed the world how
unhealthy fast food really is and how the lifestyle of Americans make consumption of such food
worse. It raised numerous controversial issues. One of such is the fact that the main target market
of the company is children. Its easy for Mcdonalds to tie up with different events or movies.
They use such events and movies as a way of enticing children to buy their meals. Other than
this, the toys served in happy meals, the playpens inside the restaurant, the birthday parties and
the food which are advertised using movies or events (e.g. Shrek Green Apple Float) are used to
aggressively attract children consumers. It received raised eyebrows when the producer of the
film Super Size Me (2004) claimed that they not only serve unhealthy food, they also develop
bad eating habits and bad lifestyles to these children.
Sadly, there had been no improvements in their menu despite these health issues. And
ironically, all those controversies actually increased the companys popularity. Other than these,
there are also threats to the company caused by the rigidity of their menu list. Their competitors
could actually provide more variety, they dont even have promos that could change their menus.
Unlike KFC, for instance, who periodically change their bowl meals that attract consumers.
Conclusion and Recommendation
The company had been in operation for more than 60 years to date. They have distinctly
improved their service and they have continued to satisfy the on going demands of the public.
From starting out as a hotdog stand in the early 1940s to opening up around 30,000 branches all
over the world, the company did improve their product. However, we recommend that they really
improve not only their services but their food as well. They could try to open up to the public
more variety and healthier options. As a fast food giant grossing more than millions of dollars
everyday, it might be a good opportunity for them venture on campaigns in not only helping the
society but also taking care of the environment.
References:
McDonalds

Corporation.

Retrieved

from

http://www.fundinguniverse.com/company-

histories/McDonalds-Corporation-Company-History.html
Brantley,

A.

(2007)

Americas

Fast

food

Giant.

Retrieved

from

http://www.associatedcontent.com/article/306778/fun_facts_about_mcdonalds_pg2.html?cat=16
Miller,

V.

(2008).

Is

Mcdonalds

and

Fast

Food

really

to

blame?

http://naturalbias.com/super-size-me-is-fast-food-really-to-blame/

Retrieved

from