SWOT ANALYSIS OF MC DONALDS AND BURGER KING

SWOT ANALYSIS OF MCDONALDS: STRENGTH

The business is ranked number one in Fortune Magazines list of most admired food service companies.

One of the world's most recognizable logos (the Golden Arches) and spokes character (Ronald McDonald the clown). According to the Packard Children's Hospital's Center for Healthy Weight children age 3 to 5 were given food in the McDonalds packaging and then given the same food without the packaging, and they preferred the food in the McDonald's packaging every single time.

They are a global company operating more than 23,500 restaurants in 109 countries. By being spread out in different regions, this gives them the ability to weather economic fluctuations which are localized by country. They can also operate effectively in an economic downturn due to the social need to seek out comfort foods.

They successfully and easily adapt their global restaurants to appeal to the cultural differences. For example, they serve lamb burgers in India and in the Middle East; they provide separate entrances for families and single women.

They have an efficient, assembly line style of food preparation. In addition they have a systemization and duplication of all their food prep processes in every restaurant.

McDonalds only serves name brand processed items such as Dannon Yogurt, Kraft Cheese, Nestle Chocolate, Dasani Water, Newman's Own Salad Dressings, Heinz Ketchup, and Minute Maid Juice.

McDonald's takes food safety very seriously. More than 2000 inspections checks are performed at every stage of the food process. McDonalds are required to run through 72 safety protocols every day to ensure the food is maintained in a clean contaminate free environment.

McDonald's was the first restaurant of its type to provide consumers with nutrition information. Nutrition information is printed on all packaging and more recently added to the McDonald's

Internet site. McDonalds offers salads, fruit, roasted chicken, bottled water and other low fat and calorie conscious alternatives.

McDonald's uses only 100% pure USDA inspected beef, no fillers or additives. Additionally the produce is farm fresh. McDonald's serves 100% farm raised chicken no fillers or additives and only grade-A eggs. McDonald's foods are purchased from only certified and inspected suppliers. McDonalds works closely with ranchers, growers and suppliers to ensure food quality and freshness.

WEAKNESS:

Their test marketing for pizza failed to yield a substantial product. Leaving them much less able to compete with fast food pizza chains.

High employee turnover in their restaurants leads to more money being spent on training. They have yet to capitalize on the trend towards organic foods. Large fluctuations in their net and operating profits making impacts on the investors. Not much variation in seasonal products that are offered. Quality concerns due to franchised operations. It uses advertising that mostly targets children. Price competition with the competitors resulting in low revenue. Lack of more innovative products.

OPPORTUNITIES:

In today's health conscious societies the introduction of a healthy hamburger is a great opportunity. They would be the first QSR (Quick Service Restaurant) to have FDA approval on marketing a low fat low calorie hamburger with low calorie combo alternatives. Currently McDonald's and its competition health choice items do not include hamburgers.

Provide optional allergen free food items, such as gluten free and peanut free.

In 2008 the business directed efforts at the breakfast, chicken, beverage and convenience categories. For example, hot specialist coffees not only secure sales, but also mean that restaurants get increasing numbers of customer visits. In 2009 McDonald's saw the full benefits of a venture into beverages.

It can adapt to the needs of the societies and undergo an innovative product line. It can research ways to use green energy and packaging which will work as a part of their promotional effort as well as fulfill their social responsibility.

It can create new product offerings, use mobile text messaging to offer services that appeal to consumers.

It can upscale some of its restaurant settings at luxurious locations to attract more customers. It can slow down the level of expansion in order to increase the profitability of the organization.

THREATS:

They are a benchmark for creating "cradle to grave" marketing. They entice children as young as one year old into their restaurants with special meals, toys, playgrounds and popular movie character tie-ins. Children grow up eating and enjoying McDonalds and then continue into adulthood. They have been criticized by many parent advocate groups for their marketing practices towards children which are seen as marginally ethical.

Any contamination of the food supply, especially e-coli. Major competitors, like Burger King, Starbucks, Taco Bell, Wendy's, KFC and any mid-range sit-down restaurants.

Lawsuits for offering unhealthy foods that have alleged addictive additives. Foreign currency fluctuations are regarded to be a major problem as it uses standard pricing for its food items.

Heavy investments on promotional campaigns which decrease the gaining of market share.

SWOT ANALYSIS OF BURGER KING:

STRENGTH:
Burger King has over 11,500 fast food restaurants located in over 70 countries. 7,207 of its restaurants are located in the United States (62%) and another 4,358 are established in international locations (389%) such as Asia, the Middle East, Africa and Canada. Huge popular brand name and high brand loyalty Burger King is able to boast a brand that is widely recognized thanks to its flagship slogan have it your way, the whopper sandwich and most recently enhanced by its mascot known as the King. The company was recently ranked 7th in brand awareness. Burger King serves a lot of burgers that is typically not available in other fast food restaurant. Product differentiation with large size. Approximately 90% of Burger King Restaurants are owned and operated by independent franchisees, many of them family-owned units that have been in business for decades. The company is able to grow while minimizing large capital expenditure, meanwhile it collects fees and royalties from each franchise added. Growth model not very capital intensive. Strong brand equity in fast food.

WEAKNESS:
Although the company operates in many international venues, the majority of restaurants are in the United States. This concentration of operations in one geographic area increases company's exposure to local factors such as labor strikes and the influence of regulatory changes. There is some indication that Burger King may have been slow to transition to leaner and healthier restaurant fare in favor of pleasing its long term customers who are fans of the big larger portion sandwiches. High fat and high calorie food not good for health conscious people

Franchise management Burger King does not advertise their products like their competitors Lesser international appeal. Heavily concentrated in the US: about 65% of operations

Opportunities:
Burger King is seeking to overhaul its breakfast menu and will add Starbucks Corp.'s Seattle's Best Coffee to all its U.S. restaurants. It has introduced earlier restaurant opening times in its United Kingdom locations Burger King sponsoring its biggest new product launch in years by introducing the Tender crisp, Premium Chicken Burger and accompanying the launch with a marketing campaign called cheat on beef. Burger King is seeking to strengthen its standing in the African American Community through its new next best move promotion which includes a well publicized tour of 41 urban communities across the country Burger King has entered into a licensing arrangement (brokered by Broad Street Licensing Group) to further increase the companys brand awareness and broaden the presence of the iconic "King" character, various licensees of Burger King Corp. will soon launch a line of branded T-shirts, and also an exclusive collection of sleepwear and lounge wear. Keep building its brand through ad campaign, such as the Whopper Virgin's Introduce home delivery Open new branches and outlets. Advertise more. Product improvement, tailoring it as per tastes of people around the world.

THREATS:
Burger Kings new dollar cheese burger initiative and loss leader strategy has upset some of its franchise owners who feel the pricing violates the franchise agreement. The dispute spurred the National Franchisee Association to file a lawsuit against the company. In 2009 Franchisees voted twice against the new promotions. The company reportedly has dropped the $1 burger promotion, but there may be bad feelings lingering for a while. Burger King's same-store sales in the U.S. and Canada declined 4.6% in the three months ended Sept. 30, 2009. People 18 to 34 cut their consumption of fast-food meals from November 2006 to November 2009 according to the market-research firm NPD Group. The combination of the economy and better health information has influenced people to eat at home and to opt for leaner lower calorie foods. Away-from home consumption declines in the US due to tougher consumer environment. Increasing labor costs putting pressure on bottom line margins Threat from other eating joints/restaurants. Health concerns among general public. Food costs are rising higher than standard inflation. Competition from KFC, Pizza Hut, Dominoes, McDonald's , Subway , Smokin Joes ,Taco Bell ,Papa John's Pizza