Marketing Analysis of McDonalds Australia Holdings - Case Study Example

MARKETING REPORT Name: Institution affiliated: Date of submission: Tutor: Executive Summary McDonald’s corporation is the world largest fast food chain as it serves around 68 million customers around the world daily. Currently, McDonald’s corporation operates around 35,000 outlets in the 119 countries that it already exists in. The study seeks to analyse the Strengths, weaknesses, threats and opportunities facing McDonald’s corporation through the SWOT analysis and how each of the variable factors can be improved on to ensure that the performance of the company across all its outlets is improved on. The study focuses mainly on the McDonald’s Australia holdings based in Australia. It is a subsidiary of McDonald’s Corporation. Understanding the strengths, weaknesses, opportunities and threats that it faces through the SWOT analysis will enhance the performance of McDonald’s Australia Holdings and for the company as a whole. Introduction and background to the company McDonald’s Australia Holdings is one of the oldest companies that are in the food and restaurant industry. The company was founded in 1971. McDonald’s Australia Holdings has its headquarters in Sydney in New South Wales Australia. However, McDonald’s Australia Holdings still has additional offices in Adelaide, Brisbane, Collingwood, and Ascot WA. Furthermore, McDonald’s Australia Holdings operates as a subsidiary of McDonald's Corporation. The company usually operates and franchises restaurants. Among the dishes served in the company include breakfasts, smoothies, dinner, value picks, sides and salads, desserts and drinks. Comparing the years ended 2012 and 2013; McDonald’s Australia Holdings have been recording improvements in performance from the revenues earned, to the operating income, net income, total assets and total equity. With such improvements in the company’s performance, it means that there are factors that the company has lately been putting into consideration towards enhancing the performance. SWOT table Strengths Weaknesses Wide range of products: McDonald’s Australia Holdings provides its consumers with a wide range of products and services for fast foods such as value picks, sides and salads, desserts and drinks High labour costs: McDonald’s Australia Holdings has been spending a substantial size of their earning to pay their workers. Australia is one of the countries that possess the greatest manpower and skills thus making the cost of labour to be high [Anj09]. Many years of experience: McDonald’s Australia Holdings was founded in 1971 and has grown over the years to the state that it is in today. The many years that it has been in operation have made both the employees and managers to gather enough experience to manage the company’s operations [MdR13]. Poor distribution channels: McDonald’s Australia Holdings only uses the available retail stores to distribute its products. This poses weaknesses as other competitors who use other means of distribution increase their market size through this means. Improved consumer service: McDonald’s Australia Holdings have launched a digital program to serve customers and obtain their feedback and have expanded the personal shopping program online. Lack of platform customers to provide their feedback. McDonald’s Australia Holdings has not been keen to provide a platform for consumers to air their dissatisfactions. Unique and quality products: The wide variety of products by McDonald’s Australia Holdings makes the corporation unique as it is hard to find many varieties of products in the same store [Bes09]. Poor employee training activities. McDonald’s Australia Holdings does not promote employee training activities thus the quality of services offered by the employees do not meet the high expected standards. Loyalty programs: McDonald’s Australia Holdings has created a platform to promote swift communications between the company and the consumers of the products. It enhances growth of products and promotes customer loyalty Opportunities Threats Product development: The products that McDonald’s Australia Holdings provides for the consumers could be improved upon to improve the quality of products that they offer. They could also develop new products to complement the already existing products to improve on the corporation’s performance. Lack of innovation: David Jones is a major rival of McDonald’s Australia Holdings. It has improved its operations since they have promoted innovation activities in their departmental stores. McDonald’s Australia Holdings has been reluctant to promote innovation in their products and markets. Market development: Most of McDonald’s Australia Holdings stores only operate in New South Wales and Queensland leaving the other cities without the corporation’s activities. Market development could be a vital opportunity for the corporation as it could help the corporation create new store in the northern and western territory of Australia. Competition: McDonald’s Australia Holdings has increasingly been facing competition from stores within Australia like KFC and Starbucks corporation. It is a major threat as their market size has been decreasing as they share the splits with the other competitors [DrT10]. Consumer wants: listening to the consumers’ requirements and wants could help improve the corporation’s performance and, as a result, lead to the increase of sales and sales revenue [Bes09]. Regulations by the authorities: Government tariffs and other related regulations are a threat to McDonald’s Australia Holdings as they continuously record lower profits after tax where the tariffs are increased towards the products. Optimizing the stores network: McDonald’s Australia Holdings managers should plan and ensure that the actions that they take towards improving on the corporation’s performance are profitable to the corporation both in the long term and short term [Bes09]. Technology: technology changes on a daily basis and maintain the most advanced technology could be expensive to the consumers, and thus the technology possessed by McDonald’s Australia Holdings could make it not provide the best quality products to the consumers Research and development: McDonald’s Australia Holdings should encourage research and development to ensure that the goods that they offer to the market are of the best quality and that they are better than those of the competitor companies. Presence of online company retailers: McDonald’s Australia Holdings operations are mostly on the ground. The presence of online operators with the same products as those of McDonald’s Australia Holdings has been a threat to the corporation’s performance as such operators command a great size of market size in the Australian economy. Findings: Explanation of the SWOT table Findings from the SWOT table have shown that it is possible for McDonald’s Australia Holdings to improve its performance using the managerial means provided by the analysis. The table has shown that it is possible for the company to turn its strengths to opportunities, weaknesses to strengths and opportunities and reduce their threats that they receive from the external environment. The strengths and weaknesses are the usually the internal environment of the business that have any significant impact on the business while the threats and opportunities are usually the external environment which also have effects in the organization [Nad09]. The many years of experience for McDonald’s Australia Holdings have allowed them to create a wide range of products. Similarly, the company is able to provide unique and quality products to their customers. McDonald’s Australia Holdings has achieved this through promotion of innovation through research and development within the different stores that the organization operates. Continuous improvements should be ensured in the sales and after sale services that are provided by McDonald’s Australia Holdings in their daily activities. Improved consumer service among other strengths that the company enjoys will aid them to enhance their financial performance through growth. When McDonald’s Australia Holdings is able to perform better than the competitor companies, they can increase their market share through the proper utilization of their strengths and thus grow financially and geographically. The table also identifies major weaknesses and threats that the company faces that undermine their performance. Through proper management, the organization should ensure that they continuously work on the threats and weaknesses of the company towards eradicating them totally and ensure minimal threats and weaknesses from both the internal and external environment [MdR13]. Recommendations McDonald’s Australia Holdings proposes to increase their outlets to different countries. McDonald’s has plans to open up new outlets in India over the next three to five years. The move was triggered when the Hardcastle restaurants announced the launch of the first McCafe restaurant in one of McDonald’s outlets in Mumbai in 2013. The Cafe started functioning almost immediately after it was launched in October 2013. McDonald’s have also proposed the launch of a new range of clubhouse sandwiches. The company has proposed to start with the new product for a limited period of time before they can determine the continuation of production of the product in the future depending on the performance. McDonald’s Australia holdings have also been keen to respond to the different unique preferences that the loyal customers pose to them. The consumers are usually looking for premium options of services that the restaurants render and they opt for the best services. The organization with the best combination of customer preferences for both products and services usually enjoy the highest consumer loyalty. The new proposed clubhouse range of products targets the consumers whose preferences are for the juicy tastes of the products and the quality of the sources. The welfare of the customers should be considered as they determine the performance of the organization. McDonald’s Australia Holdings should, therefore, ensure they offer quality goods to consumers and later on offer after sale services to ensure consumer satisfaction is achieved. The pricing and quality of products mainly interests the customers. Utility consumers would want to have the best quality products at the lowest possible prices. How the Clubhouse sandwiches fits with the SWOT analysis The best part about the new product is that it has not been in the market before. None of the competitors have tried to produce this product into any of their markets before. The move by McDonald’s Australia Holdings is a form of diversification as they try to bring in a new product into a totally new market. it may be a risky move but if it will be successful, the move will be an opportunity by the company utilized. The success of the product will thus improve the performance of the organization as well increasing the loyalty of the existing customers. The end result is that the product will also encourage new customers into the organization thus increasing their market base. REFERENCES Anj09: , (Anja, 2009), MdR13: , (Hassan, 2013), Bes09: , (Bessant & Tidd, 2009), DrT10: , (Nguyaen, 2010), Nad09: , (Nadine & Anne, 2009), Read More