SWOT Matrix Strengths Weaknesses 1. Veryeffective and well- 1. Lowest Customer satisfaction known advertising. rating in the industry. 2. Robust employee training. 2. Core product line out of sync 3. Strongest Brand Image. with healthy lifestyle trends. 4. Recognized as a community 3. High employee turnover in oriented,socially responsible. their restaurants. Internal Factors 5. Strong Global Presence 6. Use pure ingredients and take 4. 80% of restaurants are franchise owned. food safety and hygiene very 5. Assembly line approach makes seriously. it difficult and costly to adapt 7. Constantly solid financial 6. Over-saturation of real estate performance. in the US. 8. Strong innovation and 7. Foreign currency revenue and product development. debt. 9. Economies of Scale 8. Struggles with fluctuations in operating and net profits. Opportunities Threats 1. High Potential Growth in 1. More health conscious Quick Service Restaurant customers. industry. 2. Food contamination could 2. Inclusion of Low fat, low damage sales, reputation, etc. calorie, healthy hamburgers. 3. Negative public opinion 3. Diversify portfolio campaigns External Factors 4. Breakfast still not available at 25% of locations. 4. Brand equity at risk. 5. Markets in US and EU are 5. Emergence of Healthier mature and saturated. lifestyle trends. 6. Global economic recession 6. Potential for joint ventures 7. Competitors expanding into with retailers. developing markets. 7. International expansion into 8. Intense price pressure from emerging markets. competitors. 8. Increased beverage options. 9. Focus on corporate social responsibility, sustainability.SPACE Matrix:1. A set of variables is selected to define Financial Strength, Competitive Advantage, Environment Stability, and Industry Strength.
2. A numerical value is assigned to each variable ranging from +1 (worst) to +5 (best) that make up the FS and IS dimensions. Similarly, a numerical value ranging from –1 (best) to –6 (worst) is assigned to each of the variables that make up the ES and CA dimensions.3. Then, average score is computed by summing the values given to the variables of each dimension and dividing the number of variables included in the respective dimension.4. Adding the two scores on the x-axis and plotting the resultant point on X-Axis and similarly for the Y-Axis gives thexy-point.5. A directional vector from the origin of the SPACE Matrix through the new intersection point tells the type of strategies recommended for the organization: aggressive, competitive, defensive, or conservative.Financial Rating Environment RatingStrength StabilityReturn on Investment 4 Inflation -3Debt 4 Demand -3Net Income 6 Competitive Pressure -3EPS 5 Barriers to entry -3Cash Flow 5 Business Risk -2Average 4.8 Average -2.8Y-Axis: 4.8-2.8= 2.0Competitive Rating Industry Strength RatingAdvantageMarket Share -1 Growth potential 5Product Quality -1 Financial Stability 5Customer Loyalty -1 Ease of Entry 4Control Over Others -2 Profit Potential 4 Demand Variability 3Average -1.25 Average 4.2X-Axis: -1.25+4.2= 2.95X axisIndustry Strength +4.20 (+1 worst to +5 best)Competitive Advantage -1.25 (-1 best to -5 worst)X-Axis: -1.25+4.2= 2.95Y axis
Financial Strength +4.80 (+1 worst to +5 best)Environment Stability -2.80 (-1 best to -5 worst)Y-Axis: 4.8-2.8= 2.0 F (2.95, 2.00) __ __ Conservative __ __ Aggressive __ __ __ __ __ __ __ __C I __ __ __ __ __ __ __ __ Defensive __ __ Competitive __ __ SBCG MatrixDivisions Revenues Profits(OI) Market Share % Industry Position Growth RateUnited States $8,078,300 $3,059,700 1 weakEurope 9,922,900 2,608,000 1 weakAPMEA 4,230,800 818,800 1 goodOther Countries & 1,290,400 (43,600) 1 goodCorporateTotal $23,522,400 $6,442,900 1Looking at Exhibit 8, Mcdonald’s out powers its rivals in revenues, market cap, number ofemployees by a large margin. Hence, in relative market share, it certainly is on the higherside.As the industry growth also lies in medium to high range for this category, thus we canconclude that according to the BCG Matrix, McDonald’s fall in the stars category.