5. SWOT analysis
PEST analysis method refers to the analysis of the macro environment of enterprise development. When analysing macro-environmental factors, the four major external environmental factors that affect enterprises should be analysed including politics, economy, society, and technology. Only after having a deep understanding of the external environment of the enterprise can managers formulate sensible strategies of Australian McDonald’s (Kadlubek, 2016).
- Political and legal environment
The political environment guides the direction of corporate marketing activities. Whether the country’s political situation is stable or not will have a significant impact on corporate marketing activities. It will bring a good environment for enterprise marketing. Australia’s political environment is stable, the government has a loan policy for chain stores, and trade barriers have also been weakened. It is a policy support which will bring a good environment for corporate marketing (Benjamin and Gerry, 2020). Australia stimulates consumption growth by lowering interest rates, encourages consumption, and strives to expand domestic demand, which is also beneficial to McDonald’s marketing to a certain extent.
- Economic Environment
Economic growth in Australia remains sluggish, with inflation below the long-term average and low employment and wage growth. Our analysis predicts that the RBA (Reserve Bank of Australia) and the government will continue to promote economic stimulus policies and maintain the existing low interest rate (1.5%) in the short term, and even cut interest rates further when the economy slows down (McLean, 2013). Affected by the epidemic, the Australian catering industry has been severely affected by an unprecedented situation. Losses, store closures, and layoffs are becoming common phenomena in the catering industry. The restaurant industry is going through a major reshuffle. Compared with ordinary restaurants, franchisees show good pressure resistance. Because there is a strong brand and franchise system behind it. Therefore, the vitality and stability of franchisees are much better than those of small and micro enterprises that start their own businesses independently. In this epidemic, the entire catering service industry has been hit hard, but with the support of the headquarters, many franchise companies have made rapid adjustments and gradually resumed their daily operations to provide customers with good and stable services.
- Social environment
Australia’s population is mainly concentrated in the southeast, where several major cities in Australia are located. Australia’s population is growing, but mainly from foreign immigrants, especially from Asian countries (Tom et al, 2021). The reason for this is the growth of long-term net overseas migration, baby booms and relatively healthy fertility rates. Factors such as the rapid development of urbanization have provided McDonald’s with a huge consumer base. However, in the context of the aging population structure in many developed countries, the aging population of Australia is bound to affect McDonald’s market segment. People tend to consume non-toxic, harmless, and green products. McDonald’s has begun to focus on green and healthy food. At the same time, people are now paying more attention to environmental protection, eliminating white pollution, and promoting environmental protection.
- Science and technology environment
The Commonwealth of Australia rose from a British colony to a world power, and its prosperity and progress were largely driven by technology. In contemporary times, with the rapid development of the information revolution, the Australian government has become increasingly aware of the value of technological innovation. To maintain the country’s scientific and technological advantages, the Australian government has established a national strategy of science and technology and issued a series of policies and measures to accelerate the development of science and technology (Alan et al, 2021). With the rapid development of modern technology, productivity has been continuously improved. The cycle for scientific inventions and new technologies to be applied to new products is greatly shortened. Product upgrading is accelerated, which promotes the continuous development of new products by McDonald’s.
An effective strategy comes from the perfect combination of a company’s internal resources (strengths and weaknesses) and the external environment (opportunities and threats). An effective combination maximizes a company’s strengths and opportunities and minimizes weaknesses and threats. When implemented precisely, this assumption can provide a strong basis for the successful realization of strategic design. The environmental and industry analysis provides the information needed to identify opportunities and threats in McDonald’s environment, which are the primary focus of SWOT analysis (Boonyarat et al, 2019).
McDonald’s, as a multinational chain enterprise, has established a global, extensive, and flexible production supply chain through its own expansion. Thanks to this efficient and flexible loop, McDonald’s can not only provide users with a real value-for-money platform for a long time, so that the price increase of its Australian restaurants has always been lower than inflation for many years. And in the current crisis brought about by the epidemic, it can continue to provide Users provide preferential activities and preferential mechanisms. In fact, the reason why McDonald’s can become a giant in the fast-food industry is due to its deep understanding of the supply chain. McDonald’s is a company that understands that the essence of business is to turn high cost and low efficiency into low cost and high efficiency. In this process, all technologies and means that can achieve this goal are being applied. In the early stage of development, McDonald’s will collect store sales information, estimate the number of subsequent purchases, and it back to suppliers to reduce unnecessary waste. For a long time, McDonald’s view of the supply chain is a long-term, symbiotic ecological perspective. In its attitude towards suppliers and partners, it also upholds the concept of seeking common development and sharing risks. The value-for-money leadership that McDonald’s has always advocated is its ability to control the supply chain and its ability to view world development and business development with supply chain management (Maze, 2017).
- Weakness （W）
While McDonald’s management and board have made some strategic and operational mistakes, no one is denying that the company needs to change. Plus, McDonald’s board doesn’t need outside activist investors to drive the changes the company needs. According to financial data, McDonald’s strategy, execution, leadership, etc. have gone wrong, not an industry downturn. In short, McDonald’s is stumped by the paradox of brand recognition as a product of average quality, and confusing information has exacerbated the decline of the brand image. McDonald’s currently has five major dilemmas including food quality, food safety, pricing policy, standardization vs customization and supply chain management. In order to save the performance loss caused by brand image, product quality and positioning and operational problems, McDonald’s has also tried some expedients Strategies such as increasing the number of car shuttle windows (which contribute 70% of its turnover) and launching the current spooky Pay it with Lovin-themed ad, but all of this fails to address food quality, operations and image deep-seated issues which related to CSR in Australia (Lee and Lambert, 2017).
- Opportunity (O)
In McDonald’s Australia, whether Quick Serve, Service Restaurant or Cafe, the general labour cost accounts for more than 30%. The lack of people has boosted the rapid popularization of self-service ordering and online ordering. Especially in the second half of 2021, even FSR high-end restaurants featuring high-quality service have begun to introduce desktop tablet ordering and QR code self-ordering. Among Taptouch’s customers, restaurants that deploy QR-Table 3.0 not only overcome the dilemma of lack of staff, but also greatly save labour costs. Without reducing service quality, most restaurants can save more than 30% of the front office as the manpower (Arsalan and Latif, 2021). When materials are adjusted, products should also be adjusted accordingly, including the concentration of prices and dishes, to improve operational efficiency. The emergence of E-Menu makes the adjustment of prices and products more real-time and simpler. Banquet, Combo, and Time-Based Menu also give stores more flexibility and choices, provide packages at different times, match different scenarios, expand single product sales, and improve operational efficiency. If McDonald’s Australia can solve the problem of manpower shortage and increase by introducing new technologies and adjusting the operating model, improve the efficiency of operations, manage the risk of short-term fluctuations in passenger flow, seize the opportunity to expand against the trend, and develop new bases, it will be a rare opportunity for the growth of the catering industry.
- Threat （T）
Due to manpower gaps, Lock Down and logistics delays, there has been a general rise in raw materials and short-term shortages of some products. How to efficiently serve the catering industry is also a challenge faced by McDonald’s Australia. With the changes in industry trends and consumer dining habits, cost-leadership meal packages are becoming more and more popular. The constant changes in consumer consumption concepts make restaurant operators need to constantly change their restaurant business models. From 2020 to now, COVID- The 19 epidemics has limited the industry revenue and the industry’s profit margin will recover due to the COVID-19 outbreak. greater impact. It is estimated that there is a shortage of about 100,000 employees in the entire catering industry. At the same time, it has caused an irrational increase in salary. Even if the impact of Omicron is relatively small, the crisis of personnel shortage will continue until 2024. This is also the biggest difficulty facing the operator of McDonald’s Australia. Consumers are increasingly aware of health issues related to poor diet and obesity with the increased health awareness has given restaurants the opportunity to generate higher revenue by serving healthy meals. As concerns over obesity and diabetes continue to grow, demand is shifting from high-fat, fried, oversized meals to healthier dietary options that will be the threat of McDonald’s Australia (Anaf et al, 2018).
|A brand equity advantage and good reputation
|McDonald’s lacks an emergency response system and improper emergency measures have caused many negative impacts.
|The company’s outlets in non-traditional locations have achieved great success.
|the market growth rate of fast food itself is in a period of slow growth
|high-quality service and good dining environment
|Compared with other industries; McDonald’s has a weak ability to resist risks.
|The company’s regional cooperative groups and local franchise organizations have the strongest marketing capabilities in the industry.
|the loyalty of non-children’s market to McDonald’s is decreasing
|good public image
|The management system of McDonald’s is not in harmony with its development strategy, and the rapid expansion leads to management faults.
|the vigorous competition of competitors|
|advanced corporate culture
|It is becoming more and more difficult to find a site for new sales outlets
|localized business philosophy and standardized production
|the international economy, and COVID-19 are affected by the global economic crisis
|complete training system|
|unique profit model
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