Pestel Analysis - Assignment PDF

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McDonald’sPESTEL/PESTLE Analysis &RecommendationsMcDonald’s Corporation’s strategies address issues in its external environment, such as the ones identified in this PESTEL/PESTLE analysis of the global fast food restaurant chain business. The PESTEL/PESTLE analysis model supports strategic m...

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McDonal d’ sPESTEL/ PESTLEAnal ysi s&Recommendat i ons Mc Donal d’ sCor por at i on’ sst r at egi esaddr essi ss uesi ni t sex t er nalenvi r onment ,s uc h as t he ones i dent i fi ed i nt hi s PESTEL/ PESTLE anal y s i s oft he gl obalf astf ood r es t aur antc hai nbusi ness .ThePESTEL/ PESTLE anal y s i smodels uppor t sst r at egi c managementbyi dent i f yi ngt heex t er nalf act or st hatpr esentoppor t uni t i esort hr eat s, bas ed on t he r emot e ormacr oenvi r onmentoft he bus i nes s,per t ai ni ng t ot he pol i t i c al ,economi c ,soc i ocul t ur al ,t echnol ogi c al ,l egal ,and ecol ogi c alf act or s( t he PESTLEf act or s) .I nt hecont extoft hi sbus i nessanal y s i s ,McDonal d’ sempl oy sas et ofs t r at egi esf ormaxi mi z i ngt hebenefi t sofoppor t uni t i esi ni t si ndus t r yenvi r onment . Thesest r at egi esar ei nt endedt oaddr es st heex t er nalf act or si nt heor gani z at i on’ s s, envi r onment , al ong wi t h compet i t i v e r i v al r y i nvol v i ng fi r ms l i k eWendy’ Subway ,Bur gerKi ng,andDunki n’Donut s,aswel lasSt ar bucksCoffeeCompany. Ast hebi ggestf astf oodr es t aur antchai ni nt hewor l d,McDonal d’ sus esi t ss t r engt hs t oadaptt oc hangesi ni t sbusi nessenvi r onment ,suchast het r endsshowni nt hi s PESTEL/ PESTLEanal y si s .Suchadapt at i oni sess ent i alt ot hel ongt er m sur vi v aland gr owt hoft hebusi ness ,espec i al l yami daggr es si v ec ompet i t i on. Thr ough a PESTEL/ PESTLE anal y s i s ofMcDonal d’ s Cor por at i on,management dec i s i onscanf ocusont hemostsi gni fic antt r endst hati nfluencet hef oodser vi c e bus i ness and i t si ndust r y . These t r ends ar e among t he defi ni ng f act or s of dev el opment si nt he gl obalf ood and bev er age mar k et ,whi ch i s al s o undert he t er ’ s Fi v e For ces i nfluenc e oft he s t r ong f or c e ofc ompet i t i on s hown i nt hePor anal y si sofMcDonal d’ sCor por at i on.I nt hi sr egar d,i nunder s t andi ngt hecompet i t i v e l andsc ape and t he ext er nalf act or sand t r endsi dent i fied i nt hi sPESTEL/ PESTLE anal y si s ,t he company’ s managementcan dev el op st r at egi es appr opr i at et ot he condi t i onsoft hebusi nessenvi r onment .

Pol i t i cal Fact or sAffect i ngMcDonal d’ sBusi ness Thi sas pectoft hePESTEL/ PESTLE anal y s i sr ef er st ot heeffect sofgov er nment al act i onsandpol i c i esont her emot eormacr oenvi r onmentofMc Donal d’ sbus i nes s andt heeconomyasawhol e.Gov er nment ali nt er v ent i oncandet er mi net her at eand pat h ofbusi nessdevel opment .I n McDonal d’ scas e,t he mos tsi gni fi cantpol i t i cal ext er nal f act or si nt hef astf oodr est aur antc hai ni ndust r yenvi r onmentar easf ol l ows : 1. 2. 3.

I nc r eas i ngi nt er nat i onalt r adeagr eement s( oppor t uni t y) Gov er nment algui del i nesf ordi etandheal t h( t hr eatandoppor t uni t y ) Ev ol v i ngpubl i cheal t hpol i c i es( t hr eatandoppor t uni t y )

Mc Donal d’ sCor por at i on hast he oppor t uni t yt o expand i t smul t i nat i onalbus i ness bas edoni mpr ov edi nt er nat i onal t r ade,whi chcanenhancegl obal suppl yc hai ns .Thi s PESTEL/ PESTLEanal y s i sal s oi dent i fi esgov er nment algui del i nesf ordi etandheal t h asat hr eatandanoppor t uni t yf ort her est aur antc hai nbusi ness .Forex ampl e,t hi s pol i t i c alex t er nal f act ori sat hr eatbecaus ei tput spr ess ur eonMc Donal d’ s,whi c hhas been t he subj ectofcr i t i ci s mr egar di ng t he effect sofi t spr oduct son cons umer s ’ heal t h.Nonet hel es s,t hi s same ex t er nalf act orcr eat es an oppor t uni t yf or t he Donal d’ sgener i c company t oi mpr ov ei t spr oduct s .Cor r es pondi ng changesi nMc anaddr esst hi sex t er nalf act or . compet i t i v es t r at egyandi nt ensi v egr owt hst r at egi esc

I nr el at i on,gov er nment shav eev ol v i ngpubl i cheal t hpol i ci es,whi chpr esentat hr eat and an oppor t uni t yf ort he r est aur antchai n busi ness .Fori nst ance,t hi sext er nal f act ort hr eat ens t he company t hr ough pol i c i es t hatc hange publ i cs chool s ’f ood pr ogr ams f orst udent s .St i l l ,t he busi ness can i mpr ov et hr ough adj ust ment st o Donal d’ s mar k et i ng mi x or pr ovi de mor e heal t hf ul opt i ons t o c onsumer s .Mc 4Pal r eadyi ncl udesheal t hf ulopt i ons ,suchass al ads,butt hecompanycanaddmor e t oi mpr ov ei t sst at usi naddr essi ngt hi spol i t i calex t er nalf act or .Thi saspectoft he PESTEL/ PESTLE anal y s i sofMcDonal d’ sCor por at i ons howst hatpol i t i c alext er nal f act or spr esentoppor t uni t i esdes pi t et hr eat sagai ns tt hebusi ness .

Economi cFact or sI mpor t antt oMcDonal d’ sCor por at i on Thi saspectoft he PESTEL/ PESTLE anal y si sper t ai nst ot he effect sofeconomi c condi t i onsandt r endsont her emot eormacr oenvi r onmentofMcDonal d’ s .Economi c c hangesdi r ect l yandi ndi r ect l yi nfluencebusi nessper f or mance.Thegl obaleconomy , r egi onal economi es, and l ocal economi es i nfluence McDonal d’ s i ndust r y envi r onmentt hr ought hef ol l owi ngeconomi cext er nal f act or s: 1. 2. 3.

Sl owbutst abl egr owt hofdev el opedcount r i es( oppor t uni t y ) Sl owdownoft heChi nes eeconomy( t hr eat ) Rapi dgr owt hofdev el opi ngcount r i es( oppor t uni t y )

Thesl ow butst abl eeconomi cgr owt hofdev el opedcount r i esi sanoppor t uni t yf or Mc Donal d’ st ogr ow andi nc r easet hes t abi l i t yofi t sr es t aur antc hai nbus i nes s.The U. S.mar k etr emai nst he bi ggestcont r i but ort ot he company’ sr ev enues,butt he bus i nessal s obenefi t sf r om t hest abl er ecov er yandgr owt hofEur opeanmar k et s.On t heot herhand,t hes l owdownoft heChi nes eeconomyi sconsi der edat hr eati nt hi s PESTEL/ PESTLE anal y si s .Thi s ex t er nalf act ori sa s t r at egi ci ss ue becaus et he Chi nesemar k eti sa maj orcont r i but ort oMcDonal d’ sr ev enues .Nonet hel ess ,t he companyhast heoppor t uni t yt ogr ow t hr oughex pansi oni nhi ghgr owt hdev el opi ng mar k et s,such as i n Asi a.I nt hi s as pectoft he PESTEL/ PESTLE anal y si s of Mc Donal d’ s ,economi cext er nalf act or s mai nl y pr ov i de oppor t uni t i es f orbusi ness gr owt h.

Soci al / Soci ocul t ur alFact or sI nfluenci ngMc Donal d’ sBusi nessEnvi r onment Thi saspectoft he PESTEL/ PESTLE anal y si sr ef er st ot he soc i alcondi t i ons t hat s uppor torl i mi tMc Donal d’ sbus i ness .Soci alt r endsi nfl uenceconsumerbehavi or s and,i nt ur n,affectt he r emot eormacr oenvi r onmentoft hebus i nes si nt er msof r ev enues .I nt hi scaseofMcDonal d’ sCor por at i on,t hemosts i gni fi cantsoci oc ul t ur al ext er nal f act or sar easf ol l ows : 1. 2. 3. 4.

Ri s i ngdi s pos abl ei ncomes( oppor t uni t y ) Bus yl i f es t yl esi nur banenv i r onment s( oppor t uni t y ) I nc r eas i ngc ul t ur al di v er s i t y( t hr eatandoppor t uni t y ) Heal t hyl i f es t y l et r end( t hr eat&oppor t uni t y)

Based on t he ex t er nalf act orofr i s i ng di sposabl ei ncomes ,Mc Donal d’ s has t he oppor t uni t yt ogr ow bas edont hei ncr eas i ngt endenc yofc onsumer st obuyf astf ood

i nst eadofc ooki ngathome.Thi st endenc yi sal s ol i nk edt obus yl i f est y l esi nur ban envi r onment s. These l i f est yl es i ncr ease consumer s ’l i k el i hood of di ni ng i n r es t aur ant sl i k eMcDonal d’ si nst eadofcooki ngf oodathome.Ont heot herhand,t he i ncr easi ngc ul t ur aldi v er si t yi sper c ei v edat hr eatandanoppor t uni t yi nt hec ont ex tof t hi sPESTEL/ PESTLEanal y si s .Forex ampl e,t hi ssoci ocul t ur alext er nalf act orc r eat es adi v er sesetofconsumerpr ef er encesbasedonv ar i ousl ocalandr egi onalmar k et s t hatMc Donal d’ smustaccountf ori npr oductdev el opment .I nabi l i t yt odo socan r educet hec ompanypr ofit s.Thef as tf oodbusi nesshast heoppor t uni t yt oi nc r ease i t sflexi bi l i t yi npr oductdes i gnt os at i s f yc onsumer s ’pr ef er encesi ndi ffer entmar k et s ar ound t he wor l d.Fur t her mor e,t he heal t hy l i f est y l es t r end i sat hr eatagai nst Mc Donal d’ s ,basedoncr i t i ci smsaboutt headv er s eheal t heffect sofmanyoft he company’ spr oduct s.Thec ompanyhast heoppor t uni t yt oi nc r easet heheal t hf ul ness of i t s menu i t ems . Thus ,t he soci alext er nalf act or si nt hi s aspect of t he PESTEL/ PESTLE anal y s i sofMcDonal d’ sCor por at i onc r eat emaj oroppor t uni t i esf or bus i ness dev el opment .These effect s ofext er nalf act or si nfl uence consumer s ’ per c ept i onaboutt hecompany .Mc Donal d’ scor por at esoci alr espons i bi l i t ys t r at egy ands t ak ehol dermanagementi ni t i at i v espar t i al l yc ount er actt henegat i v eeffect sof s uchsoci al t r endsont hebusi ness .

Technol ogi calFact or si nMc Donal d’ sBus i ness Thi saspectoft hePESTEL/ PESTLEanal y s i sper t ai nst ot hei mpactoft ec hnol ogi es and r el at ed t r ends on t he r emot e ormacr oenvi r onmentofcompani es .I nt hi s ext er nalanal y si s case,Mc Donal d’ s Cor por at i on’ s succ ess depends on busi ness adapt at i on t o max i mi z et he benefit s oft echnol ogi c alt r ends and r es our ces .The companyneedst oaddr esst hef ol l owi ngt echnol ogi c al ext er nal f act or s : 1. 2. 3.

Moder at eR&Dact i vi t yi nt hei ndus t r y( oppor t uni t y ) I nc r eas i ngbus i nes saut omat i on( oppor t uni t y ) I nc r eas i ngs al est hr oughmobi l edevi ces( oppor t uni t y )

Mc Donal d’ s has t he oppor t uni t yt oi nc r ease i t sr es ear c h and dev el opment i nv est ment s t o i mpr ov e busi ness effect i v eness and effici ency . I n t hi s PESTEL/ PESTLE anal y si scas e,t hest r at egi cobj ect i v ei st or eachahi gherl ev elof R&D act i v i t y compar ed t o compet i t or s . Al s o, t he company can appl y mor e aut omat i on t o max i mi z e pr oduct i vi t y ,bas ed on t he ext er nalf act orofi ncr easi ng d’ soper at i ons bus i nessaut omat i on.Suchaut omat i onr equi r eschangesi nMcDonal t her mor e,t hebusi nesscani mpr ov e managementandpr oduct i v i t yappr oaches.Fur i t smobi l es er vi c est or each mor econsumer svi ai t smobi l e apps.Bas ed on t he t ec hnol ogi calt r end ofi ncr eas i ngsal est hr oughmobi l edevi ces ,t hecompanycan expectr ev enuegr owt ht hr oughmobi l ec hannel s .I nt hi st ec hnol ogi calaspectoft he PESTEL/ PESTLE anal y si s ,McDonal d’ shasmaj oroppor t uni t i est ogr ow i t sf astf ood r es t aur antbusi ness .

Ecol ogi cal / Env i r onment al Fact or s Thi saspectoft hePESTEL/ PESTLEanal y s i sr ef er st ot het r endsl i nk edt ot henat ur al envi r onment ,andhowt heset r endsaffectMc Donal d’ sr emot eormacr oenvi r onment . Thi scompanyanal y si sex ami nest hei nfluenceofecol ogi calt r endsonbusi nesses

andconsumer s .I nMcDonal d’ sbusi nessenvi r onment ,t hef ol l owi ngar et hemost s i gni fi cantecol ogi cal ext er nal f act or s : 1. 2. 3.

Ri s i ngi nt er es tf orc or por at eenvi r onment alpr ogr ams( oppor t uni t y ) I nc r eas i ngemphas i sonsus t ai nabl ebus i nes ss t r at egi es( oppor t uni t y ) Changesi nc l i mat econdi t i onsi ns omer egi ons( t hr eat )

Mc Donal d’ sCor por at i onc ani mpr ov ei t senvi r onment alpr ogr amsandsus t ai nabi l i t y t os t r engt heni t sbr andandbus i nes sper f or mance.Theai m oft hes eendeav or si st o addr ess t he oppor t uni t i es ass oci at ed wi t h t he r i s i ng i nt er est f or c or por at e envi r onment alpr ogr ams,and t he i nc r easi ng emphasi s on s ust ai nabl e busi ness pr act i ces .I n t hi s PESTEL/ PESTLE anal y si s , such ext er nal f act or s cr eat e oppor t uni t i est hats uppor tMcDonal d’ sbusi nessst abi l i t yandpot ent i algr owt h.Ont he ot herhand,changesi nc l i mat econdi t i onsi ns omer egi onst hr eat ent hecompany .For ex ampl e,t hes e cl i mat i ccondi t i onsdet er mi ne t he av ai l abi l i t yand s t abi l i t yoff ood s uppl y , and i nfluenc e t he company’ ss uppl yc hai n. I n t hi s aspect of t he PESTEL/ PESTLE anal y si s ,t heecol ogi calext er nalf act or shi ghl i ghtc or por at esoc i al r es ponsi bi l i t yoppor t uni t i es,al t houghMc Donal d’ sal s oneedst of ur t herdi v er si f yi t s s uppl yc hai nt oaddr esst heeffect sofchangesi ncl i mat econdi t i ons.

LegalFact or s Thi s aspectoft he PESTEL/ PESTLE anal y si s per t ai ns t ot he i mpactofl aws or r egul at i onsonfir ms.Changesi nl egals y st emsandnew l awsshapet her emot eor mac r oenv i r onmentofbusi ness es by i mposi ng new r equi r ement s.McDonal d’ s Cor por at i on mus tcons i der t he f ol l owi ng l egalext er nalf act or si ni t si ndust r y envi r onment : 1. 2. 3.

I nc r eas i ngheal t hr egul at i onsi nwor k pl ac esandsc hool s( t hr eat ) I nc r eas i ngani malwel f ar er egul at i ons( t hr eat&oppor t uni t y) Ri s i ngl egalmi ni mum wages( t hr eat )

Heal t hr egul at i onsi mposel i mi t sont heaccessi bi l i t yandav ai l abi l i t yoff as tf oodi n s omewor kpl acesands chool s .Thi sl egalt r endt hr eat ensMcDonal d’ sr ev enuesf r om t hes emar k ets egment s.Ont heot herhand,ani malwel f ar er egul at i onsar ec l ass i fi ed asat hr eatandanoppor t uni t yi nt hi sPESTEL/ PESTLEanal y si s .Forex ampl e,t hes e r egul at i onsi nc r easec ost si nMc Donal d’ ss uppl yc hai n.Howev er ,t hes ameext er nal f act or c r eat es an oppor t uni t yt o i mpr ov e t he busi ness by i mpl ement i ng a compr ehens i v e ani malwel f ar epol i cy ,whi chcanat t r actmor ec ust omer swhoar e i nt er es t edi nani malwel f ar e.Al so,McDonal d’ sf acest het hr eatofhi ghermi ni mum wages ,whi c hl ead t o hi ghercost sand pr i c es .Howev er ,t hi sext er nalf act orhas l i mi t edi nfl uenceont hec ompany’ sbusi ness .Ov er al l ,t hel egal ext er nal f act or si nt hi s as pectoft he PESTEL/ PESTLE anal y si si mpose maj ort hr eat st hatMc Donal d’ s s t r at egi esmustaddr ess .

PESTEL/ PESTLEAnal y s i sofMcDonal d’ sCor por at i on–Recommendat i ons Thr eat s.Theex t er nalf act or sandt r endsout l i nedi nt hi sPESTEL/ PESTLE anal y si s poi ntt ov ar i oust hr eat sr el ev antt oMcDonal d’ s.A r ecommendat i ont oaddr esst he

combi nedt hr eatofgov er nment algui del i nesf ordi etandheal t handev ol v i ngpubl i c heal t hpol i ci esi st oc ont i nual l yi mpr ov et hec ompany’ smenu.Theul t i mat eai mi st o mak eal l McDonal d’ smenui t emsheal t hf ul .Thi sr ecommendat i onal s oaddr ess est he t hr eatl i nk ed t ot he heal t hy l i f est y l et r end,and t he t hr eatass oci at ed wi t h heal t h r egul at i onsi nwor kpl acesandsc hool s .Regar di ngt het hr eatofcul t ur aldi v er si t y ,i ti s r ecommendedt hatMcDonal d’ si mpr ov et heflexi bi l i t yofi t si nt er nat i onal oper at i onst o ens ur et hatmenui t emsmat cht ar getconsumer s ’pr ef er ences .Al s o,t hecompany can f ur t herdi v er si f yi t ssuppl ychai nt o addr esst he t hr eatofchangesi nc l i mat e condi t i onsi nsomer egi ons . Oppor t uni t i es.Ther ear emanybus i nessgr owt hoppor t uni t i esenumer at edi nt hi s PESTEL/ PESTLE anal y si sofMcDonal d’ sCor por at i on.I ti sr ecommendedt hatt he company i ncr eas ei t s mar k etpenet r at i on i n hi ghgr owt h mar k et s.Forex ampl e, i ncr easi ngt henumberofMcDonal d’ sr est aur antl ocat i onsi nhi ghgr owt hdev el opi ng count r i esi nAsi ac ancont r i but et oov er al lgr owt h.Thi sr ecommendat i onal sodeal s wi t ht heoppor t uni t yt ogr ow basedonr i si ngdi s posabl ei ncomesi nv ar i ousmar k et s ar oundt hewor l d.Toaddr es st heoppor t uni t i est hatcomewi t hecol ogi calt r ends,i ti s r ecommendedt hatMc Donal d’ sexpandi t sc or por at es oc i alr esponsi bi l i t ypr ogr ams . The st r at egi c goals houl di ncl ude i mpr ovi ng t he envi r onment ali mpactoft he bus i ness ,whi l es t r engt heni ng t he br and and c onsumer per cept i on aboutt he bus i ness ....