Mcdonalds business analysis

Document Type:Thesis

Subject Area:Business

Document 1

Furthermore, in the determination of the strengths and weaknesses of McDonald's the discussion will utilize the SWOT analysis. The discussion will conclude with an outline of how the process of decision making is affected by the information realized from the PESTEL and SWOT analysis. PESTEL Analysis of McDonald's Political Factors The political attribute of the PESTEL analysis involves a range of attributes about the country that a business bases its operations. The political attributes can range from policies and actions that a government enforces that ca have an impact on the McDonald’s business or the economy of the United States. The political environment of any business is essential because it can have an impact on the extent of development of the organization as well as the path of a business.

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The opportunity arises from the political factor such that the organization can retain its consumers by availing healthier options o their menu. Economic Factors The economic environment in a PESTEL analysis is inclusive of the financial trends and conditions that affect an organization (Ho, 2014). Therefore, the economic environment can have an indirect and direct outcome of the performance of McDonald’s. The range of economies that can have an impact on McDonald’s is inclusive of local, regional, and global economies. The precise economic factors that affect McDonald’s are inclusive of the rapid growth in developing countries, a slow down in the Chinses economy, and the stable growth of countries that are developed. These components generally serve as advantages to McDonald’s, though some of them give rise to a degree of shortcomings.

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For starters, the increase in the number of individuals with disposable income translates to an increase in the number of individuals that would rather eat out than cook from home. There is a connection between the preference for dining at restaurants as compared to eating from home and urban environments (Ho, 2014). Residents in urban environments are generally too busy to cook from home and thus to avail an advantage for fast food establishments such as McDonald’s. Cultural diversity, on the other hand, serves as a threat and opportunity. An increase in sales is another beneficial attribute of technological advancements such that the organization can embrace aggressive marketing strategies such as the utilization of social media. Furthermore, smartphones boost sales through the notion of ordering of food online and having it delivered to the location of preference of the consumers.

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Ecological Factors The ecological environment of McDonald’s based on PESTEL analysis includes natural trends. The ecological environment also highlights the impact of the trends about the remote and macro-environment (Ho, 2014). The ecological component can have an impact on McDonald’s business as well as its consumers. The legal component of the PESTEL analysis serves more to the disadvantage of the organization as compared to its benefit. The legal components of the PESTEL analysis affect McDonald’s such that the health regulations give rise to a range of limits. Some of the limits are concerned with the availability and accessibility to fast foods in some schools and areas of work. These market segmentations give rise to a decline in McDonald’s revenue (Ho, 2014).

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The welfare policies impact McDonald’s such that it gives rise to an increase in the cost of supply. The organization also engages in a range of activities that target to help the less fortunate. In carrying out such philanthropic activities, the organization adapts to the ecological business environment. Weakness The numerous weaknesses of McDonald’s also give rise to the impact of a range of external factors. For instance, given that McDonald’s primarily avails junk food, it has received much bad press. Furthermore, selling these attributes at low prices makes the situation worse for McDonald’s. Given that the individuals from urban environments are generally too busy to cook from home, the organization avails an online shopping option that allows for the delivery of food to the preferred consumer location, either at home or at their offices.

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Threats The various environmental factors also gives rise to threats that affect McDonald’s. For instance, when it comes to economic factors, it is evident that the success of the organization relies on the economic status of the country of residence. Therefore, in instances, where the economy of the country goes does down, so will the cumulative revenue that the organization will generate. The social factor of an increase in the embrace of healthier food options also gives rise to the threat of the decrease in consumers seeking healthy lifestyles (Simoneaux & Stroud, 2011). For instance, the social, legal, and political environment give rise to the threat in the increase in the consumption of healthier food. Therefore, given that the primary products and services of McDonald’s are junk food, they can lose a considerable customer base because of these attributes.

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