Impact of Socio-Economic Cultures and Technological Developments on International Business: A Case Study of McDonald's

This report analyzes the impact of socio-economic cultures and technological developments on international business using McDonald's as a case study. It also explains how political environment and ecological considerations affect international business decisions.

International
business

Table of Contents
INTRODUCTION...........................................................................................................................4
Main Body.......................................................................................................................................4
Identify and illustrate how socio-economic cultures and technological developments affect
international business.............................................................................................................4
Analyse and explain how the political environment and ecological considerations affect
international business decisions.............................................................................................6
CONCLUSION ...............................................................................................................................8
REFERENCE.................................................................................................................................10

INTRODUCTION
International business is defined as the cross-boarder transactions of goods, services,
technology, capital and people across national boundaries or between two or more countries.
There are various internal as well as external factors are included in international business
environment. In external environment factor consist political, environmental, socio-economic,
technological and legal factors that impacts growth and development as well as decision-making
on international level. In international business , it is very important to analyse these factors
properly and take decisions accordingly that enable business to sustain in competitive business
environment for longer period of time.
In this report chosen organisation is McDonald's which is leading global fast food service
retailing organisation with more than 3000 local restaurants that serves 52 million people in more
than 100 countries. Respected organisation founded on 15 May. 1940 by Richard and Maurice
McDonald. Headquarter of organisation situated in Chicago, U.S. McDonald is well known
brand that serves quality food products to its customers. In this report socio-economic cultures
and technological developments are mentioned that impacts efficiency of international business.
Furthermore, political environment and ecological considerations are explained that impacts on
decision-making process of international business.
Main Body
Identify and illustrate how socio-economic cultures and technological developments affect
international business
In business environment, various factors are included such as technological development and
socio-economic culture that impacts efficiency and effectiveness in international market place
(Braakmann and McDonald, 2018). McDonald analyse these factors properly that take decisions
and develop policies accordingly.
Socio-economic culture impacts McDonald:
There are various factors are included in economic factors that impacts on customer
purchasing power and their spending pattern. McDonald understand the economic conditions of
country and set prices of its products accordingly. In developing country, customer has limited
purchasing power and low level of literacy that creates various problems for marketers in

promotional activities. If foreign market has low rate of economic development than McDonald
try to use cost v-effective promotional method to attract large customer base. Respective
organisation offers its products and services in around 120 countries. Economic changes impacts
business performance and functionality in direct and indirect manner. If a country has slow but
stable growth than it provides opportunity to McDonald to grow as well as enhance stability in
its restaurants that enhances overall performance of business (Vasstrøm and Normann,2019). As
US market is the biggest contributor in the revenue of respective organisation and enhances
sustainability in competitive business environment. On the other hand, slow down in the
economic condition of Chinese market impact on business profitability in negative manner.
In international business environment various social factors that impacts business
performance and functionality in international business. Several social forces impacts on growth
and success of McDonald which are prevailing family structure as well as the trend towards
youth-orientation culture. There are various decisions are taken by the organisation to extent that
children can select the place to eat. As McDonald special concentration on the children and
teenagers and publish advertisements to target selected customer base.
Economic factor is important for McDonald to analyse consumer purchasing power and
their buying pattern. Purchasing behaviour of customers are depends on their cultural factors. Ti
understand international market, organisation should appreciate the behaviour and tendency of
buyers. Culture is defined as the force that impacts in society's basic values, behaviour,
preferences and perceptions. There are various factors are included in culture such as habits,
religion, language, education and family and references group that collectively impacts on
organisational. Performance and effectiveness in international market. McDonald respect culture
of countries and offer then products accordingly that enhances its brand image and popularity in
market such as as the organisation enters in India than it decided to not launch its Big Mac
burger as per the Hindu prohibition against beef consumption (Karaalp-Orhan, 2020). Respective
organisation change its menu and food production method according to demand of country.
As organisation understands culture and requirements of each country in which it serves
its products and services that enables it to expand business and sustain in the environment for
longer period of time.
Technological development affect McDonald:

In current business environment, various advancements, innovation are take place in
technology that impacts overall working procedure of organisation. Development and
advancement in technologies plays important role in international business through enhancing
international travel and communication to consumers. Drastic technological changes lead the
situation in which social habits and fashion tends of customers are changing quickly. Changes in
lifestyle and attitude of customers changes demand of products and their selling process. With
the perspective of business, technology factor includes creating new products and service, bring
innovation in them, creating new technologies and attaining market opportunities (Lachner,
Backfisch and Stürmer, 2019). There is high technology is required for using promotional
methods and other alternative media channels to spread awareness of organisational products in
market such as televisions and websites.
There are various aspects are included in technological factor such as research and
development, automation and use of mobile devices that provides opportunities to business and
make effective positioning in international market place. Advancement of technology facilitates
McDonald which conducts its operations at international level to overcome different
technological problems. Respective organisation ensure systematic substitution of organisational
equipments for people who are engaged with organisation and make ensures that all planes
related to technology are implemented in each franchise with same manner and standard. When
McDonald enter on the market of Russian market, then respective organisation took various
technologies to provide quality products to customers that enable organisation to gain long-term
benefits in Soviet citizenry (Kummitha, 2018). Respected organisation uses latest technologies to
improve its production rate such as McDonald purchase machinery from Holland to harvest
potatoes that are used for producing French Fries. As respective organisation introduce new
technologies on regular bases for improving customer services.
Organisation setup self-order kioska in its restaurant across the world that reduce the
requirement to stand in queue at the order counter. McDonald launches its electric menu in
restaurants that shows the list of items according to weather, region preferences and time.
Organisation has launches its own application on which customers can place their order and that
can get their food delivery at their home. McDonald also use social media marketing for
promoting its products and services to large customer base that enhance organisational
productivity and profitability. It facilitates business to gain international customers and enhances

reach to potential market (Kincheloe, 2018). Organisation evaluates its competitors and
technologies that are used by them than take decisions to adopt appropriate technology that
boost business productivity and performance in international market place.
Analyse and explain how the political environment and ecological considerations affect
international business decisions
There are various factors of business environment that impacts decision-making process
of business that operates their functions at international level that includes political environment
and ecological considerations. These factors are not in control of organisation but impacts its
functions ion positive as well as negative manner.
Impact of political environment on McDonald:
Political factor is determined as the laws, agencies and group that influences as well as
limit organisation or individual in society. There are various dimensions are included in political
environment such as attitude of government for foreign markets, government bureaucracy,
political stability and financial policies of a country. Political as well as legal factors are essential
because they covers various aspects of organisational policies. In political environment,
government policies impact whole industry through different regulatory bodies which are known
as department of trade and industry, and department of environment. These department are
responsible for developing policies on trading, standards and restrictions that must be applied by
the organisation in an industry (Bak, 2020OVA, 2018). These policies impacts business
regarding how products of organisation are produced, produced as well as sold in market.
McDonald is the multinational organisation that provides its products and services across
the world, so organisation understand the political background, legal system of different regions
in which it serves its products. Respected organisation various legal consequences regarding
changing the name of brand in Russia . McDonald retain sound of its name. This thing also take
place in Japan where pronunciation of organisational brand name is changes to Makundonaldo.
It reflect that political factors impacts organisational decision-making.
McDonald is the world's largest fast food organisation. Fast food organisation have the
risk of being targeted by the government as their concern of safety of people. It organisation is
not able to compile these regulations than it impact business existence in global economy
(McDonald, 2017). It impacts on organisational decision making process. Through considering

these regulations, McDonald add some healthy options in its menu that enhances organisational
brand image or positioning in international market place.
Ecological considerations impact on McDonald decisions
Climate as well as physical terrain are some important environmental conditions of a
country that have impact on demand of products and services in market place. McDonald
considers these factors before taking decision of entering in new market. Apart form that, relative
temperature, humidity are considered as some climate conditions that impacts effectiveness of
organisational products in foreign market. As environmental group forced to McDonald to
reduce the use of plastic as well as styrofoam packing. Research of McDonald clears that
environmental issues will have neither have positive nor negative impact in business sales.
As McDonald conduct its operations in various countries, si changes in climate
conditions of some regions is the threaten for organisation in international market. These climate
conditions impacts on availability of food products as well as influence organisational supply
chain as well (McCarthy, Kappleman, and DiGuiseppi, 2017). So, respective organisation
analyse the climate conditions on each country in which it operated its operations than
formulated policies and strategies accordingly to sustain in international market for longer period
on time.
Ecological considerations impacts on the decision-making process of McDonald through
continuous working towards attaining suitability in business activities. As organisation take
decisions to use packaging material that come from renewable and recycling sources. Respective
organisation also committed to install energy efficient kitchen equipment and led lights its
restaurants all over the world that save energy. To sustain in international market for longer
period of time, organisation take decisions to adopt wast management technique and corporate
social responsibility that maintain organisational differentiated image in the mind of customers
and retain them with organisation. Through considering these ecological aspects organisation can
reduce the negative impact on organisation efficiently.
These are the factors of external business environment that impact business performance
and functionality in positive and negative manner. It is essential for organisation to analyse these
factors and their impacts on business operations. McDonald take decisions accordingly that
enables business to retain its customers with organisation for longer period of time.

CONCLUSION
As per above report, it can be concluded that international business consist commercial
activities that is related to transferring products, services, capital and technologies to other
country. It facilitates business to conduct its operations in other country and provide products of
home country to international market. In business environment various factors are included such
as political, economical, social, technological, legal and environment factors that impacts
business in positive and negative manner. These factors impacts on business performance,
functionality and sustainability in international market. Organisation adopts latest technology
that enables organisation to enhance production and compete with other in efficient manner.
Decision-making procedure of international business is getting affected by the ecological and
political environment. Stability of political environment is the factor that facilitates business to
conduct its operations in efficient manner and gain competitive advantages then others.
Organisation evaluates customers purchasing behaviour and buying pattern to provide them
products that can satisfy their needs and demands in efficient manner.

REFERENCE
Book and journal
Bak, S., 2020. 4. McDonald's in Seoul: Food Choices, Identity, and Nationalism. In Golden
arches east (pp. 136-160). Stanford University Press.
Braakmann, N. and McDonald, S., 2018. Student exposure to socio-economic diversity and
students’ university outcomes–Evidence from English administrative data.
Karaalp-Orhan, H.S., 2020. Regional disparities in Turkey: a socio-economic
perspective. European Journal of Sustainable Development, 9(3), pp.103-103.
Kincheloe, J.L., 2018. McDonald's, power, and children: Ronald McDonald/Ray Kroc does it all
for you. In Kinderculture (pp. 219-248). Routledge.
Kummitha, R.K.R., 2018. Entrepreneurial urbanism and technological panacea: Why Smart City
planning needs to go beyond corporate visioning?. Technological Forecasting and Social
Change, 137, pp.330-339.
Lachner, A., Backfisch, I. and Stürmer, K., 2019. A test-based approach of modeling and
measuring technological pedagogical knowledge. Computers & Education, 142,
p.103645.
McCarthy, C., Kappleman, W. and DiGuiseppi, W., 2017. Ecological considerations of per-and
polyfluoroalkyl substances (PFAS). Current Pollution Reports, 3(4), pp.289-301.
McDonald, J., 2017. Reforming Environmental Law for Responsiveness to Change. NEW
DIRECTIONS, p.243.
OVA, J.I.A.S., 2018. McDonald’s, Terminators. Ana's Land: Sisterhood In Eastern Europe, p.76.
Vasstrøm, M. and Normann, R., 2019. The role of local government in rural communities:
culture-based development strategies. Local Government Studies, 45(6), pp.848-868.