SWOT and PESTLE Analysis of McDonalds: Business Plan

This report provides a SWOT and PESTLE analysis of McDonalds, along with its target market, human resources practices, and different sources of finance.

Company chosen
McDonalds

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
SWOT Analysis..........................................................................................................................3
PESTLE Analysis.......................................................................................................................5
Target market and the strategies the company adopted to reach their customers.............6
Human resources practices of McDonald................................................................................6
Different sources of finance......................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business can be demonstrating as plan of action conduct by a company and firm which are
engaged in commercial, industrial or professional level. Different business can be described
differently types of ownership, offering goods and services. entrepreneurs are the individual or
the group that have a new idea of business and implementation of idea to form a shape of
business. Entrepreneurship is the process of establishing any type of business by introducing the
product in the market. Entrepreneurs starts the businesses when they see some opportunity to full
fill the need in order to generate leads. The main objective of the business is to generate the
profit. In this report well SWOT analysis on the McDonald is done. McDonald is one of the
largest manufacturers of fast food having more than 40000 in the worldwide.it is a food
corporation founded in 1940 by Richard and Maurine McDonald. This report also contains the
Pestle analyses and HRM practices and sources of finance of McDonalds (Marochini, 2021).
MAIN BODY
SWOT Analysis
SWOT analysis is a tool for company that helps in finding the strength, weaknesses,
opportunities and threats of an organization. Strength and weaknesses are the internal factor of
the firm that helps in developing competitive position and minimization of failing of firm. On the
other side opportunities and threats are the external factor of organization that helps in
identifying the opportunity as well assisting the threats arises from the outside the world.
McDonald is an American company which was established in 1940 by Richard and Maurine that
serves the fast food to its customers. It has more than 37000 franchisees in all over the world.
This company is famous for there different types of burgers. SWOT analysis helps McDonald in
identifying its strengths and weakness and helps in determining the opportunity and solution to
the threats. the deep SWOT analysis of McDonald has been derived below in which the company
strengths, weaknesses, opportunity and threats are thoroughly discussed.
STRENGTHS-
 Brand valuation- it is analysed that McDonald have worked in the food industry for a
long period of time and has maintained the good will for the particular work field and

they have earned the great brand image by making good revenues and turnover in the
competitive market. The brand valuation of it is more than 150$ billion which is
comparatively higher than its competitors like Starbucks, Subway, KFC and many more.
 Development of new technology- the administration of McDonald is adopting new
technologies to build the strong position in their specific market. and the franchises must
consider some of the strong points like proper timing of the online delivering of the food
products that they are providing to their available customers and they must analyse this as
their powerful strength among all the rivalry in the market.
WEAKNESSES-
 High employee turnover- McDonald have some of the employees who are not satisfied
because of low pay according to the work that they are doing in the company and when
the employees of McDonald are not really happy with the remuneration that they are
having in the company so the company will face some of the challenges and it is said to
be the weakness for the company (Bisetti, 2021)
 Supply chain- McDonald is the famous and well known franchises in the market so there
are very busy with dealing in the supply chain of the product that are being provided
some times due to high amount of orders they are having trouble in completing all the
demand of the consumers and due to this they are having lack of good timing and facing
low profit and having more operational charges.
Opportunity-
 Growth of fast food industry- this is the possibility for the company and also a chance
where they can develop the delivering facility by making some of the necessary changes
in the company and as it is considered that people are having habit of having fast food
more offense so the company can grab this chance of providing them what they want.
 Low cost- the company can also lower their cost in comparison to other rivals in the
market .so that more number of customers are inclined towards the brand and always
prefer to have mood from McDonald.
Threats-
 High competition- there are so many of competitors in the market for this company and
they are doing their best to meet and analyse the working of McDonald and this is the

threat that can caused to the company and have some major impacts with the revenue and
turnovers(Parchure and Parchure, 2021).
 Cultural preferences- different culture are followed in different part of the world. The
one of the biggest threats to the McDonald is various culture have various preference for
example some people likes non veg and some don't like it. This creates a cultural threat to
the organizations.
PESTLE Analysis
It is an important management framework used to analyses the various external factors
affecting various project brands or business overall. Its important to understand the various
internal and external factor that affect the functioning of current project that the organization
want to take. A business can not control these factors but helps in decision making.
McDonald uses pestle analysis to identify the external factors such as political, economical,
social, technological, legal and environmental, that affect their cost and brand valuation.
 Political factor- these factor reefers to governmental policies and actions that influence
the McDonalds business as well as the economy. Government of any country first focuses
on the health and hygiene regulations that are followed by the different organizations. So
as to prevent the health risk. As McDonald operates in different countries, the relation
between the nation and trade contract play an important role in the increment of
McDonalds. Due to the disputes arises between the different countries creates a negative
impact on the organization. But it has scope of expansion in some countries (Gustina,
2021).
 Economic factor- to successfully run a business, this factor plays a very crucial role. Due
to poor employment and instability in economy, it affects the organization in a falling
way. Due to less income of the people they worry to spend on junk food. Creates a
negative impact on the other hand new young generation who loves the junk can help
McDonald in boosting the sales.
 Social factor- now a days the society is going in way of health-conscious avoiding junk
food and high calories food and high salt. Due to which most people prefer healthy diet in
day to day life. This affect sales of the McDonalds. And the firm has to reshape their
business by adding some healthy items to their menus.

 Technological factors- this is one of the most important factors that can help in increasing
the sales of any firm and reduce the cost of product. Social media and digital marketing
are some advance tools that help McDonald in gaining the fan base that automatically
helps in attracting more customers.
 Legal Factor- An organization has to follow all the regulations and make a licensing so as
to run business. (Stout, 2021) McDonalds uses legal licencing that enables them to
manufacture different types of food items. These licensing includes hygiene standards
and other safety standards.
 Environmental factor- most of the organization follows the corporate social responsibility
because of high environmental consciousness so as to prevent the environment.
McDonald also follows the CSR regulations and fulfil ecological sustainability.
McDonalds reduces the use of plastic packaging so as to protect the environment.
Target market and the strategies the company adopted to reach their customers
McDonald is largely based younger generation market. Its main focus is adult
between the age of 10 to 30. Most of the business of the McDonald run by the franchises
in more than 100 countries. IEO has strong competitions and stationary growth.
McDonald uses the different strategies to segment of market the different mix strategies
are demographic, geographic and psychographic (Lipp, 2021). This content is so much
affected by consumer changing taste and preferences. Due to change of consumer
consumption patter and the buying behaviour effects the targeting strategies. Other causes
of this targeting strategies for McDonalds are rise in income level and fast food chain of
restaurant outlets of McDonalds. The McDonald set a brand image of the target audience
in the market area where they can easily promote there brand by mind setup of target
audience which helps the brand name to grow and expand in the market area to maximize
the profit and minimize the losses.
Human resources practices of McDonald
McDonalds’s HRM is working as to differentiate department and clutches a central place
in practically all major processes of the firms. All human resources responsibilities are done by
the managers. The most important resources in McDonald are employees to create a competitive
edge. The main function of human resources in McDonalds are policy welfare, supportive,
negotiation and bargaining and more on (Navarro, 2021).

 Recruiting right people- For McDonald, people are its most important assets
because customers satisfaction begins with the attitude and the ability of
employees, effective workers are best route to success. For these reason
McDonalds strive to attract and hire the best and to provide best place to work.
All business experience staff turnover for various reasons for example- carrier
changes, leaving the area, returning to education and new opportunity elsewhere.
Recruiting and training staff is very expansive and business will look to keep staff
turnover to a minimum level. One way of doing this is to chose wisely and treat
them well. McDonalds needs people who want to excel in delivering outstanding
services.
 Process of Recruiting suitable applicants- For recruiting hardly paid employees,
McDonalds uses several avenues position that are generally advertised in the
restaurants. McDonald scripts an interview guide that helps the company predict
how an applicant past behaviour is likely to influence future performance. It uses
a fact-based decision-making process.
 Training- McDonald success is building on the highest standards of quality
services and cleanliness delivered to customers in each of its restaurants. Well
trained crew and managers first step to achieving these standards. Its firm policy
to provide career opportunity that allow employees to develop to their fullest
potential. This incus a comprehensive training program for crew and operation
management and career progression that enables first employees to progress
through to a senior position through merit-based position.
Different sources of finance
Finance is the most important aspect of starting an innovative enterprise. That helps a
business to grow to next stage. There are different sources of finance used by the different
organization. McDonald uses some internal and external sources of raising the finance which are
followed as-
 Sale proceeds- it is one of the famous internal sources of generating the funds.
McDonalds uses the retained amount for the expansion of business by establishing new
restaurant in new areas or new asset purchase.

 Bank loans- the most common source of finance is to approve loan for business through
different banks. The methods helps in getting the initial cost. McDonald uses different
type of bank loans on the basis of different time period like short term as well as long
term bank loan.
 Debentures- it is another type of loan that helps the McDonald in growing their business
by the establishment of new restaurant and the purchase of assets (Oliveira, 2022).
 Angel investors- these are those investors which invest their money in a business to
generate dividends. McDonald grow its business through the fund that the investors
invest in it. the investors’ money helps in buying the raw material in a bulk as well as
formation of new franchises and launching of new food (Κουμή, 2021).
CONCLUSION
In respect to above text, it has been concluded that business is an activity of trading goods
and service on small as well as large scale for the generation of profit. Entrepreneurs are those

who establish the business by implementing and evaluating the ideas. This report explained basic
about the McDonald (the largest fast food corporation). Swot analyses is done on the McDonald,
which conclude that the company strengths have been increased with less weaknesses and the
opportunity that helps the McDonald in gaining the more brand recognition. Through Pestle
analysis of McDonald, it has been concluded that there are different external factors that
influences the firm in identifying the future opportunities. It also been concluding the target
market of this firm is wide and different human resources practices are followed by McDonald.
And the fund generation is done through different sources like angel investors, bank loans,
debentures, etc. that helps the McDonald in growing their new restaurants and introducing the
new assets.

REFERENCES
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Study of a Beach Resort Owner.
Stout, M., 2021. Megan Stout Design: Design Firm Business Plan.
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Seu Urgell Airport (Bachelor's thesis, Universitat Politècnica de Catalunya).
Oliveira, G.C.C.D., 2022. Business plan: Cunnict (Doctoral dissertation).
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Lipp, M., 2021. Business Plan-Vorlagen im Internet–Eine vergleichende Darstellung im
deutschsprachigen Raum.
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