Impact of External Environment on McDonald's International Business

This report evaluates the impact of external environment on McDonald's international business. It covers socio-economic, technological, political, and ecological factors affecting the business decisions of McDonald's. It also discusses the cultural considerations taken by the firm.

CASE STUDY 3

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Socio-economic cultures affects over McDonald's restaurant in global business.......................3
Technological development factors that affects the International business of McDonalds........4
Political environment considerations that affects the McDonald business decisions..................5
Ecological considerations by McDonalds that affects business decisions..................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
Strategic marketing planning plays a significant role for the business productivity. For every
organisation their internal and external factors create a major impact over the business
performance. Planning and strategy will enable the businesses to make their objectives and goals
achievable which ensures the better market position of the organisation (Hasbi and et.al 2021).
McDonalds is the leading global company which offers the food services in various countries,
company have strong brand reputation which makes them global leading food service firm. This
report will lay out the evaluation of the case study which is based on the external environment of
the organisation, it will cover the socio economic cultures that affects the company’s business in
international market, it also describes the technological development. It will further evaluate the
political and environmental considerations that affects the business decision and also lays out the
ecological considerations taken by the firm.
MAIN BODY
Socio-economic cultures affects over McDonald's restaurant in global business
McDonald is a leading international food service provider retailer company which has
more than 30,000 local restaurants all across the world. The restaurant is serving numerous
people in more than 100 countries every day. The company holds a considerable section within
the branded segments of the informal eating out market under which it operates. In context of
socio-economic factors, it has been identified that with the effects of economic crisis, the
performance of the McDonald's are greatly affected. But with the famous feature if globalization,
the company start its business in various countries without facing any kind of hustle (Jain, 2020).
From past many years, the company is successfully operated in various diversified countries all
across the globe. The company specially put emphasize over the teenagers and children in order
to achieve their targets as it becomes easy to attract youngsters more towards the fast food and
this strategy capitalized in successful manner over existing social trends.
Another factor over which the company put great amount of emphasize is that nowadays
people are more attracted towards consumption of meals with minimum time efforts. And this is
the basic habit that attracts more consumers towards the food outlet and purchase the product in
an unplanned manner. The company also focuses towards providing low priced food product or
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cheap food item with appropriate quality among the people living within the society. It shows the
results that the product creates growing demand for low priced food that is available all time
within the market. In order to identify economic factors that helps to determine consumers ability
to purchase the product it had been evaluated that the customers economic conditions greatly
affects their buying behaviour of that particular item. Whenever the purchase occurs, the role is
completely dependent upon their cultural factors. Hence, the company highly appreciated the
behaviour of people in international context because of their culture of eating outside or adopt
new things in most easy manner.
Culture is a part which illustrates forces that affects the society's basic values, behaviour
of people, perception and preferences. It involves the complete heritage of the society in which
the business exists because ultimately the society is completely based upon the cultural values of
the people living within them. The business is significantly affected by the religion, education
level of the people, families, traditions, habits and similar kind of elements that affects the
business organization in most crucial manner. For instance, at the time of entering into the
economy of India, McDonald's prefers do not introduce Big Mac Burger as it includes chicken
and beef products which highly defer the Hindu people values and beliefs (Mainar-Causapé,
Ferrari and McDonald, 2018). This shows that all the businesses have to deal and enter within
the market by completely acknowledging the people beliefs and values who are living in that
particular society.
Technological development factors that affects the International business of McDonalds
Globalisation is creating new opportunities for the businesses, it is offering a chance for
the business to enter into the international market. Due to this market is witnessing a large range
of new technological development, customers in the market also demanding for the product
which consists of technological feature (Matovic, 2020). As technologies plays a crucial role, it
eases out the organisational work easily also fulfil the requirements of tech savvy customers.
With this there are many changes which can be seen in communication and international travel,
as changes in lifestyle and attitude also impacting the product demand. For the McDonald firm, it
is essential to implement the technological features in their product and services to attract the
large range of the customers. Company is successful in evaluating the new technologies, which
shows their good reputation among the global market. Carefully evaluation of the technology
shows that each franchise of the organisation is working productively in the market.

To expand in international market it is necessary for the firm to introduce the unique
product in order to attract the customer in new market. As to introduce the services with
implementation of suitable technologies will plays an crucial role for the firm. It helps in creating
efficient brand awareness in international market. For the case of McDonald it is stated that when
company is going to enter into the Russian market they have implemented new technologies in
their product and service, which plays an important role for the firm to acquire long term benefits
in Russian market (Kotlyk and Jamal, 2018). To yield the technology McDonald will
successfully diversify their services in the global market environment. Company can proceed to
invest in artificial intelligence technology, with this they will be able to provide the better
customer services as to provide them on time solution for their queries. Having a good customer
relationship will make the company to acquire maximum market share, with this they will also
proceed to follow the successful path, which makes them strong in their market field.
Utilisation of technologies will allow the McDonalds to prepare the order of the customer
rapidly and also helps in delivering it on time. As every customer in the market always look for
the fast and reliable services that are being offered by the organisation. In case of McDonalds
company can proceed to use the IOT (Internet of thing technology) with this they will be able to
create their customer persona, by using the information that are stored by the IOT technology.
Thus technologies have the great impact over the business, with this organisation can easily go
with the planning to increase their market share or to develop large customer base with better and
fast services.
Political environment considerations that affects the McDonald business decisions
Political factors such as government policies, rules and regulations that creates a major impacts
over the business. If the organisation is not following the government regulation in such they
have to face the vulnerable situations. Thus for the global expansion, company need to analyse
the political environment of the certain country as to know what percent of impact does the
government have on the business, what rules and policies are followed by the businesses in such
market environment. Having knowledge in this will enable the firm to successfully established in
that market (Rajabov and Mustafakulov, 2020). Thus for the McDonald it is essential for them to
follow the policies of certain market in which they are trying to diversify their product and
services. It affects the business productivity also impacts the decision making process of the
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organisation thus for the productive business, their franchise need to evaluate the certain
standards.
Government policies have large impact as how the product in such market sold and promoted or
produced, it must need to satisfy the certain product standards. As for the McDonald it is
important for them that their food products are must need to satisfy the food standards. It is
identified that for the McDonald firm they have faced problem regarding legal rules when they
are operating their business in Russia, it stated that the Russian government impacted the
business, which means that the brands have to change their name, that means McDonald also
need to translate their brand name (Samusevych and et.al 2021). As for the company it is also
examined that in France and China door to door selling is prohibited, which means that
McDonald have to change or reschedule their services in order to sustain in such market. Thus it
is examined that to sustain in other country’s market it is essential for the firm to follow all
government regulation to create brand awareness of their business.
Ecological considerations by McDonalds that affects business decisions
Ecological factors such as humidity, climate change, pollution have the greater impact over the
business. It is essential for the firm to meet the sustainability in order to prevent the natural
resources from being consumptions. This factor comes under the regulations which need to be
addressed. In this modern era customer are demanding for the organic and sustainable product,
thus it is up to the organisation to provide better delivery of the product (Messeni Petruzzelli and
Murgia, 2021). Climate change is the major factor that are driving many changes, as it can cause
the problem in production as well as in transportation of the services. Many companies have
stated to go green in order to reduce the environmental impact (Paska, 2021). It is the rise
concern that businesses are moving with reducing the use of plastic that cause various
environmental hazards. Thus McDonald company also committed to reduce the use of plastic for
their product packaging, company has also stated that they will implement the use of fibre based
packaging for their product to meet the sustainability.
McDonald firm also pledge to ensure that all their packaging should be done in order to
meet the environmental sustainability. They also committed to reduce the use of fossil fuels, as
by burning this will cause the pollution in the environment. As for further expansion in the new
market it is must for the McDonald to follow the rules regarding the environmental

sustainability, they need to ensure that their product and services are not causing threat for the
climate change. Thus to address the sustainability will help the company to accomplished their
desired goals and objectives. Being environmental friendly is the most important aspect for the
company’s business, as it is examined that environmental groups are creating impact on
McDonald to reduce their use of plastic. It is also found that these factors has no great impact
over the sales of McDonald, but still for the better progress company need to account all the
factors, that helps them to generate revenues. It has been found that consumers support those
firm that develop the eco friendly product like utilisation of compostable packaging. By
considering these factors will help the businesses to implement changes in their operational
work, as well as with this they can help the community to meet the sustainability. Companies can
proceed to save the money which they have invested on the energy instead they can use the solar
panel, it also gives the assurance that with the saved money company can proceed to raise the
charity even for societal development.
Thus Above are the factors that have impact over the business performance of the
McDonald, it is up to the organisation to come up with the strategy that will help them to
streamline their organisational functionalities. By reviewing the strategies will help the company
to build great position in the international market.
CONCLUSION
From the above report it is concluded that Strategic marketing allows the firm to
successfully established in the market, as well as to accomplished the desired goals and
objectives. This report has illustrated the case study which accounts the external environment of
the organisation as how political, socio economic and technological factors impacts the business.
It further describes the factors as cultural and other technologies that impacts the international
business of the organisation. It lastly concluded with the analysation of the factors which are
political and ecological that are taken by the organisation and its impact over the international
business decisions.
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REFERENCES
Books and journals
Hasbi, H. and et.al 2021. Effect of strength of the external environment and Islamic business
ethics on the performance of Islamic finance companies with intellectual capital
mediation. Management Science Letters. 11(3). pp.993-1002.
Jain, S., 2020. Analyzing the public health crisis in India fueled by the growth of the fast-food
industry. IJSSER, 5(03), pp.791-8.
Kotlyk, A.V. and Jamal, Y., 2018. Methodical approach to analysis of volatility, uncertainty,
complexity and ambiguity of the external environment.
Mainar-Causapé, A.J., Ferrari, E. and McDonald, S., 2018. Social accounting matrices: basic
aspects and main steps for estimation. Publications Office of the European Union:
Luxembourg.
Matovic, I.M., 2020. PESTEL Analysis of External Environment as a Success Factor of Startup
Business. ConScienS, p.96.
Messeni Petruzzelli, A. and Murgia, G., 2021. A multilevel analysis of the technological impact
of university-SME joint innovations. Journal of Small Business Management, pp.1-33.
Paska, M., 2021. The Aspect of Ethics Determined by Technological Impact.
Rajabov, N. and Mustafakulov, S.I., 2020. Econometric analysis of the impact of the investment
climate on the sustainability of socio-economic development of navoi region. Архив
научных исследований.
Samusevych, Y. and et.al 2021. Environmental, energy and economic security: Assessment and
interaction. In E3S Web of Conferences (Vol. 234, p. 00012). EDP Sciences.