Impact of External Environment on McDonald's International Business

This report analyzes the impact of external environment on McDonald's international business. It covers the effect of socio-economic cultures, technological developments, political environment, and ecological considerations on the restaurant's business decisions in the markets where they operate.

International Business

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY .................................................................................................................................4
Illustrate how economic-socio cultures affect McDonald's restaurant in international business4
Illustrate and identify in which manner developments of technology affect McDonald's
restaurant business at international level.....................................................................................5
Evaluate and describe in which manner the political environment considerations affect
restaurant of McDonald's international business decisions in the markets where they operate .7
Explain and analyse the ecological considerations taken by the restaurant of McDonald's
restaurant affect their decisions of international business in the markets where they operate....8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
International business refers to the trade of services, goods, capital, technology and
knowledge across national borders and at global scale as well. International business is very
important because it help in terms of market expansion, cost advantage, product differentiation
and also support in improving economies of scale. In the present report, a case study is taken into
consideration on McDonald's(Aggarwal and et.al., 2015). This case study is related to the
external environment and its effect on strategic marketing planning. The present report will cover
discussion about socio-economic cultures effect on McDonald's restaurant in international
business. In addition to this, the report will cover analysis about technological developments
effect on the restaurant. Moreover, the report will cover discussion about the political
environment considerations affect restaurant in international business. The report also consist of
ecological considerations taken by the restaurant which affect the decision of international
business in the markets where they operate.
MAIN BODY
Illustrate how economic-socio cultures affect McDonald's restaurant in international business
Socio-economic cultures plays a very important role in terms of affecting the
international business of McDonald's. Economic factors basically are those factors which affect
the consumers purchasing power and spending patterns as well. At the time of recession, it has
been observed that spending power decreases and that will makes the price more relevant. The
industrial development and economic stages differences also have a profound influence on price
setting. McDonald's restaurant business at international level also affected in such a manner that
they have set lower prices according to lower stages of economic development in different
countries(Alserhan., 2017).In order to run their business into effective manner, they have to use
cost-effective methods of promotion otherwise it has been observed that the final price would go
beyond the reach of most of the customers.

It has been observed that there are shifts in spending power which also got affected by the
sociological demographic trends. When there are changes in demographics then it will affect
certain things such as designing, development, promotion and packaging of products of
restaurant. There are various social forces which greatly affect the success in the country of U.S.
The factor which affect the business was the prevailing family structure and youth-oriented
culture as well. Another factor which affect the US society has also placed on time favoured the
consumption of meals with minimum time effort (Basak and Govender., 2015).There are certain
other forces and institutions which affect the values of society, perceptions, behaviours and
preferences as well. In the case of India, it has been observed that the chain has decided to launch
its Big Mac burger as a result of deferring to the Hindu prohibition against consumption of beef.
They have offered fish, chicken and vegetable burgers to their consumers so that their business
not got affected on a very large scale.
In the case of Singapore and Malaysia countries, company has to change their preparation
methods so they can do business in proper manner in these particular countries. Company has to
dubbed their campaign in Spanish language so that they can attract prospective customers for
Puerto Rico (Bordia and Bordia., 2015). In the case of Southern China, company has to be very
careful in terms of not advertise prices with multiple occurrences of number four. In the
language of Cantonese, this word pronunciation is similar to the word of death. So in this way,
by the different factors of socio-economic cultures and different behaviours of countries affect
the business of McDonald's at international level.
Illustrate and identify in which manner developments of technology affect McDonald's restaurant
business at international level
Technological developments has affected the McDonald's restaurant business at
international level on large scale. Due to development in technology has made the international
communication and travel more accessible to consumers which led towards a situation where
fashion and social habits has changed on a very fast pace manner. Technological factors are
those forces which create new technologies, market opportunities and also create new products
as well. For taking the full advantage of the product, local market has to sufficiently developed
technologies which is based on certain considerations.

The new technological developments act as advantage in terms of using variety of
promotional methods with alternative use of advertising media such as websites or television.
The successful internationalisation of company can only be possible through overcoming the
problems of technical level(Brown and et.al., 2015). In the process of successful production of
products, technology has played a very important role in terms of systematic substitution of
equipment for people. For achieving the same higher standard, the careful planned use and
positioning of technology has supported each franchise into positive manner. When McDonald's
has entered into Russian market, then company has took into account that technology transfer
has helped the Soviet Citizenry to provide the long term benefits. It has been observed that
Soviet technologies has lagged behind western technology around fifteen to twenty years. The
new machinery from country of Holland was used to harvest potatoes in order to make French
Fries.
Technology has also helped the company in certain areas which includes lower waiting
time, lower staff costs, average order value and also increases the order accuracy as well.
Development in new mobile applications, acquisition of personalisation technology provider
dynamic yield, mobile order and pay also has contributed in terms of transforming the
experiences of customers around their restaurants. The new technologies and new inventions has
also made the company successful in terms of increasing their brand name and can also reach
towards every kind of customers in every corner of the world (Castaño and et.al., 2016). With
support system of technology, the operations working of the company has become faster and
effective due to which their way of delivering services and production methods also get
improved into positive spectrum. In this manner, technology has affected the business of
McDonald's at international level

Evaluate and describe in which manner the political environment considerations affect restaurant
of McDonald's international business decisions in the markets where they operate
Political environment played a very significant role in terms of international business of
McDonald's. It has been observed that multinational companies have to understand about
different political background across the regions of world. Each country has their own legal
system and when company approaches towards international level then they have to keep within
these into the legal systems(Geldres-Weiss and et.al., 2016).Within Russia, a legal issue has
occurred where a law has passed in Moscow that requires all stores to have Russian names or
they have to translate names into Cyrillic alphabet. It means that the company has to translate
their brand name. It has also occurred in Japan country where the pronunciation of its name has
changed to MaKudonaldo. It has been observed in Russia states that at least three quarters
majority vote is required to approve for significant decisions. The city council and
representatives of McDonald's have to agree on major decisions, that could hamper the
opportunities which is identified by the company. It is necessary to asses the legal environment
into positive manner so that it can be analysed that whether the launch of the product has
affected into a new country. It has been observed that there are many countries where
government and their rules and regulations have direct influence on the design of product.
It has been analysed that law is oftenly imposed on special product standards that
necessitate the kind, shape, components or even the brand name of a product used. The content
of promotion has also regulated by the government restrictions and regulations. The law also
restrict in terms of advertiser's freedom particularly which is concerned with the advertising
message and visual presentation as well (Hu and et.al., 2019).It has been observed that the kind
of country is involved and legal systems that takes place then promotional activities has also
changed accordingly. For instance, within China and France country door to door selling is not
allowed as it is prohibited in these countries. In the case of Germany country, better and best
words should be avoided due to which it create certain kinds of hindrance in terms of promotion
of products of McDonald's into particular countries.

There are certain countries who regulate the price system and the prices which are set for
certain products. Regulation of price also the another factor which company needs to be taken
into consideration when going at international level (Idris and Saridakis., 2018). In the Ghana
country, they have controlled the manufacturers profit margins due to which they indirectly
participate in terms of controlling the price paid by the customers. In this way, different countries
political environment and different rules and regulations of the government has impacted the
business of McDonald's at international level.
Explain and analyse the ecological considerations taken by the restaurant of McDonald's
restaurant affect their decisions of international business in the markets where they operate
At international level, it is very important for businesses to take into account the aspects
of ecological level so that they can positively contribute in terms of decisions of business in the
market. McDonald's product demand and type of product also depends on the physical terrain
and climate of a country which are significant environmental conditions. In the appraisal,
company has to consider the ecological aspects into serious manner so that they can do business
into successful manner. Products are majorly affected through altitude, humidity and relative
temperatures in the foreign markets. Another issue which needs to be taken into consideration is
about being environmental friendly nature. It has been observed that environmental groups has
forced McDonald's to reduce the use of Styrofoam packing and plastic as well.
According to internal market research of McDonald's it has been observed that the issues
of environment has neither positive nor negative impact on the sales of products. In order to
reduce harmful waste and unnecessary waste, company has agreed on to work with
environmental Defence Fund which is an environmental pressure group who creates awareness
among companies to use sustainable and recycled products(Verheyden and et.al., 2015). It is
important for McDonald's company to work into sustainable manner and also think about
environment so that they improve their operational working as well. They can also make plan for
using those products or raw materials which can't impact the environment into negative
spectrum. The decision making of company also depends on this factor that whether they have
analysed the country into positive manner or not because if the country is very concern about
environmental rules and regulations then they have to strictly follow those regulations and also
made changes in their products packaging and other related factors as well.

In this way, ecological aspects plays a very important role in terms of decision making of
company at international level.
CONCLUSION
The above stated report concludes that international business is very important in terms
of running an economy into smoother manner. The analysis of external environment is very
significant and it has also effect on strategic marketing planning. There are certain socio-
economic cultures which has effect on restaurant business at international level. It has been
determined that due to new technological developments it has improved the decision making and
the way of working as well. It has been concluded that the political environmental considerations
has also affected the business at international level. The different political backgrounds and
government decision has also impacted the sales of business. It has been analysed that the
ecological aspects are very important to run the business into sustainable and being
environmental friendly nature as well. At international level, it is important to consider all the
factors at international level of external environment so that company can easily enter into the
new market. If proper analysis has not been done then company has to face various kinds of
challenges and difficulties as well due to which it becomes challenging to stand strongly into the
market at international level.

REFERENCES
Books and Journals
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