Business Environment Report: McDonald's Operations Analysis

This report provides a comprehensive analysis of McDonald's business environment, examining the interplay of internal and external factors influencing its operations. The report begins with an introduction to the business environment, defining key concepts and highlighting the importance of strategic analysis for achieving competitive advantages. It then delves into the relationship between organizational functions, such as design and production, human resources, finance, sales, and marketing, and their impact on achieving organizational objectives. The report further explores the positive and negative impacts of the macro-environment, utilizing PESTLE analysis to assess political, economic, social, technological, environmental, and legal factors. This is followed by an examination of how the business environment influences decision-making, supported by a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. The report concludes with a synthesis of findings and a discussion of strategic implications for McDonald's.

Business and the
Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 and P2 covered in PPT......................................................................................................1
TASK 2...........................................................................................................................................1
P3. Relationship between organisational functions and objectives........................................1
TASK 3............................................................................................................................................3
P4 Positive and negative impact of macro environment on McDonald operation.................3
TASK 4............................................................................................................................................5
P5 Identification of environment and its influence on business decision making.................5
P6 Interrelationship of SWOT with external factors..............................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
.......................................................................................................................................................10

INTRODUCTION
Business environment includes two terms, one is business which is an economic activity
carried out by human being and second word is environment which includes large range of
factors which influence the organisation internally as well as externally. Every company have to
adopt various approaches which will help in achieving competitive advantages over its rivals.
For getting success in the market, management should evaluate that things which influence the
company in negative manner (Chavis, Klapper and Love, 2011). Firm should make strategy after
analysing all uncontrollable factors so that enterprise can move towards the success and can
attain its vision and mission statement easily and effectively. This project is based on McDonald
which is a public company and deals in fast food restaurant chain and second one is Burger king
which is a private company. It also deals in same sector. This report will explain about the
different types and objectives of organisations and their scopes. It will also state about the
different kinds of stakeholder whose activities influence the operation of company and impact of
macro environment on business. It will also carry out internal as well as external analysis of
selected firm by which it can identify its strengths and weaknesses.
TASK 1
P1 and P2 covered in PPT
TASK 2
P3. Relationship between organisational functions and objectives
In McDonald’s, there are large number of functions which are needed to be performed
effectively and efficiently as it aids in achieving the desired results or outcomes that are given as
below-
 Design and production- For getting attention of large number of people, company
should design their products and process in an unique way which will aid in attaining the
desired results effectually. McDonald’s make their goods or services according to the
culture that people of respective country follow where the firm is operating. This is the
reason; it is generating huge amount of profits every year. There are various factors
which assist in carrying out the production process as given below-
◦ Labour
◦ Capital
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◦ Materials
◦ Information, etc.
 Human resource function- It is the most important task in an organisation as it helps in
the success of company. It has main responsibility to hire the best qualified employees so
that they can perform their job according to the standards. McDonald’s has a large
number of employees who are well skilled and perform their job effectively. With the
help of this, company is able to achieve competitive advantages over its rivals. This
department also ensures that whether the organisation is following rules and regulations
or not. So, it is advisable to the firm that this department should have proper knowledge
so that it can contribute in achieving the specified objectives.
 Finance- It is also the most important function as no project can be completed without
having enough financial resources. If company wants to carry out its operations
effectively and efficiently, then it should have proper funds. If it business would not have
sufficient resources then it will create disturbance in the functioning of firm. So, finance
department should analyse the requirement of fund, and must allocate the budget to each
and every activity.
 Sales and marketing functions- Marketing department is helpful in identifying the
needs or wants of target market by which products are designed accordingly. With the
support of this, firm can easily serve to its consumers accordingly which will aid in
achieving the specified objective as if users will get services according to their demand
then they will be satisfied and would become loyal towards the firm.
 Administrative functions- It includes various types of tasks that have to be completed
by this department such as e-mail, complaints handling, etc. It also prepares various
documents related to business like newsletters, forms, etc. and also aids in maintaining
the organisation's premises and equipment
If McDonald wants to manage their operation easily and effectively then it should follow
a specified structure according to their requirements. It aids in maintaining proper coordination
among various activities by which organisation will be able to attain its specified result.
McDonald's organisation structure aids in managing market which is based on performance level
(Eisenberg and Miller, 2012). It follows divisional structure which has main motive to support
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autonomy and organisational flexibility. In this concept, functions are divided on the basis of
products or geographical areas. It has many characteristics which are given below-
 Global hierarchy
 Performance based division
 Functions based groups etc.
This framework is very helpful in monitoring and managing various activities that assists
in attaining the best desired result or vision statement in an effective manner.
TASK 3
P4 Positive and negative impact of macro environment on McDonald operation
Macro environment includes uncontrollable factors which influences the business
activities and also creates disturbance in running the firm. These elements are those which can
not be controlled by company such as political, economical, legal etc. These components may
influence the enterprise in positive as well as negative manner. McDonald can analyse these
elements with the help of PESTLE analysis which are given below-
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source 1: Organizational Structures, 2017

 Political- It is the most influential factor which may affect the company in positive and in
negative manner. Government plays an important role and its policies influence the
performance of brand. McDonald will also be influenced by this component when-
◦ Tax rates has increased.
◦ Imports and exports duty.
◦ New trade agreement such as NAFTA etc. have come which affects the brand
performance positively and negatively.
For fast food outlet, government has made some health policies which has main motive to
provide best quality of services to the customers (Hamilton and Webster, 2015). This strategy
affects the sales and revenue of the McDonald. When it will want to enter into new market then
this element will create disturbance but in this case it can take help of international trade which
will enhance global supply chains.
 Economical- This factor will influence to that organisation which is operating their
business at international level. It includes various things such as GDP, inflation rate,
unemployment, fiscal policy, current exchange rate, cost of labour etc. these all things
will influence the activity of company. For example- If in United Kingdom, there is
inflation situation then no one will take interest in taking services from McDonald
because in this condition, people have limited purchasing power.
 Social- It is the most influential factor which affects the growth of the company. It
involves various variables such as changing taste and preferences of people, their
lifestyles, attitudes, cultural diversity etc. While formulating strategy, McDonald should
consider this elements because it will aid in serving the consumers according to their
requirements. Specified firm is serving their services in various countries and every
nation have different cultures (Jayeoba, 2012). So it is advisable to the company that it
should prepare their food menu as per culture of target market otherwise it will not get
their objectives. Also McDonald is known as a socially responsible organisation because
it participates more in the development of the society like they announced backing to the
rainforest alliance.
 Technological- If an organisation wants to attract the customers towards its products then
it should adopt latest technology which will aid in providing better quality of goods or
services. McDonald adopts various types of channel for promoting their offers such as
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printed media, billboards, online etc. It also uses animated depiction for getting attention
from children like Hamburglar etc. It also hires well known celebrities for creating
awareness about its offerings.
 Environmental- This component influences the consumers as well as the performance of
the company. Before serving to consumers, McDonald should evaluate the environmental
changes and its impact on business activities so that it can take corrective action and can
attain its vision statement (Klapper, Lewin and Delgado, 2011). It is very important
element that should be keep in mind by the company while implementation of strategy. If
company will not do so then government can cancel its license. It should adopt that tools
and techniques by which pollution can be controlled. If firm will adopt latest technology
then it will increase its goodwill in the market.
 Legal- In United Kingdom, government has made too many rules and regulations which
have main motive to protect the rights of employer, employees as well as of customers. In
food sector, there are different kinds of laws such as Health and Safety law, Equity Pay
Act, Food Quality Related Act, Local health regulations, Consumer Protection Act etc. If
firm wants to carry out business activities smoothly then it should comply all rules and
regulations.
By conducting PESTLE analysis, business can explore new opportunities and can
identify advanced warning of threats. It will assist the company in making strategy which will
help in achieving the specified target with in period of time.
TASK 4
P5 Identification of environment and its influence on business decision making
Business includes large number of factors which influence the operations of company. It
is the duty of manager to identify these major elements so that organisation can attain its
specified result. In today competitive environment, to conduct analysis is very important because
it helps in taking corrective action by which company will get success in the market (Klapper,
Lewin and Delgado, 2011). McDonald can use SWOT analysis for analyse its internal
environment. This technique is very helpful in knowing about the strengths, weaknesses,
opportunities and threats which aids in achieving competitive advantages over its rivals.
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Selected organisation should consider this analysis while taking important decision. SWOT
analysis of McDonald is as follows-
 Strengths-
◦ It is a well established organisation in the world and is its business is growing rapidly.
◦ It has good brand image in food industry because of its qualities of foods and
services.
◦ Its logo is the most recognized in various countries specially amongst children.
◦ It has wide range of products or services with good quality.
◦ It was the one first food outlet that provides nutritional facts on their products.
◦ It involves in various types of projects which does social welfare. So it is treated as a
socially responsible firm.
 Weaknesses-
◦ More employees turnover which leads to increase cost because employer has to
conduct training programme.
◦ Less development of products.
◦ Decrease market share continuously.
◦ Reducing revenue and income growth.
◦ It has high initial cost.
◦ It is not able to satisfy the needs of consumer because of having inorganic and
processed food product.
 Opportunities-
◦ It can expand their business by providing organic food to those customers who are
health conscious.
◦ It can offers various discounts for getting attention of people.
◦ It can also attract to the individuals by conducting or sponsoring various events or
programmes.'
◦ It can provide extra services such as free internet because it will help in maintaining
consumers.
◦ It can start its new venture in uncovered area.
 Threats-
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◦ Its sales is largely depend on the economy of the nation therefore if economy will be
changed then it will influence the growth and sales of the company.
◦ There are huge competition in the market.
◦ In today environment, mostly people will become health conscious in which they do
not like junk food once they know its adverse effects.
All these are some essential points which represents that management have to depict such
strategies which aid them in their growth. Like they have to invent new products and deal with
new items which support them in their business. Also, they have to serve new range of products
which attract new customers. Along with that their product have to get manufactured according
to requirement of time and climate (Krishnan, 2013).
P6 Interrelationship of SWOT with external factors
SWOT analysis is very helpful in the growth of the company because with the help of
this analysis, manager can make effective strategy by which organisation is able to get success in
the market.
Strengths- For attaining competitive advantages over its rivals, it is necessary that
organisation should identify its strengths and weaknesses because it will help in dealing with
external factors. As per this, McDonald has good brand image and value in the market from
many years which supports in carry out business activities effectively and efficiently. As per this
management have to link this concept with external analysis.
 Political environment influences the strengths of company because new government
implements new policies for controlling the critical situation which are not favourable
multinational company. Hence, organisation has to change their guidelines according to
new status or policies and thus their working get affected.
 Changing in technology is also very influential factor because if in the society, new
technique is introducing then enterprise also has to adopt it for getting best desired result
(Love, 2011). If it will not update it then people will not purchase its products or services.
 All customers have to take in account by cited company and entity have to manufacture
new products according to them. Also taste and preferences of customer also get changed
very rapidly. This is related with environment factor of PESTEL.
Weaknesses- Lack of stability can only occur if management do not operate their
strategies properly. Management have to work on all of their weakness so that they can survive
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in market for long term and can attain its specified result or outcome within specified period of
time.
 In United Kingdom, there are large number of laws and legislation which have to follow
by every organisation because it will aid in removing all drawbacks from the enterprise.
If it will not follow acts then it will become its weakness because no employees will get
equal rights either they will leave the company or will not perform according to the
standards and then company will not be able to get competitive advantages over its rivals.
 Economical factors also relates to weakness because if economic condition of company
will not be good then it will not be able to generate desired result or outcome. Sales of
McDonald is totally depend on the economic situation of the country (Macdonald, 2012).
CONCLUSION
For getting success in the market, organisation should maintain good working
environment so that employees will be motivated and will perform effectively and efficiently.
From the above report, it is concluded that there are various types of organisations which have
different objectives such as public which has motive to do social service with earning profit
while private company has target to maximize sales, market share etc. In an enterprise, there are
numerous types of functions that have to performed for getting better result such as design and
production etc. For internal and external analysis, McDonald can use SWOT and PESTLE
analysis by which it can know about the factors that may create disturbance in business opertion.
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REFERENCES
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greenhouse gas emissions reporting in a market governance system: Australian
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