University Name - MGT501 Business Environment: Stakeholder Analysis

This report provides a comprehensive analysis of internal and external stakeholders within the context of the fast-food industry, using McDonald's as a case study. It begins with an executive summary and an introduction to McDonald's, highlighting its history and market position. The main body identifies functional areas within McDonald's and explores the roles of both internal and external stakeholders, including employees, customers, investors, suppliers, and the government. It delves into the nature and degree of stakeholders' interests, examining potential conflicts and their implications. The report also assesses the level of influence each stakeholder group holds, utilizing Porter's Five Forces analysis. A stakeholder matrix is created to visually represent the relationships and influence levels. Furthermore, a comparison between the manufacturing and hospitality industries is provided to highlight the unique aspects of stakeholder management. The report concludes with a summary of the key findings and insights gained from the analysis.

Running head: INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
Name of the Student:
Name of the University:
Author Note:

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
Table of Contents
Executive Summary...................................................................................................................2
Introduction and background information of chosen business:.................................................2
Main body..................................................................................................................................3
Identify functional areas:............................................................................................................3
Identify internal and external stakeholders and their roles........................................................3
Identify the nature and degree of main stakeholders’ interests, and implications of conflicting
interests:.....................................................................................................................................5
Identify the level of main stakeholders’ influence:....................................................................7
Create a stakeholder matrix:.......................................................................................................8
Comparison of manufacturing and hospitality industry:............................................................9
Conclusion:..............................................................................................................................10
References:...............................................................................................................................11

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
Executive Summary
The aim of this report is to discuss the importance of the stokeholds in the successful business
scenario. It is the stakeholders group that help the companies to find out perfect and ethical
ways to operate on a market. This paper has discussed the stakeholders associated with the
Fast food chain industry namely McDonald’s. It has analysed how the stakeholders groups
can influence the growth of the business. This paper has also contrasted the operation and
stakeholders of McDonald’s with the hospitality service by Hilton Hotels to understand the
differences of these two industries.
Introduction and background information of chosen business:
McDonald’s is a fast food company based in America which was founded in the year
1940 founded by Richard and Maurice McDonald in California. McDonald’s is the largest
restaurant chain of the world by revenue that service more than 70 million customers each
day in more than hundred countries (Mcdonalds.com.au 2019). McDonald’s is best known
for its French fries, hamburgers and cheeseburgers. The feature breakfast items and soft
drinks along with desserts. By responding the changing customer tests and changing ideology
about in taking healthy food this company has perfectly catered its stakeholders for more than
70 years. This is the fourth largest private employer after Walmart. The company has
different business model for different countries. In order to match the Expectations of the
stakeholders and again the best of the market the company has try to adapt the organisational
and national culture of that country. For example the business model of McDonald’s in the
US market is completely different from that of the United Kingdom or the other Asian
countries. By bringing changes in the food items variations and making those more local the
company has effectively created a lawyer base of customer that mainly support this company
for their quality and efficiency.

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
Main body
Identify functional areas:
McDonald’s has been operating in the food and beverages industry for a long time and
created its brand reputation in such a manner that most of the developed and emerging
countries have McDonald’s outlets in the big cities . McDonald’s has become the Emblem of
globalisation therefore sometimes referred to as Mcdonaldization of society. the operation of
McDonald’s is search extensive that the economic situation for purchasing power parity is
judge depending upon the big Mac index which is a product very popular produced by
McDonald’s. The industry in which McDonald’s operates is Fast Food Industry which
incorporates product as well as service to the customers and other stakeholders. The corporate
social responsibility is served by McDonald’s at its best. It has utilised Technology and other
external environmental factors in such a manner that the claims and Complaints against this
company’s operation is minimal.
Identify internal and external stakeholders and their roles
For understanding the stakeholders of McDonald’s that operates in the fast food chain
industry it is important to analyse the factors related to the theory of PESTLE and porter’s
five forces show that the internal and external environmental factors become clear and how
the operations are affected by these stakeholders of the company can be clearly understood.
PESTEL analysis relates to the political economic social legal technological and
environmental factors that highly depend upon the operations of the company and the
interests of the stakeholders. The political factor directly relates to the government as the
external stakeholder of the company that changes the corporate policies and create pressure
for avoiding by some new on modified tax system for laws relating to export and import of
goods (Yang, Zou & Wang, 2016). Both local as well as International government policies

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
are important for McDonald’s because it has branches in all around the world. Therefore they
need planning permission for new buildings and expansion of the old stores. The national
government in this aspect will allow the right things to happen. The changes in the
government lead to changes in the policies and laws therefore the corruption level may affect
the business of McDonald’s.
The economic factors are related to the suppliers as the external stakeholders and the
investors as the internal stakeholders of McDonalds. The suppliers of the company important
and play vital role because they provide the materials needed for the production of the
company. The supplier’s interests are the supply of materials and gaining profit for their own
business (Noe et al., 2017). Along with this, the suppliers want to have good reputation as
they are connected with a global company with so much positive reputation. The economic
factors also include the investors who you include profitability and growing revenues of the
company. McDonald’s has assured a stable growth. By providing different types of products
and services to the customers the company is trying to return the profihet to the investors.
In the social aspects of the company’s operation, the employees, customers and the
communities are directly connected. The employees are motivated by the wellbeing approach
of the company and show respect to the policies of their organizations (Zhu, Anagondahalli
& Zhang, 2017). The national culture of the country however create impact on the
organizational culture of McDonald’s therefore, the organisation tries to manage their
employees in such a way that there is no scope for dissatisfaction. In addition to this the job
opportunities based on skilled education is the responsibility of the government therefore, the
more the society will be educated the more skilled the employees will be (Vracheva, Judge &
Madden, 2016). McDonald’s attempt to find out markets where the labours are cheap or
inexpensive yet skilled to meet the organisation’s demand.

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The social factors also include the standard of living of the customers. The higher the
standard of living will be of the customers, the more they will be able to buy the expensive
products of the company. As the customer is the most important stakeholders group that
determines production and service capabilities, the company bring variation in their products
and services so that these can cater the needs of the clients and a loyal case of customers on
the international basis can be developed (Rajablu, Marthandan & Yusoff, 2015). Based on the
customers’ demands and regionalism, the organisational changes take place.
The technological factors related to the growth of McDonald's is associated with the
development of the government policies, competitors and the suppliers operations. The
government invests in the development of technology of a country which helps the company
to utilise automation in the production system as well as in sales. The competitors will use
information technology for giving customer services impact on the preferences of the
customers as they get more efficient facilities from the competitor companies stuff similarly
when McDonald’s will get the technological help from the government it can enhance its
ability for customer service through online system and automate the production of food
faster. Similarly the technological system is helpful for transportation of goods which Hills
the company to satisfy the suppliers and vice versa (McDonald, 2015). The environmental
factor has become one of the most important aspect of Sustainable growth and ethical
operation of the companies. The communities of McDonald’s take care whether the company
is following proper corporate policies for waste management reduction of using natural
ingredients and supporting the local communities through corporate social responsibilities.

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Identify the nature and degree of main stakeholders’ interests, and implications
of conflicting interests:
The main stakeholders of McDonald’s are employees’ customers, investors and communities.
Employees tops the stakeholder group because they are associated with the overall growth of
the company. The corporation include career development plan and programs as well as fair
compensation. McDonalds addresses the interests of the employees through number of
development training programs for the overall growth of employees as they are the chief asset
of McDonald’s. The company runs Hamburger University which is a kind of training facility
for the employees. Moreover McDonald’s has Global mobility policies that support the
leadership development in the managers. The company pays low wedges almost down to the
legal minimum age to the workforce which make the employee unions to demand for higher
wages. This create conflict among the company’s management and this particular group of
stakeholders.
The customers at the second priority stakeholder Groups for McDonald’s. The chief aim of
this interest group is to have affordable as well as healthy food choices. However
McDonald’s insurance that their products are affordable as they follow standardization
process and supply chain streamlining. The conflict of interests here is fuelled by the health
effect of its fast food. Therefore the responsibility towards the customers is partially satisfied.
The investors are one of the major and effective stakeholder Groups for the operation of
McDonald’s. This group into who get the returns of their investment properly as well as the
profitability of the business with growing revenues. McDonalds has addressed this concern
by developing a stable business operation. Despite the fact that McDonald’s has a low growth
rate but initiatives are being taken to heighten the shares. Through introducing new products
like my Cafe and other popular products have addressed this interest of the investors
therefore the responsibility towards is group of stakeholder is completely satisfied. Finally

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
the community’s r are interested for having community development programs and
environmental support. The company has support programs and sustainability goals for this
stakeholder group. It runs different types of charities in different parts of the world to provide
financial support for the families in problems. The form has initiated policies to prioritise the
sustainable production and waste management. The McDonald’s Global best of green
recognises innovative environmental contributions. Thus McDonald’s has initiated corporate
social responsibility programs and supporting the stakeholders only the communities of the
local area where it operates.
Identify the level of main stakeholders’ influence:
The main stakeholders are the customers, employees, competitors, suppliers and the
government whose influence can be understood through the discussion of porter’s five forces
analysis. The company has a long history and reputation that creates barrier for entry. This
reduces threat for competitions. The level of influence of the competitors therefore is low.
The competitive rivalry is different in different market. For example the market of the US is
highly concentrated with the fast food chain brands with similar products therefore theatre of
substitution is also high (Vidaver-Cohen & Brønn, 2015). Therefore the customers get the
power to influence the production process and quality of the products. In addition to this, the
price sensitivity also empower the customers to influence on the production and service of the
company. The suppliers in the case of McDonald’s operation is not so influential. As the
company has expanded in the global market, it gets the opportunity to dominate the suppliers
of particular regions where it operates.

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
Figure 1. Porter Five Forces
(Source: created by author)
Create a stakeholder matrix:
Stakeholder
s
Contribution Influenc
e level
Actions
Employees Contribute their skills and
expertise to profit growing
and expansion
High Creating scope for personal and
professional growth of the
employees of the organostions.
Giving financial and health
security to keep them
motivated
Customers It is the most important
stakeholders group that
determines production and
service capabilities.
Based on customers’
demands the organisational
changes take place
Highest Proper understanding of the
demands ad expectations and
introduce new and modified
product and service
Community Judges whether the company
is operating ethical ways
Medium Creating transparent policies
and operation of the company
so that no question of ethical
Competitive
rivalry
Threat of
new entry
Buyer power
Threat of
substitution
Supplier
power

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
gap can hamper the reputation
Suppliers Supply all the needed
materials for production and
service
Medium Enhancing relationship
measures to develop a
responsible and loyal base of
suppliers
Government Changes corporate policies
and create pressure for
abiding by new or modified
tax system or export and
import of goods
High Following all the rules and
regulations associated with
corporate system
Competitors Create pressure on the
company to enhance the
quality or reduce price
low Maintaining good relation with
rival companies.
Following trends
Imitate effective technology.
Comparison of manufacturing and hospitality industry:
The stakeholder groups associated with the Hospitality Management are completely different
from the stakeholder groups of the fast food chain industry. Despite the fact there are
similarities in external and internal stakeholder factors but their interests are completely from
one another. Hilton Hotel chain is one of the largest hotel organisations in the world that has
been operating in the global market for a long period of time and has a dependable base of
customers. The tangibility of the products is the first and foremost factor which differentiate
these two companies (Tarhini et al., 2015). Hilton hotels chain offers services to their
customers which cannot be touched but the physical food and beverages offered by
McDonald’s show direct understanding and popularity of the company. The physicality of the
items provided by McDonald’s is easy to criticize and praise instantly but the service industry
like that of Hotel chain of Hilton cannot be judged or proved appropriately by the
stakeholders.

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
The size of the first food chain industry is smaller than the hospitality because in
many countries the acceptance and development of fast food chains unpopular. On the other
hand most of the countries in this world have tourist attractions which help the hospitality
industry to flourish more effectively. However the first food chain industry can respond to the
market demand forecast more easily but the service industry cannot serve the customers until
and unless they ask for it. Along with the customer group of stakeholders the employee
stakeholders are also different in these two industries. The employees in the McDonald are
more efficient in in gaining knowledge about the products provided by the company they are
also so well acquainted with providing services to the customers. On the other and Hilton
hotels does not manufacture any product there for the employees only get the skills of serving
their clients. Therefore the first food chain industry expects the employees to be more skilled
which can help them to improve their products and services (Peek et al., 2016). Therefore the
influence of employees on the fast food chain industry is higher than that of the hospitality
industry. The government rules and laws is more pressing for hotels because it is associated
with the tourism market which in times become the one and only source of income for the
governments. This is not so effective for the fast food chain industry.
Conclusion:
Therefore it can be concluded that McDonald’s has effectively catered all the demands of
their stakeholders. However there are some criticism regarding the products and services of
McDonald’s but in most of the cases the company has won the heart of the customers and
maintain a good relationship with the other stakeholders like suppliers, competitors and the
governments. By solving issues of the community development and providing scope for
employability and training to the people of community where the company has been
operating the company has satisfied the community stakeholders along with its employees as
well as customers.

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INTERNAL AND EXTERNAL STAKEHOLDER ANALYSIS
References:
McDonald, K. J. (2015). Beyond requirements: analysis with an agile mindset. Addison-
Wesley Professional.
Mcdonalds.com.au (2019). Our Story | About Macca's | McDonald's AU. [online]
Mcdonalds.com.au. Available at: https://mcdonalds.com.au/about-maccas/maccas-
story [Accessed 3 March. 2019].
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.
Peek, S. T. M., Wouters, E. J., Luijkx, K. G., & Vrijhoef, H. J. (2016). What it takes to
successfully implement technology for aging in place: focus groups with
stakeholders. Journal of medical Internet research, 18(5), e98.
Rajablu, M., Marthandan, G., & Yusoff, W. F. W. (2015). Managing for stakeholders: The
role of stakeholder-based management in project success. Asian Social Science, 11(3),
111.
Tarhini, A., Ammar, H., Tarhini, T., & Masa’deh, R. E. (2015). Analysis of the critical
success factors for enterprise resource planning implementation from stakeholders’
perspective: A systematic review. International Business Research, 8(4), 25-40.
Vidaver-Cohen, D., & Brønn, P. S. (2015). Reputation, responsibility, and stakeholder
support in Scandinavian firms: A comparative analysis. Journal of Business
Ethics, 127(1), 49-64.

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Vracheva, V., Judge, W. Q., & Madden, T. (2016). Enterprise strategy concept, measurement,
and validation: Integrating stakeholder engagement into the firm's strategic
architecture. European Management Journal, 34(4), 374-385.
Yang, R. J., Zou, P. X., & Wang, J. (2016). Modelling stakeholder-associated risk networks
in green building projects. International journal of project management, 34(1), 66-81.
Zhu, L., Anagondahalli, D., & Zhang, A. (2017). Social media and culture in crisis
communication: McDonald’s and KFC crises management in China. Public Relations
Review, 43(3), 487-492.