Business and the Business Environment Report - McDonald's Analysis

This report provides a comprehensive analysis of the business environment, focusing on different organizational types (public, private, and voluntary) and their purposes. It examines the size and scope of various organizations, including McDonald's, H&M, and Oxfam, detailing their missions, visions, and corporate values. The report explores the interconnection of organizational functions such as production, sales, finance, human resources, marketing, and research & development, highlighting their relationships and impact on organizational objectives. Furthermore, it applies PESTLE and SWOT analyses to McDonald's, identifying the impact of macro-environmental factors and internal strengths and weaknesses. The analysis concludes by demonstrating how these strengths and weaknesses relate to external factors, providing a holistic view of the business environment and its influence on organizational performance.

Business and the Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1. Different types of organization public, private and voluntary and their purposes,...............3
P2. The size and scope of a range of different types of organization..........................................5
TASK 2............................................................................................................................................7
P3. The relationship between different organizational functions and their interconnection with
organizational objectives.............................................................................................................7
TASK 3............................................................................................................................................9
P4. PESTLE analysis of McDonald's .........................................................................................9
TASK 4..........................................................................................................................................10
P5 SWOT analysis of McDonald's ...........................................................................................10
P6. Strengths and weaknesses of organization interrelates with external macro factors...........12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business environment consist of internal and external factors that impact a business organization.
Business environment is helpful in identifying business opportunities and threats. By analyzing
business environment organization can improve its overall performance. The project report will
outline the different types of organization like public, private and voluntary and their purposes.
The report will further explain the size and scope of different types of organizations. The report
will explain the relationship between different organizational functions and their interconnection
with organizational objectives and structure. The report will do Pestle analysis and will identify
negative and positive impact of macro environment factors upon business operations. The report
will further do Swot analysis to identify strengths and weaknesses of organization. Lastly the
report will explain how strengths and weaknesses interconnect with external macro factors.
TASK 1
P1. Different types of organization public, private and voluntary and their purposes,
Private organization – McDonald's
McDonald's is American fast food company. The McDonald's is founded on 15 April
1940. McDonald's is operated by Richard and Maurice McDonald's. The headwaters of
McDonald's were situated in the Chicago, Illinois in United Kingdom. The McDonald's was
started initially as a hamburger but the later company turns into franchise. McDonald's is the
renowned largest restaurant chain in the world.
Purpose – The purpose of McDonald's is to make customers favorite place to eat and drink. To
serve the customers with Delicious and tasty food (Deasy, S., Meyer, R., and Strudel, 2016). To
provide better services to the customers and to make continuous improvement in their business
operations to enhance their customer's experience.
Objectives –
• The objective of McDonald's company is to serve fresh food with simplicity.
• To do continuous improvement in their food products.
Legal structure – McDonald's has a hierarchical corporate structure. It consists the chief
executive officer which is followed by chairman of the board. CEO operates the legal and
secretaries department of McDonald's. The Legal and secretaries department looks-after the
Legal laws, procedures and polices of the company.

Public organization - H&M
H&M is a Swedish multinational clothing retail company. It is known for fast fashion
clothing for men, women children and teenagers. The Company was established in the year 1947
about 72 years ago. The founder of H&M is Erling Persson. The headquarters were situated in
the Stockholm, Sweden. H&M is public limited Company that is listed on NASDAQ Stockholm.
Purpose – The purpose of H&M is to build demand for sustainable clothing. That ensures that
they maintain their accessible points (Hamilton and Webster, 2018). They are looking for annual
innovation and bringing up new ideas in their products to generate the better solutions in order to
make fashion circular and to protect the planet earth.
Objectives –
• The objective of H&M is to provide availability of sustainable fashion and design in their
garments to their customers.
• The objective is to educate their customers in order to take care of their garments to
protract their lifespan.
Legal structure – The H&M legal structure consist of various department like production,
finance, marketing, sales, legal and product development. The legal department looks afters that
the H&M is following laws and proper guideline of government or not. The legal department
also controls and insures that marketing department is following proper advertising laws and
code of conduct.
Voluntary organization – Oxfam
Oxfam is a charitable organization. The Oxfam was founded in the year 1942. The
Oxfam was founded by Cecil Jackson-Cole at Oxford, England. The executive director of Oxfam
is Winnie Byanyima. The Oxfam focused on alleviation of poverty at global level. The
headwaters of Oxfam is situated in Oxford in United Kingdom.
Purpose – The purpose of Oxfam is to create long lasting solutions to the injustice of poverty.
The Oxfam is working to empower the people in order to create a future secure that is free from
poverty (Kolk, 2016.).
Objectives -
• The objective of Oxfam is to end the injustice of poverty. The Oxfam runs the several
programs to overcome the poverty.
• The objective of Oxfam is to change the way people thinks about poverty and its causes.

Legal structure – The Trustees of Oxafam is mainly responsible for the law of charity in order
to conduct activities of Oxfam and to manage its assets. The council of Trustees of Oxfam is the
governing body of the Association of Oxfam which is a non-profit limited liability company.
P2. The size and scope of a range of different types of organization.
Private organization – McDonald's
Mission – The McDonald's mission is to become customers favorite place of eat and drink. The
McDonald's operations are aligned around a global strategy which Plan to Win exceptional
customer's experience.
Vision – The McDonald's vision is to move with velocity to drive profitable growth and to
become even better franchise that serve more customer's by providing delicious food around the
world.
Corporate values -
• The McDonald's believes that their customers are the reason for their existence.
• The McDonald's are remained committed to their people.
• The McDonald's believes in their Business model that depicted by three legged stools
namely, owners, suppliers and Company's employees (Pearson, 2017).
• The McDonald's operates business efficiently. They follow up ethics of the business.
• The McDonald's strives for continuous improvement in their food products.
Size – The McDonald's has total 37,855 restaurants spread widely at different countries all over
the globe. The McDonald's has total 210,000 employees that serve customer's with delicious
food items all over the globe. The McDonald's worldwide revenue is 21.03 billion US dollars.
The McDonald's revenue from worldwide operated restaurants is 10.01 Billion US dollars.
Scope – The Scope of McDonald's is wider in terms of expansion of their business. The Scope of
McDonald's is narrow in terns of customer's base and they have low cost strategy.
Public organization – H&M
Mission – The mission of H&M is to drive long lasting positive change in customer's products
and to improve living conditions of people by investing in communities and bringing up
innovative ideas.
Vision – The H&M believes in sustainable fashion and design that should be make available to
each customers. The H&M vision leads company towards the change that is circular and drives
fashion industry in order to produce renewable products.

Corporate values -
• To be integrated, honest and keep their promises get fulfilled through their business
actions.
• To work safely and effectively and to create strong ethical values in their business.
• To be compassionate and show commitment towards their business work.
• To drive business with responsibility and accountability.
• To do continuous improvement in their product quality by upholding team spirit in their
business.
Size – The H&M has total 4,351 stores spread widely all over the globe in 64 markets and have
35 online markets. The H&M has total 171,000 number of employees.
Scope – The H&M has a global scope around 40 countries in which they are operating stores and
production. They have scope of online market in United Arab, Emirates, Kuwait, Egypt and
Qatar.
Voluntary organization – Oxfam
Mission – The mission of Oxfam is to make world free from poverty. To work for poor people in
order to alleviate poverty from the people's lives and save people from injustice.
Vision – The Vision of Oxfam is to make world safer and secure place to live. The vision is to
safeguard the women's rights.
Corporate values -
• To empower everyone who involved in the work of Oxfam like staff and supporters.
• To create accountability and take responsibility of their actions.
• Oxfam show inclusiveness to create open communication channel in order to embrace
diversity.
Size – The Oxfam has a confederation of 20 independent charitable organization that are
working in more than 90 countries. The Oxfam has 5,000 employees and has 23,000 volunteers
all over the globe.
Scope – The Oxfam has wider scope all around the globe to find practical, innovative ways for
the people to lift themselves out of poverty line in order to save lives and help to rebuild the
livelihoods.

TASK 2
P3. The relationship between different organizational functions and their interconnection with
organizational objectives.
Relationship between different organizational functions of McDonald's
Production function with Sales function – Production function of McDonald's looks after the
manufacturing and operational activities of the food products. The production function of
McDonald's is connected with the sales function if the total food quantity is not produce on
timely basis then the sales has to face shortage. The Sale functions couldn't work properly if the
production function fails to produce required quantity of food items. The Sales function is miss–
managed without the production function. The production function is responsible for inventory
management.
Finance function with Human resource and Marketing function – The Finance function is
responsible for providing enough funds to various department of McDonald's. The Finance
function is related to Human resource function. The finance function provide salaries and wages
to the Employees and workers of McDonald's on timely basis. This leads to employees
satisfaction (Evans, Vladimirova and Barlow, 2017.). The finance function also provide enough
funds to conduct marketing function of McDonald's. Promotional and advertisement activities of
McDonald's generally occurs high coasts and expenses, so it is responsibility of finance function
to provide enough funds to marketing function of McDonald's.
Sales function with marketing function – The Sale function of McDonald's is managing re-
ignite sales growth by launching the Fast food Convenient campaign for radical adjustment of
the Company. The Sales function is connected with the marketing function. Sales depends upon
how marketing of food products is done in the McDonald's. Sales of McDonald's food product is
increased by marketing and promotional activities.
Human resource with Production and Sales function - The Human Resource function of
McDonald's is connected with the Promotion and Sales function. The Human resource manager
is responsible for managing the employees and workers to do production of McDonald's food
items in efficient and effective way. The human resource function tactfully manage the
manpower in one direction to achieve the targeted production results of McDonald's.
Marketing function with Sales function – The marketing function of McDonald's do
promotion and advertisement of McDonald's food products through publishing articles in

newspapers and telecasting advertisement on television. This leads to increase the sales of
McDonald's food products. Marketing function is done to increase the sales function output.
Research and development function with Production and Sales function – The Research and
development function is interlinked with production function and Sales function. The production
function produce the food products of McDonald's in accordance to research and development
function. The research and development function brings innovative ideas and technology that is
helpful in producing food products even faster and if the innovative products are introduced in
the market this will impact the Sales function which lead to increase the sales of McDonald's
food products.
Organizational functions links to organizational objectives
Production function – The production function fulfills the organizational objective of
McDonald's by doing inventory management it is also one of the objective of McDonald's to
provide timely availability of food products to the customers.
Sales function – The Sales function is helpful to achieve the Organizational objective of
McDonald's by increasing the sales it drives the McDonald's Company towards the profitability.
Marketing function – The Marketing function is helpful to achieve the Organizational objective
of McDonald's by increasing the sales, one of the objective of McDonald's is to increase the
market share.
Research and development function – The research and development function of McDonald's
is helpful in achieving the Organizational objective of McDonald's which is customer
satisfaction. By doing research one can identify the market trend and analysis the current demand
of the customers and by providing innovative products to the customers it leads McDonald's
towards the Customer's satisfaction.
Organizational functions links to Organization structure
The McDonald's has hierarchical business structure so it directly interlinked with the
Organizational functions. It consists various divisions and further subdivided in different
organizational function.
Human resource function is connected to Personnel divisions – The personnel division is
connected with human resource function like CEO and Middle managers are directly connected
to Employees and staff. The middle managers provide direction to the employees to perform in
efficient and effective manner in McDonald's organization.

Production and Sales function is connected to Performance based division – The production
and sales function is connected with performance based division in which they are dependent on
Supply chain. Supply chain management is necessary in McDonald's for acquiring raw materials
and to proceed or transfer them to Production function for conduct smooth operations in
McDonald's. Supply chain management is helpful for sales function to distribute the final food
products of McDonald's to the customers.
TASK 3
P4. PESTLE analysis of McDonald's
It is a framework that is used to analyse the external factors of the environment. It
includes political, economical, social, technological, environmental and legal factors. Before
entering into the global market all these factors affect the working of the company.
Political Factors
These factors play an important role in determining the impact of external factors that can
affect the working of the McDonald. As McDonald is a retail company that provide services to
different countries so different countries is having different political condition that affect the
functioning of the McDonald These factors include political stability or instability, corruption,
foreign trade policy, labour law and environmental law of the country. If there is a political
instability it will affect the functioning of McDonald (Song, Sun and Jin, 2017). Labour laws are
different in every country so McDonald have to adopt the laws of that country in which it is
operating its business. As changes in the tax policy will impact the export and import of the
country that will directly affect the working of the McDonald.
Economic Factors
These factors include economic growth, inflation rates, interest rate etc. These factors is
having the direct or indirect impact on McDonald. In case of inflation the prices are rising that
will affect the functioning of the company. Exchange rates also bring a drastic change in the
condition of the company. These rates affect the foreign direct investment in McDonald. If the
economic condition of the country is not good then it will affect the demand and supply of
McDonald (Nurmi and Niemelä, 2018).

Social Factors
These include lifestyle, attitude, values, growth rate, customs etc. All these factors affect
the culture of McDonald. As lifestyle is different of every country so McDonald have to made
products according to the customers that is liked by them. As culture plays an important role in
every company so McDonald have to change accordingly that will increase the operation cost
which is a loss for the company. If the people of the country are not skilled then it will affect the
functioning of McDonald and the company have to invest more money on training and
development of the employees.
Technological Factors
These include the innovation, automation, research and development, technological
changes etc. These factors affect the decision whether to enter or not enter into the market.
Changes in the technology will affect the functioning of McDonald. As changing the technology
will impact on operation cost as McDonald have to make changes in the technology that is being
used currently (Kara, 2018).McDoanld have to invest the money on research and development
that will impact on company's operating income.
Environmental Factors
These include weather, climate, environmental changes etc. As these will affect the
availability of raw material if the raw material got damaged because of the weather then it will
impact on production of McDonald.
Legal Factors
These include laws that are discrimination, employment, consumer protection, health and
safety laws etc. Before entering into the market McDonald has to know about the laws that are
being implemented in the country. As different countries is having different employment laws so
McDonald have to follow that laws. As going data of the company is illegal in some countries so
McDonald have to be careful that the data is not going outside (Pan, Chen and Zhan, 2018).
TASK 4
P5 SWOT analysis of McDonald's
These are the internal and external factors that organization have to identify that helps in
competing in the market. These are Strength, Weakness, Opportunity that help is used in forming
the strategic planning for the company.

Strength
The biggest strength of McDonald is it has the largest fast food franchise in the UK. As it
is having higher sales as compared to the other competitors. The annual operating profit of
McDonald is increasing day by day. It also has the largest market share than the other
supermarkets. Number of stores is also increasing worldwide. As McDonald has wide variety of
stores that are providing the different services to the customers. It also deals with the wide range
of products with diversified product selling in the market (Mkude and Wimmer, 2015).It is using
the best technology in manufacturing the product that attract more customers and that will lead to
increase in the profit.
Weakness
It is failed in operating the business in Japan and America so it has to close its store from
there. McDonald is charged with the fine because of using the wrong accounting that will lead to
wrong calculation of profit. McDonald is using the low cost strategy to sell its product but that
will lead to decrease the profit margins. McDonald's some stores do not performing good so the
expert suggest them to do market research then enter into the marketplace.
Opportunity
McDonald introduces its new discount store that will help in the growth of the business.
As it is the opportunity for McDonald to grow by lowering down the prices of product. It is
building the relations with other brand also that will help in attracting more customers towards
its product (Bohari, Hin and Fuad, 2017).As McDonald is not able to perform good in Japan and
America if it came into the joint venture with other company of that country then it will be an
opportunity for McDonald to start its operation again. It can also provide online selling of
product to its customers that enhances more opportunity in the global market.
Threat
Competitors are the biggest threat for McDonald as there is lot of market competition. As
McDonald is using the fake brand name and sell its product in the market that will become the
big issue for the company to settle it down. It faced problem in launching advertisement at the
time of Christmas. Economic crisis in the country will affect the performance and efficiency of
doing work. Changes in the technology by other new entrant will also affect the working of the
company (Phadermrod, Crowder and Wills, 2019).As nowadays consumer is shifted towards the

online shopping so that is another threat for McDonald that will impact the sales. If there is
stability in the market then more new entrant come that will be threat for McDonald.
P6. Strengths and weaknesses of organization interrelates with external macro factors.
Strengths of McDonald's
• The strength of McDonald's is that they have the largest food franchise all over the world
it is related to the Political factor. The political stability in UK promotes the McDonald's
to expand their business.
• The strength of McDonald's is that they have strong product offering and have good
brand image in the market it is related to the Technological factor. The upgraded
technology and advanced productive machines facilitates the McDonald's to make their
food products fast and helps the McDonald's to offer different product's variety to their
customers (Deasy, Furodet and Emil, 2015).
Weaknesses of McDonald's
• The weakness of McDonald's is that they have limited range for vegetarians and vegans it
is related to Social factor. The Social factor impacts the lifestyle choice and preference
in food products. In most of the countries people are more likely to consume non
vegetarian food items. It is hard task for the McDonald's to produce for fewer people
which consumes Vegetarian food products.
• The weakness of McDonald's is that there is no alternative to french fries in UK it is
related to the Legal factor. In UK people are more health conscious and there are health
and safety laws of consumers. Oily french fries leads customers towards obesity so Fast
food is band in UK.