Analysis of Business Environment Factors for McDonald's Company

This report provides a comprehensive analysis of McDonald's business environment. It begins with an introduction to the concept of the business environment and its significance for a company's operations. The core of the report applies the PESTEL framework (Political, Economic, Social, Technological, Environmental, and Legal factors) to assess how these macro-environmental forces impact McDonald's. Each factor is examined in detail, highlighting both positive and negative impacts on the company. The report then moves on to an internal and external analysis, employing the SWOT framework (Strengths, Weaknesses, Opportunities, and Threats) to evaluate McDonald's strategic position. The report identifies the company's strengths, such as its global presence and wide variety of products, and weaknesses, such as negative health image. Opportunities for market expansion and threats from competition are also discussed. The conclusion summarizes the key findings, emphasizing the importance of understanding the business environment for success. References to the sources used in the report are also included. The report highlights how both internal and external factors influence an organization and impact its profitability.

Business and
Business
Environment

Introduction
Business Environment consist of all factors that enables to operate a
business smoothly.
For smooth function of business every attribute plays a crucial role
such as finance for that organisation have to depend on financial
institutions.
To operate smoothly in society organisation, have to depend on society
and for proper market conditions they require market.

PESTEL ANALYSIS
PESTEL analysis is abbreviation of Political, Economical, Social,
Technological, Economical and Technological.
It helps in determining how these factors affect business and its
performance in long term.
McDonald is American fast food and beverage company which is
founded in 1940 by Ray Kroc and George Yang.

Cont....
McDonald is given, which help in understanding impact of macro factors
on business:-
Political factor
Economics factors
Social factor
Technological factors:
Environmental factors:
Legal factors:-

POLITICAL FACTOR
● Positive impact ● Negative impact
● Through it McDonald can increase
international trade agreements.
● Enable respective organization to
identify business opportunities and
fully exploits itself.
●
● Government guideline and Acts for
diet and health affect business of
McDonald.
● Change in regulation and political
instability impact on the respective
company business.
●

ECONOMICS FACTORS
● Positive impact ● Negative impact
● By this respective company can grow
slow but stable in developed countries.
● In developing country McDonald
grow rapidly.
●
● Change in economic can affect
business and growth of McDonald.
● It can also impact on supply and
demand of product in market.
●

SOCIAL FACTOR
● Positive impact ● Negative impact
● It increases cultural diversity of
McDonald.
● Busy lifestyle of urban environment
increase sales of respective company.
●
● McDonald has to identify and
introduce new products according to
culture of respective country.

TECHNOLOGICAL
FACTORS
● Positive impact ● Negative impact
● • It help McDonald to improve
management and productivity while
reducing wastage time and resources.
● • It help in improving technology of
ordering, forecasting sales and food
traffics and also make easy payment
for customers.
●
● • Implementation of new
technology in respective company is
expensive because to implement it
employer has to provide training to
employees or hire new employees.
● • Some time it is risky to implement
new technology in organization.

ENVIRONMENTAL
FACTORS
● Positive impact ● Negative impact
• It increase emphasis the respective
company corporate environment
programs.
● • By it McDonald introduce variety
of products.
●
• Climate condition in some regions
affect demand and supply of
McDonald.

LEGAL FACTORS
● Positive impact ● Negative impact
• By this respective company insure its
integrity and consumer confidence
by ensuring its material and
process.
• Respective company has to fulfil all
aspects or rules for manufacturing
products like health regulation,
animal welfare regulation etc.

Internal and external
analysis
● Strengths Weaknesses
●
● Opportunities ● Threats
● McDonald's is spread across the
world to provide its facilities and
it works efficiently with help of
large number of employees.
● They provide a wide variety of
products depending upon the
taste and preferences of the
customer like French fries, egg
mcmuffin, happy meal, big mac
and many more.
●
● Negative image is being created
due to unhealthy food which
includes less amount of nutrition
and more calories. They should
be aware of negative publicity.
● Trans-fats are used by them
which cause some kind of cancer
which means their customer base
is decreasing.
●
● There are opportunities are mixed
with product mix and global
growth it can expand in different
markets by grab opportunities to
increase market share.
● McDonald's only work in food
and beverages and it aimed to
diversify in different market so
that its brand image also help to
other products in industry.
●
● Threats arises due to socio
culture trends and rivalry in
market. Fierce competition in
market create hurdle for
McDonald's in compete in
environment.
● Health conscious consumers
create hurdles in McDonald's
enhancement and advancement
that hinders its self interest.
●

Strengths and weaknesses
interrelate with external factors
• External and internal factors influence to organization and impacts
on its profitability of McDonald's.
• In internal factors are present within organization which are
controllable on other hand external factors are consist of factors
that present outside organization which impacts on organization
profitability