LSME504 - McDonald's International Business: Key Factor Analysis

This essay examines the key factors influencing McDonald's in the international business environment. It identifies and illustrates how socio-economic cultures and technological developments affect McDonald's, highlighting the impact of lifestyle, cultural diversity, youth orientation, and technology adoption. Furthermore, the essay analyzes how the political environment, including trade agreements, health policies, and taxation, along with ecological considerations such as corporate social responsibility, sustainability, and cleanliness, affect McDonald's international business decisions and overall performance. The analysis provides a comprehensive overview of the challenges and opportunities McDonald's faces in the global market.

International Business

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1) Socio economic culture affect Mc Donald restaurant in international business.....................3
2) Technological developments affect Mc Donald restaurant in international business:...........4
3) Political environment affect Mc Donald Restaurant international business:..........................5
4) Ecological consideration taken by Mc Donald restaurant affect international business:.......6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
International business refers to any kind of situation where production or distribution of
goods and services crosses national borders. Thus it involves cross broader transaction between
two or more countries. International business opens up a various career possibility for people.
Present report is based on Mc Donald as it is an American multinational fast food cooperation
company founded in 1940. Current discussion will be based on socio economic culture that
affect Mc Donald restaurant and also technological development that will create impact on
company in the international market. Furthermore, report will tell about how political regulations
affect Mc Donald company in operating its activity in the international environment and also tell
about ecological consideration of company in the long run.
MAIN BODY
1) Socio economic culture affect Mc Donald restaurant in international business.
Culture at national and international organisation influence on individual behaviour. This
include their perspective for a buying a particular product. Socio economic factors are very much
important for Mc Donald in determining consumer's ability to purchase a product.
Socio economic culture:
This factor may put positive impact on company, in term of increasing productivity as
organization offer online and offline services to people. It may take approach to consider
customer trends and provide online delivery services. When a company go in international
market they analyse various factors because it helps a business to stay on top trends in industry
that affect company in long duration.
Lifestyle of people: Lifestyle effect on sales performance of a company. People are
becoming more sophisticated when they eat something. Now a day’s people prefer to have
French fries and burger when they go to restaurant (McCauley and et.al 2020). this create a
positive impact on Mc Donald because people prefer to avail services from well-known brand
and Mc Donald comes under this category.
Increasing culture diversity: People came from different background and different
culture. Mc Donald offer food services according to demand of consumers and they also keep in
mind preferences of consumers they are continuously making improvement in their product
keeping in mind hygiene of consumers this create positive impact on international business.

Youth oriented culture: Now a day’s children are making selection of a place where to
eat. Mc Donald are emphasising on teenagers this create a positive impact on company as people
go for celebrations and parties and Mc Donald give all kind of services to people. They offer
variety of product it pertains to their interest, styles and behaviour for choosing a particular food
or services. Teenagers also go to restaurant for entertainment as Mc Donald provide
entertainment and leisure services to people.
Busy lifestyle of people: People are having busy lifestyle this create positive impact on
company as instead of cooking at home people prefer to go to restaurants. They buy fast food
and enjoy their meal at home also people go to restaurant to enjoy and have fun with their
friends, family and colleagues (Jian and et.al 2021). Disposable income of people is also
increasing it increases tendency of consumers to buy fast food product and also they are willing
to spend more money on buying fast food like burger and pizzas.
Purchasing power of consumer: Purchasing power of consumer is increasing this create
a positive impact on company as people now a day’s start spending their income on leisure and
fun activity. They go to restaurants for parties and to eat tasty burgers as company customer
service is also good. Mc Donald provide pleasurable experience and is very convenient for
people to go restaurants because Mc Donald is having their branches everywhere also company
provide online service and customers also get satisfied having fast food.
2) Technological developments affect Mc Donald restaurant in international business:
Technology play a vital role in fast food industry. Company improve their management
and productivity with minimum cost and by reducing time. Technology is also used for easy,
inexpensive advertising.
Technological development: This factor put positive impact on company as due to continuous
changes in technology and also company is using advanced tools such as digital marketing and
social media for promotion of company. This made purchasing, sales and advertising easier and
prominent this will lead to effectiveness of business.
Lifestyle and attitude: Technological development enhance better lifestyle of people
this will create positive impact on MC Donald. People habits is changing continuously they are
following trends (Chien and Tsai 2021). People tend to spend more time on restaurants this
create demand of the product and productivity also increased accordingly.

Increasing sales through mobile devices: Due to increase in technology mobile services
is being improved as consumer can place order by having mobile app. Mc Donald create its
mobile app from that customer can place order through phone and can enjoy their meal at home.
They don't not need to go to restaurants as people have busy lifestyle and they do not want to
spend time on travelling. Technological development reduces time of travelling thus company
growth is to be increased through mobile channels. Mc Donald is active on social platforms they
use Facebook and Instagram ads to grab customer attention. Although Mc Donald is well known
brand and it doesn't need any advertising but advertising impact its competitors.
Research and development activity: This create a positive impact on company as Mc
Donald is continuously putting its efforts on R&D activity to improve business effectiveness and
efficiency as compared to its competitors (Yaacob and et.al 2021). Under this activity company
undertake to innovate in its varieties by offering varieties of burgers and pizzas.
Digital technology: This create a positive impact on company as Mc Donald is having
loyal and higher fan following. Digital technology allows the restaurant to open up new modes of
ordering and payment that increases customer’s convenience and it also boost sales. Company is
using digital marketing and social media advertising and company is also using variety of
promotional methods and also using television and websites for promotion activity.
Increasing business automation: This create a positive impact on company success as
Mc Donald is having email automation and also they are continuously improving their staff
productivity, communication and produce food as quicker and according to customers’
expectations. They also upgraded their menus and providing better services. Through
technological advancement customer can order food sitting at home without waiting in line.
3) Political environment affect Mc Donald Restaurant international business:
Political forces are highly important as they cover many aspects of company policy. It
involves decisions and laws that government make. Change in political factor affect business
decisions and strategies. This factor assess that which government policies will interfere
business. It can be related to health and safety, taxation policy, trade policy environmental laws
etc.
Increasing international trade agreement: It create positive impact on company as Mc
Donald expand its multinational business that improve international trade. Mc Donald is fast
growing company as company make continuous improvement in its product by adding varieties

and specifications in its product. Mc Donald also provide quality product at reasonable price so
that lower income household can also afford food and services.
Government guidelines for diet and health: It create both positive and negative impact
on company’s growth in international market. It puts pressure to company that they must comply
with health and hygiene regulations. Company should adhere with food and health laws. Mc
Donald provide fast food that contain high amount of sodium and sugar that create health
problem. People suffer from diseases like diabetes, heart attack, hypertension etc. (Nakayama
and Wan 2018). Junk food lead to high cholesterol and obesity. Mc Donald is now adding
healthy addition to existing food this bring positive impact as they are adding protein in their
supplements.
Tax policy: Tax imposed by government on sale of fast food bring negative impact on
company. Government put high tax rate on sale of fast food as 14.5% fat tax is to be levied on
fast food. Government implemented taxes on sugary beverages because it encourages people to
choose healthy foods.
Public health policy: Mc Donald is evolving public health policy as that create positive
impact on company. Public health regulations must be included with restaurant menus as strategy
to educate consumers. Menu labelling laws are also being considered at local, state and
international level. Public health policy is achieved by promoting healthy lifestyle, researching
disease and injury prevention.
Trade policy: Trade policy is an instrument that is used to suit requirement of economic
growth. It refers to set of policies which govern external sector in economy. It does not only
about gains from trade but also about redistribution of income between producers, consumers
and government. Mc Donald import and export its product in almost all countries and also
comply with all the regulations if import duty decreases it create positive impact on company’s
success.
4) Ecological consideration taken by Mc Donald restaurant affect international business:
Environmental analysis refers to trends that is linked with natural environment. It is
process that identify all internal and external elements that affect company’s performance in long
run. Ongoing environmental crises rise awareness about environmental factors. It includes
scarcity of raw material, carbon emission and other factors. Company must follow all the rules
and regulations that create sustainability.

Corporate social responsibility: It is very important that company should operate in
such a way that demonstrate corporate social responsibility. It is good practice that every
organisation need to follow. Now a day’s consumers are also being more aware about social
responsibility and Mc Donald is also operating in ways that that contribute to society and
environment. It helps both to society and create brand image of company. Consumers is also
taking initiative of environment movements and adopting green strategies.
Sustainability: A sustainable company attract new talent, new customers and investors
because it affects in positive manner to society. Sustainability initiatives contribute to
organisation success it impacts organisation globally because rules and regulations of
government pressurise brands to adopt green approach. Mc Donald is integrating sustainability
strategy in business it boosts companies profit in long run and it also mitigate future risk.
Sustainability is also help brands to improve customer loyalty because environment issues is
increasing in fast food industries. Consumers is also becoming conscious with increasing
initiative of environment movements and adopting green strategies. It includes re plantation of
trees and energy saving initiatives. Thus regulation regarding fast food quality is also got
restricted by strict quality standards and Mc Donald innovated its approach to recycling and
waste management it installed recycling units in over 100 restaurants in UK. It also reduces
greenhouse gas emissions paper and plastic packaging and working on protecting water
resources this create positive impact on company. Sustainable supply chains have become need
for every company to operate its activities.
Cleanliness: Proper hygiene in restaurant help company to gain trust of consumers. Dirty
and disorganised thing create negative impact on company’s image. So company need to ensure
that restaurants are well maintained and also following proper hygiene facility. Cleanliness is
essential part of customer service. Mc Donald always make sure that their guest has clean eating
area as it as important as bringing out right food (Jian and et.al 2021). It shows that company
care about their customers and want that customer is having good time while they are dining. It
creates good impression and help to boost customer loyalty. When consumer find appearance
dirty they associate it with poor kitchen sanitation and concerned over safety of food they are
consuming. Regular cleaning of kitchen and dining area reduces germs. Consumer decide to go
to restaurant not only for food but also for feeling or ambiance that restaurants give. Clean
facility is essential for maintaining restaurant ambience and unclean facility leads to questions of

food and safety and also concerns over how well restaurant is managed. MC Donald keep in
mind all these things it creates positive impact and also it reflects business as a whole.
CONCLUSION
From the above analysis it is concluded that operating business in international
environment is essential for growth of the company. With the further discussion it was evaluated
that socio economic factor affect Mc Donald in international business reason being lifestyle of
people is changing and purchasing power of consumer is also increasing. Moreover, report
evaluated that focusing on technological development is also very important in the changing
environment. Along with this political environment is also need to be considered as tax policy is
continuously changing and environmental laws is also to be created by government. At the end
ecological factor is considered that affect overall growth of Mc Donald success.

REFERENCES
Books and Journals
Chien, S. Y. and Tsai, C. H., 2021. Entrepreneurial orientation, learning, and store performance
of restaurant: The role of knowledge-based dynamic capabilities. Journal of Hospitality
and Tourism Management. 46. pp.384-392.
Jian, O. Z., and et.al 2021. Effective Marketing Strategies of McDonald’s in Malaysia and
Indonesia. International Journal of Applied Business and International Management
(IJABIM). 6(2). pp.33-46.
Jian, O. Z., and et.al 2021. Effective Marketing Strategies of McDonald’s in Malaysia and
Indonesia. International Journal of Applied Business and International Management
(IJABIM). 6(2). pp.33-46.
McCauley, B., and et.al 2020. Digital gaming culture in Vietnam: an exploratory study. Leisure
Studies. 39(3). pp.372-386.
Nakayama, M. and Wan, Y., 2018. Is culture of origin associated with more expressions? An
analysis of Yelp reviews on Japanese restaurants. Tourism Management. 66. pp.329-338.
Tien, N. H., 2019. Customization and Standardization of the Business Strategy of Foreign
Enterprises in Vietnam–the McDonald’s Case and the Fast Food Sector.“. International
Journal of Research in Marketing Management and Sales. 1(2). pp.44-50.
Yaacob, S. A., and et.al 2021. A Concept of Consumer Acceptance on the usage of Self-
Ordering Kiosks at McDonald's. International Journal of Academic Research in Business
and Social Sciences. 11(13). pp.12-20.
Online
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