McDonald's Case Study: PESTLE Analysis, Sustainability, and More

This case study analyzes McDonald's, examining its external environment, competitive advantages, and sustainability practices. The assignment begins by identifying six key external environmental factors impacting McDonald's, including political, economic, social, technological, environmental, and legal aspects, with a focus on the economic factors' significance. It then explores McDonald's responses to environmental concerns, such as ingredient changes. Finally, the study assesses the sustainability of McDonald's competitive advantages, considering threats from new entrants, supplier power, buyer power, and rivalries. The analysis references relevant academic sources to support its claims.

Running head: McDonald’s CASE STUDY
McDonald’s CASE STUDY
Name of the Student
Name of the university
Author note

1McDonald’s CASE STUDY
Answer to Question 1
The six different elements of external environment that are applicable to McDonald
are as follows:
1. Political Factors- McDonald’s needs to abide by the policies of the local government along
with foreign investment policies for business strategy related to franchise.
2. Economic Factors- Having branches in different countries requires McDonald’s to abide
by different scales of tax along with revenue measurement. It also faces various problems due
to international currency fluctuations.
3. Social Factors- The change in demands of the customers require that McDonald’s comes
up with changes in its services.
4. Technological factors- It is required that McDonald’s adopts technological changes so that
it can meet customer’s expectation.
5. Environmental factors- It has been criticized for using Styrofoam containers and non-
biodegradable substances for the drinks glasses (Perera, 2017).
6. Legal Factors- This can affect its operations as for example in Muslim counties it is
required that it complies with Halal food authorization.
Among the six elements the most important one is economic factors because this
depends on the tax reforms in different countries.
Answer to question 2
In case of environmental factors, McDonald’s has removed high fructose corn syrup
from its buns, use of real butter instead of liquid margarine, using chicken raised without

2McDonald’s CASE STUDY
antibiotics and making use cage free eggs. These changes are a step to address the critiques
who have questioned on various factors such as Styrofoam containers and many more.
Answer to question 3
Four different criteria for sustainability of competitive advantages are as given below:
1. Threats of new entrants- The new entrants can make considerable threats for the existing
ones. For instance if a KFC branch open in the area where McDonald’s is already present, it
will act as some sort of barrier for the store.
2. Power of suppliers- The relationship in between the company and suppliers has a
significant effect on the business.
3. Buyers’ power- McDonald’s should try to have maximum number of consumers by
providing quality food at affordable prices (L’AUDIT MARKETING & DE, 2019).
4. Threats of rivalries- Competitors are major barriers and McDonald’s need to bring in
innovations to be different from the rivals and maintain its market position.

3McDonald’s CASE STUDY
References
L’AUDIT MARKETING, U. M. D., & DE, C. (2019). MARKETING AUDIT A METHOD
OF A CONDUCT EVALUATION OF THE MARKETING STRATEGY AND THE
BUSINESS PERFORMANCE. Revue Internationale du Marketing et Management
Stratégique, 1(4), 156.
Perera, R. (2017). The PESTLE analysis. Nerdynaut.