Business Environment Analysis: A PESTLE Analysis of McDonald's

This report provides a PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis of McDonald's, a leading fast-food company. The report examines the impact of various external factors on McDonald's operations, including government regulations, economic conditions, consumer preferences, technological advancements, legal compliance, and environmental concerns. The analysis highlights how these factors influence the company's sales, profitability, and overall business strategies. The report also includes an introduction, a task section detailing the PESTLE analysis, a conclusion summarizing the findings, and a list of references. The PESTLE analysis considers factors like competition policy, consumer spending, changing lifestyles, and environmental issues, providing a comprehensive overview of the challenges and opportunities McDonald's faces in its business environment. The report concludes that McDonald's needs to analyze these factors to create effective strategies and make informed decisions. The report also includes a visual representation of the macro-environmental analysis.

English Academic Skills

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Conduct a PESTLE analysis of McDonald's..........................................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Business environment is an intermixture of internal and external factors which can harm
company's market image and reputation. External environment put more affect rather than
internal environment; it can be examined by PESTLE analysis (Shapter and et. al., 2012). The
referred organisation is McDonald's in present report which is one of the biggest fast food
company over the world. Company was established in 1940 and its vision is to be the best and
leading fast food provider over the globe.
TASK 1
Conduct a PESTLE analysis of McDonald's
PESTLE analysis is a systematic tool or framework which is used by business owners in
order to analyse as well as monitor the macroeconomic or external environmental factors which
can hamper firm's operating activities in a direct and indirect manner. Below described is the
PESTLE analysis of McDonald's: -
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Illustration 1: Macro environmental analysis
(Source: PESTLE Analysis, 2016)

 Political factors – These factors involve competition policy, industry regulation and tax
policies. The fast food sector is one of the major targets for government initiatives by
having an aim of improving health and decreasing the ratio of obesity in British
Countries. According to Zeng and et.al., (2014) UK's government develops certain
policies to resolve issues regarding public health. It hits the business operations of
McDonald's in several areas. In 2009, there was a differentiation in food standards
among markets in which company was operating. Economic factors – It refers interest and exchange rates, economic growth, consumer
spending and income, etc. Due to recent economic crisis in 2008, the sales and
profitability of fast food industry was affected so badly. UK's market is still affecting
with the impact of this recession. Along with this, economic downturns can reduce the
revenues and increase annual operating costs of business organisations (PESTLE
Analysis, 2016). It was affected customers' disposable income, wage stagnation and
increases unemployment or poverty. Social factors – It encompasses with demographical changes, consumer tastes, changing
lifestyles and impact of pressure groups. In this modern era, changes in buyer’s
preferences can also hit McDonald's business activities in terms of profitability and sales.
With the viewpoints of Estep and et. al., (2015) now people are more focused upon their
health and weight; they do not prefer casually to eat junk food. Therefore, =y=in order to
sustain demand and raising proficiency McDonald's has to reframe its menu and include
low fat products. Technological factors – It involves adaption of mobile technologies and new production
processes. Modification in technology not only improves functional area of McDonald's
but it also helps in evolving greater connections or linkages with target and potential
customers. Effective tools and technologies of communication strengthen its brand
(Govindasamy and et. al., 2011). For example- online orders are assistive in gathering
information about customers' needs and wants. McDonald's is also connected with its
billions of customers on social media pages. Legal factors – Higherlevel of laws and legislations might be stifle the growth and
vitality of fast food industry. UK government has implemented certain laws which must
be followed by all corporate associations such as health and safety act, employment law,
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etc. However, European government has regulated a law for fast food industry in which
employees can select working hours as per their flexibility. It helps McDonald's in
attaining and retaining staff members for long period of time.
 Environmental factors – There are various environmental issues regarding long term
resource protection (Zalengera and et. al., 2014). Along with this, it is necessary for
McDonald's to fulfil its corporate social responsibility and develop certain frameworks
for environmental protection such as global reporting initiative. In simple words, the
supply chain process of fast food industry should be environmental friendly and promote
business activities at global level.
CONCLUSION
From the above mentioned report, it has been analysed that there are different types of
macro environmental factors, such are stated as- political, economical, social, technological,
legal and environmental factors. It is necessary for McDonald's to analyse all these elements in
order to create effective strategies. PESTLE analysis also helps in the decision making process
of company.
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REFERENCES
Books and Journals
Estep, L. K. and et.al., 2015. Emergence and early evolution of fungicide resistance in North
American populations of Zymoseptoria tritici. Plant Pathology. 64(4). pp.961-971.
Govindasamy, C. and et.al., 2011. Concentration of heavy metals in seagrasses tissue of the Palk
Strait, Bay of Bengal. International Journal of Environmental Sciences. 2(1). p.145.
Shapter, F. M. and et.al., 2012. Analysis of adaptive ribosomal gene diversity in wild plant
populations from contrasting climatic environments. Plant signaling & behavior. 7(6).
pp.602-604.
Zalengera, C. and et. al., 2014. Overview of the Malawi energy situation and A PESTLE
analysis for sustainable development of renewable energy. Renewable and Sustainable
Energy Reviews. 38. pp.335-347.
Zeng, G. and et.al., 2014, April. Tin pest in lead-free solders? Fundamental studies on the effect
of impurities on phase transformation kinetics. In Electronics Packaging (ICEP), 2014
International Conference on (pp. 135-139). IEEE.
Online
PESTLE Analysis, 2016. [Online]. Available through:
<https://www.tutor2u.net/business/reference/what-is-pest-analysis>.
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