Analyzing McDonald's: Socio-Economic Factors in International Business

This report examines McDonald's operations in international markets, focusing on the influence of socio-economic cultures, technological developments, political environments, and ecological factors on the company's business decisions. It highlights how socio-economic factors like family structure and cultural norms impact McDonald's strategies, including targeted advertising and menu adaptations in countries like Japan and India. The analysis also covers how technological advancements affect efficiency and standardization, using examples from Russia. Furthermore, the report discusses the impact of political regulations, such as naming laws in Russia, and ecological considerations that drive changes in packaging and supply chain management. The conclusion emphasizes the importance of international business for expanding market reach and improving profitability.

International Business

Table of Contents
INTRODUCTION...........................................................................................................................3
TASKS 2..........................................................................................................................................3
Socio-Economic cultures affecting McDonald's in international business..................................3
Technological developments affecting restaurant under international business..........................4
Political environment affecting company's business decision ....................................................4
Ecological factors affecting international business decision for McDonald...............................5
REFERENCES................................................................................................................................7

INTRODUCTION
International Business is defined as when a company extend its reach towards new
market with exchange or trade of various goods, services, technology and capital between two or
more countries. International businesses play an important role in expanding the reach of
companies on world level with gaining more accessibility of new resources and gaining more
profits. The report delivers about “McDonald's” one of the top fast food brand based in United
Kingdom. Analysis shows about company's operations in international markets with delivering
knowledge about various socio-economic cultures affecting firm. Furthermore, report showcase
about different technological developments may affecting McDonald's restaurant in global
markets. Apart from that analysis also focus on how political environment affects industry's
working and business decision while operating into external markets. Lastly, the report delivers
about ecological considerations taken by firm which may affect decisions taken by business
while working in international market.
TASKS
Socio-Economic cultures affecting McDonald's in international business
The socio-economic is basically defined as the factors affecting company's working in
global market includes various cultural norms, age distribution and different demographic trends,
which forces greatly impact in success under global market (Aithal, 2017). As there may various
factors affecting out of which family structure may one of the reason. With change in family
structure and decision-making firm tends to shift their strategy and additionally put their focus in
advertising and attracting youth-oriented culture causing them to gain more of teenage and
young audience. With successfully targeting and emphasizing on children and teenagers cause a
large shift in increase in sales for enterprise and capturing more of customer base in the market
itself. As well as company also focus on providing low-pricing foods to customers which results
in organization to grow and able to bring huge demand with minimum shopping efforts for
consumers. When the brand initiate to expand into Japan's economy firm may tend to gain a
surge of popularity with their approach, where family ties were considerably be termed as strong
approach used by firm.
McDonald's campaign depicted various aspects of father-hood which cause a generating
feeling amongst people and great advertising cause in gaining more market share and
profitability (Rialp and et.al., 2019).

While the cultural factors impacting company in ways as with regular growth of
international media cultural norms keeps on opposing firms working techniques and operations
instead brand keeps on gaining both positive and negative impacts (Centobelli, Cerchione and
Esposito, 2017). As when enterprise wants to operate into 'India' the chain decided to not to
launch their Big Mac which resulting in decrease in the sales and revenue earning of company at
first due to the beliefs as deferring to Hindu prohibition against consumption of beef. The
organization rather changed their whole menu and served chicken, fish and vegetable burgers
for gaining customers trust, customer market with an immediate effect the Maharaja Mac being
created with use of different meat and veggies.
These cultural factors also impact in other countries such as Malaysia and Singapore
where firm been forced to change their food preparation methods according to their norms. For
example the meat enterprise use must be according to laws and norms of nations and be certified
by regulations. Also, while operating into Puerto Rico for advertising the company eventually
required to made and developed their advertising into native language of Spanish due to
customers objected initially and further brand changes for increasing the promotion and sales.
Moreover, in Southern China company need to be careful with not to advertise with prices with
multiple occurrences of number four in according to the beliefs of nation as people of that
particular nation tends to not choose products with having multiple reoccurring of number four.
As well as due to this belief of nation's people, brand may face various challenges while
advertising of their products and ending in decreased sales for firm (Dang, Jasovska and
Rammal, 2020). As people believe that the pronunciation of the word four may similar to word
death so company require to take preventive measures before advertising or promotion of their
products. This may also leads in McDonald's to loose some of their customers with the
superstition related to that number.
Technological developments affecting restaurant under international business
The technological factor shows about the rate of technology and change, evolution of
infrastructure with government or institutional research. With great technological developments
made international trading and communication more effective and accessible. Also, based on the
availability of developed technologies in the local market for acquiring full advantage of
products. With improved technological advancement cause a positive impact in affecting the
business as with systematic substitution of equipment for people and also carefully planned and

using positioning of technologies may aid franchise in making and maintaining high standards
and gaining more sales revenue for firm (Poulis and Poulis, 2018). Properly overcoming the
technological problems also helps company in accessing more market potential and market
resources so that McDonald's may able to gain more customers which resulting in gaining
competitive advantage over other companies.
When company entered into the markets of Russia, firm requires to took important usage
of technology transfer with providing in gaining long term benefits (Riva and et.al., 2018). Apart
from that enterprise brought new machineries from Holland to harvest potatoes required for
making French fries and some of vegetable burgers. Industry also focus on regularly checking
and implementing new techniques for the beneficiary improving the working conditions and
regularly gaining new ways for maintaining, as well as delivering high standardized products.
Use of new and advanced technology also aids firm by remodelled their store as increasing
branding image, along with improving their advertising and promotional ways and strategies.
New promotional techniques helps McDonald's to get more attention of customers and attracting
them towards stores.
With proper use of advanced technology McDonald's also being able to maintain and
deliver high standard good foods to their customers. Earlier learning about restriction on using
particular type of meat and its specific way for processing also puts negative impact in business
decision as company needed to change their whole menu and way of working including their
machineries for meeting the requirements as well as working into foreign markets (Wry and
Zhao, 2018). While operating under some countries having less to none technological
advancement affect brand to outsource their products and equipping new technologies to grow
and harvest some crops for time efficiency. As new machines also tend to affect improving time
management with continuously and timely working and preparation of food. Due to which
resulting in company to gain more customers and being ahead of their customers in the market.
Political environment affecting company's business decision
Although there may be various factors affecting the decision-making of business under
the country they may operate while political factors include various laws and regulation
company required to follow that influence and limit organization's workings. The firm requires
considering various government attitudes, laws, regulations and attributes to the foreign markets,
and also various policies that needed to be followed for continuing working. Apart from this

various government policies impacts differently in company's business decision with whole new
regulations for McDonald's to keep in check and follow. When company plans to expanding and
working in Russia enterprise requires to have at least of three-quarters majority votes before
making or changing any decision about applying anything new into working resulting in putting
a negative impact on the organization (Boudreaux, Nikolaev and Klein, 2019). Apart from that
organization also have to face some consequences, with in accordance to their name, as in the
written laws of country requires to have Russian names for all the stores operating, or at least
translated into the Cyrillic alphabets before entering and starting the work. Which basically
results in enterprise to change their store name in local or native language.
Not just in Russia but company require to face another challenge with translating brand
name as under this McDonald's face major issue in retaining their name, firm may able to either
have their own name or not being able to operate in the markets according to strict laws and
regulation by country. As a result they end up in changing their name but with retaining at least
the sound of their name with changing in the pronunciation to 'MaKudonaldo'. Apart from
changing name they require to develop various new marketing mix elements in foreign markets,
and new approaches to adapt. With many countries government and their implication of
regulations puts a direct impact on product design and various problems and issues in launching
of new product in the markets.
Not just in the naming clauses but with government regulations and restrictions also
affect the promotion of products as, company may not being able to deliver or promote their
products in such specific ways it may supposed to be (Kotabe, Jiang and Murray, 2017). Various
rules also restrict in freedom of showcasing about products as both marketing campaign with
visually advertising of company requires to be changed for meeting the requirements and being
able to publish their advertisements. Apart from that price factor also need to be considered and
influence business decision, when operating in some specific countries McDonald's require to
change their pricing of all products in according to the rules being incorporated of that particular
nation.
Ecological factors affecting international business decision for McDonald
Various ecological or environmental factors being under consideration which may affect
decision-making of business. The climate and physical terrain also being into thinking before
entering into new markets as these also affect in business decision of firm (Alamgir and et.al.,

2017). As some nations may have very tropical regions and don't choose some type of food, or
they prefer already existing or something else instead for any fast food. The company requires
taking proper care about the terrain and climate as well as altitude with temperatures and
humidity before entering into the market of specific nation (Geldes, Felzensztein and Palacios-
Fenech, 2017). Being considering ecological factors in value for decision-making company take
proper measures about all environmental friendly aspect so that they tend to operate easily and
gain customer base. McDonald's were forced to reduce the use of plastic and styrofoam
packaging resulting in company to opting cardboard boxes for their packaging of products. As
well as brand requires for taking care of their customers with issue arising about food being
getting cold quickly. With changing their method of packaging aids industry in gaining more
attention of customers along with providing environmental benefits, attractive packaging and
solving problems.
With the environmental factors affecting cause benefits to the brand in gaining suitability
and environmental sustainability apart from that company also gets an increase in value and
brand reputation along with gaining more customers reach. As customer tends to choose brand
who take care of environment as well as their producers and consumers. Organization internal
market research showcase about environmental issues may have neither positive nor negative
effect in regard to sales generation for firm, apart from that also collaborating and working with
environmental 'Defence fund' which also leads towards a massive impact in the business decision
by changing their way of doing operations and taking care of environmental policies (Trivedi,
Patel and Acharya, 2018). Environmental factors affect in business decision in regulation of firm
under some situations leads further diversify its supply chain to address the effects of changes in
climate conditions.
CONCLUSION
From the analysis it has been concluded that international business plays a very important
role for any organization to expanding their reach and gaining more accessibility in new markets.
With the aid of global business companies may tend to improve their efficiency and also increase
their profitability from around the world providing various benefits including better resource
management, better risk management and disposal of surplus goods. International business also
aids firms for capturing more market customers along with increasing profits and gaining
competitive advantage. The report delivers about how different socio-economic cultures affect

McDonald's while operating in global market also, about various technological developments
affecting and required to know about how company may deal with them. Further, the analysis
showcase about different ways political environment affect brands international business
decisions in markets operating. Lastly, report delivers information related to how ecological
environment and factors affecting industry's international business decisions in the market.

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