Report on McDonald's: Analyzing the Internal and External Factors

This report examines the internal and external factors influencing McDonald's business environment. It utilizes SWOT analysis to assess internal strengths and weaknesses, highlighting technological initiatives and employee satisfaction issues. The report also employs PESTEL analysis to evaluate external factors such as political, economic, social, technological, environmental, and legal influences. Opportunities for McDonald's include leveraging e-commerce and social media, while threats involve high competition. The analysis concludes that McDonald's can mitigate negative external impacts by adhering to regulations, expanding in Asia, prioritizing local markets, implementing automation, diversifying its supply chain, and developing a comprehensive animal care policy. This strategic approach enables McDonald's to navigate the dynamic business environment and maintain a competitive edge. Desklib offers a platform to access similar solved assignments and past papers.

EXTERNAL AND INTERNAL FACTORS OF MCDONALD’S
Internal environment
Strengths
•Technological initiative- Due to advancements in technology, McDonald’s introduced
self-service kiosk, mobile ordering system, digital/cashless payments through which they
can maintain their competitive position in highly dynamic business environment.
Weakness
•Poor employee satisfaction- Due to poor working scenario and incline in conflicts and
disputes, this is a shortcoming for McDonald’s which makes the company face incline in
employee strikes and also hampers the brand image of the company.
Opportunities
•Use of e-commerce and social media platforms- McDonald’s can make effective use of
social media platforms through which they can promote their offers and attract greater
number of customers (Fernández-Olmos and Ramírez-Alesón, 2017). With the help of e-
commerce platforms, McDonald’s can deliver their products to greater number of
customers through their website and online ordering app which will be an opportunity for
enhancing the capital of the company.
Threats
•High competition- McDonald’s is operating in fast food industry which makes business
face high competition and it is responsible for dividing the customer base of the company
which can bring threat for profitability of McDonald’s.
INTERNAL AND EXTRENAL FACTORS OF MCDONALD’S
INTRODUCTION
Business environment is the composition of internal and external factors which can create an
impact on the profitability and success of an organization. Business environment can bring
opportunities as well as threats for the organization (Doan and et.al., 2018). McDonald’s was
started by Richard McDonald and Maurice McDonald in 1955 which offers variety of fast
foods and quick bites. This poster will define the internal and external business environment
and how McDonald’s deals with external business environment.
External factors
Political factors- Government laws and public health policies may either benefit or hinder a
business.
Economic factors- Stable growth in emerging countries has provided chances for company
expansion (Sallet and et.al, 2021). The slowing of the Chinese economy, on the other hand,
has had a detrimental impact on business.
Social factors- Cultural diversity and healthy lifestyle can create a negative threat for the
company and incline in disposable income can bring opportunity for business.
Technological factors- Increased company technology and a rise in sales through online
ordering have given businesses new peaks.
Environmental factors- Rapid changes in climatic conditions in various places can have an
impact on the company's products, leading to an increase in waste.
Legal factors- Increases in minimum wages and health restrictions have had a negative
impact on McDonald's operations.

Political factors- McDonald's may reduce the negative impact of such elements by adhering
to government standards, regulations, and initiatives.
Economic factors- McDonald's may be able to boost its revenue and profitability by
extending its operations in Asia.
Social factors- By prioritizing local and regional markets, McDonald's can improve product
development and reduce cultural disparities.
Technological factors- Implementing automation may aid in bringing about change in
operations and functional management, as well as increasing McDonald's profitability.
Environmental factors- McDonald's can address the impact of climate change on the
company' profitability by diversifying its supply chain (Sun and et.al, 2018).
Legal factors- McDonald's may be able to attract more consumers and increase knowledge
about animals and employee satisfaction policies at work by having a thorough animal care
policy.
REFERENCES
APPROACHES IN WHICH MCDONALDS CAN IMPACT ON EXTERNAL
ENVIRONMENT
CONCLUSION
Based on the facts presented above, it can be stated that the business environment is made up of both internal and external factors. To figure out what the
interior environment is like. It is possible to apply the SWOT analysis approach. PESTEL analysis has been used to tackle problems and achieve a
competitive edge for company by monitoring the changing external business environment.
Doan, C. D and et.al., 2018. Internal and external factors affecting the crystallization, gelation and applicability of wax-based oleogels in food industry. Innovative Food Science &
Emerging Technologies. 45. pp.42-52.
Fernández-Olmos, M. and Ramírez-Alesón, M., 2017. How internal and external factors influence the dynamics of SME technology collaboration networks over time. Technovation. 64.
pp.16-27.
Sallet, J and et.al., 2021. Impact of internal and external factors on prosocial choices in rhesus macaques. Philosophical Transactions of the Royal Society B. 376(1819). p.20190678.
Sun, H and et.al., 2018. Differential effects of internal and external factors in early bilingual vocabulary learning: The case of Singapore. Applied Psycholinguistics. 39(2). pp.383-411.