LSME504 - International Business: McDonald's Strategy and Environment

This essay provides an analysis of McDonald's Corporation as a successful global restaurant chain, focusing on its international business strategies and the various external factors that influence its operations. It examines socio-economic cultures, noting the impact of changing customer behavior, rising disposable income, and cultural diversity. The analysis also covers technological developments, emphasizing the importance of adapting technology for maximizing profit and improving business efficiency through automation and mobile applications. Political factors, including governmental regulations and trade policies, are discussed in the context of McDonald's expansion and compliance with local laws. Furthermore, the essay addresses ecological considerations, highlighting the influence of global, regional, and local economies on McDonald's business, including opportunities in stable markets and threats from economic slowdowns. The conclusion underscores the importance of considering all external macro environmental factors for effective international business operations.

International
Business

Contents
INTRODUCTION...........................................................................................................................1
Socio-Economic Culture affecting McDonald.................................................................................2
Technological Development Affect.................................................................................................2
Political Factors Consideration........................................................................................................3
Ecological Consideration.................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
The McDonald's Corporation is one of the successful Global restaurant chain working all
over the world. They are following up active management and global expansion strategies for the
purpose of entering in new markets increasing the share of foreign fast food market. The case
study given in the report is stating that how McDonald's has attained this enormous success by
performing best practices in the Global Food Industry. This report covers the socio-economic
cultures, technological development, political environment consideration and ecological
consideration which affect the McDonald's restaurant international business decisions in the
markets currently they are operating. It is an international food brand which is operating in
multiple countries. It is necessary for them to follow all the factors of business environment so
that they can enhance the profit. Political or legal factors, economic factors, technological factors
and environmental factors come under the external environment which affect the business
operations of McDonald's.
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Socio-Economic Culture affecting McDonald
Social cultural factors are defined as the social conditions which affect the business of
McDonald's positively or negatively. It has been found that the change in the behavior of
customer is the social Trend as it affect the revenue of business organization.
Rising disposable income is an external factor as it worked as opportunity for McDonald's as it
leads to the increase in tendency of consumers to purchase the food. In the urban areas, the
lifestyle of people is very busy e which also increases the sales of products of McDonald's.
Along with this it is also found at McDonald is famous for providing the food in minimum time.
This is the another social cultural factor which influence the people of US to consume their
meals because they are providing meals with minimum time effort. This time saving mil
increased the demand of food products having low prices because they can be available at any
time and can be purchased by giving less effort in shopping (Dana 2017).
One of social culture factor of McDonald is increase in the cultural diversity which act as
threat and opportunity for them. Under this factor the organization have to develop their product
as per the preferences of consumer which is based on several local and religion markets. This
product development leads to the increase in the productivity and profitability of organization.
McDonald is a fast food company and such businesses have opportunity to increase the
flexibility in designing their product in order to satisfy the requirements and needs of consumers
in various markets all over the world. But the healthy lifestyles Trend of people of us are a threat
against McDonald's. Several of people criticism about the adverse health affects many of the
products of this organization (Matheson 2018). This factor can also work as the opportunity for
McDonald as it provides the opportunity for increasing the healthfulness products in their menu.
In this way the social cultural factors implies various opportunities for the growth and
development of McDonald Corporation. Such factors play an important role in influencing the
perception of consumers towards the organization. The management of McDonald's Corporation
is following social responsibility strategy and managing the stakeholders in an effective and
efficient manner in order to remove the negative effect of social Trends over the business.
Technological Development Affect
The technological factors helps in recognising the concern to the impact of technologies which
are related to the trends on the remote or macro environment of an organisation. It has been
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found that the success of McDonald's corporation is totally depend on their way of adaptation of
Technology for the purpose of maximizing the profit of organization. Adaptation of Technology
stands for adopting the newly launched technological Trends and resources which help the
business organization to operate the business functions in an effective and efficient manner by
saving cost and time.
In order to improving the effectiveness and efficiency of business organization, McDonald
Corporation have the opportunity to perform the moderate research and development activities to
know about the preferences of the customers. By doing research they can know about their
competitors and compare the products and prices with their competitors. McDonald Corporation
is also focusing on increasing in the business automation. It is a good opportunity for McDonald
to increase the productivity and profitability of organization. There are various Automations
which are required to change in McDonald operations Management, which are related to the
productivity approaches of organization. For instance when McDonald's enter in the Russian
market, they started using new machinery which they buy from Holland for the purpose of
harvesting potatoes which are being used for making French fries (Silva and et. al., 2017).
Adoption of this technology leads to the the increase in the productivity and profitability of
organization and implies long-term benefit to the organization. Another use of technology in
McDonald's Corporation can be found as the sales of products by the use of mobile devices.
Under this technique the customers can order the products from McDonald by the use of a
mobile application. This technological trend results in high increment in the sales of McDonald
Corporation. The adoption of new technology gives result with the higher revenue growth.
Above-mentioned are the some technological development of facts which can be seen in the
McDonald Corporation (Gereffi, G., 2019).
Political Factors Consideration
Political environment factors refer to the groups and laws which influence the business
organization and individual in a specific society. MacDonald is a multinational company which
is working in various countries. So it is necessary for them to you follow all the rules and
regulations of all the countries in which they are going to start their business operations. These
factors include the governmental actions and policies which influence the business operations of
an organization.
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McDonald's Corporation is free to expand their business operations in the international market
and make their organization as Global supply chain (García-Lillo and et. al., 2019). It can be
considered as the opportunity for McDonald as the government has issued free trade policy in
many countries. The expansion of business organisation in other country is possible only after
completing all the rules and regulations made by the government of specific country. It is
necessary for international business organization to you follow all the rules while performing
business operations in any country. McDonald's had followed rule of Moscow in Russia.
According to this rule it was necessary to have Russian name of all the stores or the name
translated into the Cyrillic alphabet. The same rule was also passed in Japan. As a result
Macdonald had to change their name to Makudonaldo. Russian government also made a rule that
there must be three-quarters majority vote are required to approve any important decision. It state
that the employees of McDonald's and the City Council must perform the discussion on all the
major decisions which are related to the opportunities for the organization. The Government of
many countries has issued various guidelines related to the diet and health for the business of
restaurant chain. This political factor can be considered as opportunity and threat as this factor
leads to the improvement in the products of McDonald Corporation. Along with this it has been
the subject of Criticism regarding the effect of their products on the health of consumers.
Ecological Consideration
Ecological Consideration McDonald Corporation can be defined as the factors which are going
to affect the economic conditions and Trend of macro environment. It is well known that the
economic changes influence the business operations directly or indirectly. It is also founded at
the McDonald's get influence by global economy regional economy and local economy which
comes under the external factors of macro environment (Hannibal 2018).
The stability in the economic growth in the developed countries worked as the opportunity for
McDonald's Corporation as it leads to the growth and development of business organisation by
increasing the stability in the restaurant chain business. It has been found at the market of United
State has there biggest contribution in the revenue of the organisation. Along with this it is also
found at the McDonald corporation is also Getting higher revenue in stable recovery and growth
of market of Europe. Another economic factor can be treated as threat for the McDonald
Corporation the slowdown of economy of China is a strategic issue. The Chinese Market provide
huge contribution to the revenue of McDonald. If the economy of China is go downwards it
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really cause of Huge loss to the McDonald organization. One more opportunity of economical
factor has been found for the McDonald Corporation as they have a another opportunity for
growth and development of organization. They can expand their business in high growth in the
developing markets. In order to making the products available for customers in appropriate
prices, the organization is required to adopt the several promotional tools which are cost
effective. If the cost of promotional tools get higher it will difficult for customers to buy the
products. It is well known that the people living in that developed country such as US have
higher consuming power (Schmitthoff 2020). The people living in the developing countries such
as India, do not have much money to buy the superior quality of products of McDonald. But they
can buy the products of McDonald which are pocket friendly. It is necessary for the organization
to do the complete research on the economy of a specific country so that they can make the
product available for customer as per their preference and income. In addition to this, it is
essential for organization to spent a good amount on the promotion of their organization. The
promotional activity is a help the organization in attracting the customers towards them which
result in the increase in the sales of products of McDonald Corporation.
CONCLUSION
From the above report it is concluded that while doing international business, the
management have to take care about all the external macro environmental factors as it help the
business organization in performing the business operations in an effective and efficient manner.
McDonald's corporation is a multinational restaurant chain having restaurant all over the world.
If they want to constantly increasing the revenue of their organization, they are required to study
about the preferences of the customers living in a specific country. There are lots of factors
which affect the choices of customer which comes under the social cultural factors. In order to
completing the business operations in an efficient manner the management is required to adopt
various new technologies which help them in completing the work in cost and time effective
manner. Along with this it is also an essential for an organization to follow the political or legal
factors of any specific country while doing international business. Political and legal factors refer
to the rules and regulations of our country which are made by the government of specific
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country. Ecological consideration is also an important part in international business as higher the
economy of a country implies higher revenue to the international business. Because a when the
purchasing power of customer is high they can spend the money e over other things which result
in the growth and development of business organization.
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REFERENCES
Books and journal
Dana, L.P., 2017. International entrepreneurship research: how it evolved and directions for the
future. International Journal of Entrepreneurship and Small Business, 30(4), pp.477-489.
García-Lillo, F., Claver-Cortés, E., Marco-Lajara, B. and Úbeda-García, M., 2019. Identifying the
‘knowledge base’or ‘intellectual structure’of research on international business, 2000–2015: A
citation/co-citation analysis of JIBS. International Business Review, 28(4), pp.713-726.
Gereffi, G., 2019. Global value chains and international development policy: Bringing firms, networks
and policy-engaged scholarship back in. Journal of International Business Policy, 2(3), pp.195-
210.
Hannibal, M. and Knight, G., 2018. Additive manufacturing and the global factory: Disruptive
technologies and the location of international business. International Business Review, 27(6),
pp.1116-1127.
Matheson, R. and Sutcliffe, M., 2018. Belonging and transition: An exploration of International Business
Students’ postgraduate experience. Innovations in Education and Teaching International, 55(5),
pp.602-610.
Schmitthoff, C.M., 2020. International business law: a new law merchant. In Current Law and Social
Problems, II (pp. 129-153). University of Toronto Press.
Silva, G.M., Styles, C. and Lages, L.F., 2017. Breakthrough innovation in international business: The
impact of tech-innovation and market-innovation on performance. International Business
Review, 26(2), pp.391-404.
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