PESTLE Analysis of McDonald's Strategic Business Environment

The assignment presents a PESTLE analysis of McDonald's strategies, focusing on how various macro-environmental factors affect the company’s global operations. Political influences include international trade agreements and public health policies; economic aspects cover market stability in key regions; social considerations involve pricing and product diversity for varied income groups. Technological advancements are essential for research development and service automation, while environmental concerns address climate change impacts on supply chains. Legal compliance includes wage laws and animal welfare regulations. The analysis concludes by identifying opportunities and threats to McDonald's growth through these external factors.

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PESTLE analysis of McDonalds
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Introduction
The strategy of McDonald’s has been analyzed with PESTLE model. This will enable us
to get an idea about the various factors that influences the business in many different ways.
There are both internal and external factors that will determine the threats or opportunities to the
business, based on the macro environment. The company has maintained its focus on the socio-
cultural and economic factors (Sachdeva, 2015). Nevertheless, the success of the company has
proved to be indicative of its proper strategies in order to deal with the external factors.
McDonald’s is one among the big and well known fast food restaurants in the world. As a result
of this, the company has a large number of branches in different parts of the World. The
company is also exposed to many different conditions of the industrial environment.
Political factors
McDonald’s has its branches in many different parts of the world. As a result of which it
also has to adhere to many different political scenarios as well. This is because of the fact that
different countries have different political scenarios. The political factors are related to the
different strategies taken by the Government. In the case of McDonald, the important external
political factors are gaining opportunities from increasing the number of international
agreements of trade, pending the tax reforms and rising policies of the public health.
The company has the chance and the resources to extend the business operations based on
the improving the Global trade, that can further encourage the chains of international supply
(Eva et al, 2014).The company has also gained the opportunity to bring reformation in its
strategies and practices to reduce the negative effect that can be created on the firm due to the
high rates of taxation. The Present day generation is very much concerned about their health and

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various health related issues. As a result of this, they often try to avoid eating the fast food from
restaurants like the McDonald’s. The company however has enough resources to increase the
nutritional values in their products and design them in such a way so as to meet the health
standards of the present day generation.
Economic Factors
Economic changes in the world are also influencing the industrial environment of
McDonalds, by considering its global nature. There are certain factors influencing the external
factors from the economic point of view and they are stable growth of US economy, the presence
of stable and risky economies of Europe and the slowing down of the economy of China.
The company has gained opportunity to grow, even slowly in the economy of America,
which is regarded as the biggest market of firm (Sachdeva, 2015). However, by taking into
consideration the Europe’s current economy, which could appear as threats to the company’s
growth in the region. Additionally, the slowing down of the economy of China threatens the
growth of economy is Asian subcontinent. In this economic aspect, the external factor threatens
the business’ growth.
Social factors
In order to grow and prosper the Company also has to take into account many important
social factors. McDonald’s has taken into account that their target consumers include people
coming from different income backgrounds. So, the Company realized that the customers with
less income cannot afford the products if the prices are very high. Hence, McDonald’s decided to
set their products at reasonable price so that it can be afforded by people of all income groups. It
was an effort by the company to bridge the gap between the rich and the poor.

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In addition, McDonald’s has the chance to bring improvements in its products mix to bring
satisfaction to the diverse target market. Nevertheless, the company has the opportunity to bring
improvements in its products (Sachdeva, 2015; Eva et al, 2014).
Technological factors:
The success part of McDonald’s depends on the application of technology. In terms of
technology, the company will have to consider some of the important factors like carrying on the
constant research and development activities. The company will have to make sufficient amount
of investments, so that it can carry on a huge amount of research and development activities and
bring in sufficient amount of technological advancements in its production process. At the same
time, the company can enhance the automation in order to maximize its productivity (Sachdeva,
2015). Additionally, the company can bring improvements in its services of mobile to tap more
clients through its websites or the mobile application. In the field of technological aspect, the
company seeks to explore more opportunities for growth.
Environmental factors
There are three most important environmental factors that can affect the company. They
are increasing interest for the corporate environmental programs, any kind of change in the
climate and increasing emphasis on the sustainable business strategies (Sachdeva, 2015). The
company can also work on its corp. Climate change is a very big threat because its production
depends on many farm based products. So, any climatic change can hamper agriculture and in
turn their production as well. McDonald’s will also have to work on its supply chain to deal with
the climatic changes in a better way.

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Legal factors
The company must follow the legal requirements, which are imposed on the macro
environment such as new minimum wage levels in US, the rules, regulations and policies in
school and workplaces and also the animal welfare regulation. McDonald’s must make sure that
they promote proper animal safety and animal welfare among the meat producers (Sachdeva,
2015).
(Earnings and price related graph of McDonalds) (Sachdeva 2015)
Conclusion

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Thus, PESTLE analysis can identify both threats and opportunities to the growth of
industry and accordingly, they are needed to be taken into consideration and apply them to gain
the strategies to make its growth better.

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References
Eva, M., Hindle, K., Paul, D., Rollaston, C., & Tudor, D. (2014). Business analysis. BCS.
Sachdeva, A. (2015). Evaluation and selection of differentiation as a strategy for
McDonald’s.Sinaheightsuniversity. .