What are the external forces of McDonalds? Consider how the external forces are
ID: 425577 • Letter: W
Question
What are the external forces of McDonalds? Consider how the external forces are affecting profitability using PESTEL analysis? What are the external forces of McDonalds? Consider how the external forces are affecting profitability using PESTEL analysis? What are the external forces of McDonalds? Consider how the external forces are affecting profitability using PESTEL analysis? What are the external forces of McDonalds? Consider how the external forces are affecting profitability using PESTEL analysis? What are the external forces of McDonalds? Consider how the external forces are affecting profitability using PESTEL analysis?Explanation / Answer
Ans: Outside influence that can impact a business is external factors. These external forces have the ability to impact strategic goals and objectives of a company. McDonald’s is one of the world’s most successful business corporations. For McDonals these forces are affecting externally,
(i) Technological factor :- This is the cost involved in research and development, and spending on productivity improvement.
(ii) Competition :- There is increase in a competition and competitors have brought variation in product and services.
(iii) Social environment :- These are the age distribution, lifestyles and regional shift etc.
(iv) Culture and Religion :- Different countries have various cultures such as in India non-vegetarian menu includes only chicken and fish and not beef as they consider cow as sacred.
(v) Economical environment :- This includes GDP trends, inflation rates and interest rates. If interest rates are high, people would save more and would affect the consumption income.
(vi) Political & Legal Factor :- This includes tax law, government subsidies, foreign trade regulations etc.
PESTEL stands for :-
P-Political
E-Economical
S-Social
T-Technological
E-Environment
L-Legal
PESTEL analysis helps McDonald's to identify and deal with significant threat.
(a) Political Factor :- McDonald's have to face evolving public health policies as a threat. McDonald’s have to improve the healthfulness of its products. Improved and increase in international trade can enhance global supply chains of McDonald's as opportunity.
(b) Economical Factor :- McDonald’s needs to diversify its supply chain because of environmental effect caused by climate change. This remains a big threats to McDonalds supply chain.
(c) Social Factor :- Healthy lifestyle is a threat as many competitors have improved the healthfulness of products. Increasing cultural diversity and widening wealth gap is a opportunity for McDonald.
(d) Technological Factor :- McDonald’s have increase in investments in Research & Development. McDonald must adress moderate R&D activity, increase in sales through mobile devices and business automation.
(e) Legal Factor :- McDonald's must address animal welfare regulatory effects on the supply chain. McDonald have threats of higher cost and prices because of higher minimum wages.
McDonald face all these threats in aspect of PESTEL analysis.
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