Pestle Analysis Of Mcdonald Company

Introduction

This study is regarding the PESTLE analysis of McDonald’s to review the significant areas that influence the food sectors. The Pestle analysis model is used as it supports the management of strategy by acknowledging external factors which showcase threats or opportunities which is linked with macro-environment of business which includes Political, Economic, Social, technological, Legal and Environmental factors (Gillespie, 2007). By the means of PESTLE analysis of the McDonald’s corporation, one can focus on the significant trends which impact the food sectors. This analysis can also help the company to develop appropriate strategies according to the business environment.

Company’s Background

McDonald’s is one of the largest fast food chains globally with approximately 35,000 stores in around 119 countries. With an estimated value of brand of about 126 billion USD, the company also possess recognition with its yellow and red motif with characteristic arched M which is liked my kids specially (McDonalds, 2017a).

PESTLE Analysis

Political Factor: Since McDonald’s is a food chain so it must follow the health and hygiene regulations put forward by the UK Government. The company also serves fast food to its customers which are subjected to greater health risks so it must take health concerns into consideration (Anaf & et.al., 2017).

Economic Factor: The local, national and international conditions have a direct impact on the economy of the company because of its global presence (McDonalds, 2014). The tariffs rates of the imported resources and other foreign incorporations taxes also affects the company’s operation. The instability in economy and poor rate of employment also declines the success of the company (Ruddick, 2016).

Social Factor: The evolvement of lifestyle possesses a direct effect on the sales performance. More number of people of the UK are turning away from Junk food towards a low-calorie diet. It is essential for the company to reshape its menu as a greater number of people are getting conscious regarding their health (Macmillan, 2012).

Technology Factor: The advancement in technology and its usage such as digital marketing and social media can attract a greater number of customers. The usage of digital technologies can also permit the chain of restaurant to open ordering and payment modes which can enhance convenience of customers and enhance sales (McDonalds, 2017b).

Legal Factor: The company need to follow the legal regulations, food standards and regulations for hygiene. Moreover, it should also adhere with many other legal requirements such as labor and employment laws, tax as well as corporate laws (Coombes, 2014).

Environmental Factor: The rising interest of the people towards the corporate social responsibility could act as opportunity for the company to position its brand (McDonalds, 2017c). Moreover, Company should also make its supply chain, operation and logistics sustainable economically to attain larger base of customers (Hooton, 2014).

Conclusion

In conclusion, it had been reviewed that McDonald’s faces lots of challenges which includes health regulations, social concerns regarding unhealthy products, unsuccessful marketing campaigns on digital medias and increased rates of tariffs. After understanding such challenges, it could be stated that McDonald’s company should make usage of advanced technology and stronger economy to attain success and retain its position in these sectors.

References

• Anaf, J. & et.al., 2017. Assessing The Health Impact Of Transnational Corporations: A Case Study On McDonald’s Australia. Globalization and Health, Vol. No. 13, No. 7, pp. 23-40.
• Coombes, R., 2014. McDonald’s Profits Drop And Mars Abandons King Size Bars. BMJ: British Medical Journal, Vol. No. 329, No. 7470, pp. 820.
• Gillespie, A., 2007. PESTEL analysis of the macro-environment. Foundations of Economics. Oxford University Press.
• Hooton, C., 2014. “Those ‘human meat found in McDonald’s factory’ stories and Facebook posts are a hoax, obviously”. [Online] Available at: http://www.independent.co.uk/life-style/food-and-drink/news/those-human-meat-found-in-McDonalds-factory-stories-and-facebook-posts-are-a-hoax-obviously-9784592.html [Accessed on 14 March, 2020].
• McDonalds, 2017a. ‘Annual Report 2016’. [Online] Available at: http://corporate.mcdonalds.com/content/dam/AboutMcDonalds/Investors/2016%20Annual%20Report.pdf [Accessed on 14 March, 2020].
• McDonalds, 2017b. ‘Our company’. [Online] Available at: http://corporate.mcdonalds.com/mcd/our_company/our-ambition.html [Accessed on 14 March, 2020].
• McDonalds, 2017c. ‘Click and Collect’. [Online] Available at: https://www.mcdonalds.com/gb/en-gb.html [Accessed on 14 March, 2020].
• McDonalds, 2014. McDonald’s International Franchising. [Online] Available at: http://www.McDonalds.co.uk/ukhome/Aboutus/Franchising.html [Accessed on 14 March, 2020].
• Macmillan, G., 2012. How McDonald’s created a social media success with questions campaign. [Online] Available at: http://wallblog.co.uk/2012/08/20/how-McDonalds-created-a-social-media-success-with-questions-campaign/ [Accessed on 14 March, 2020].
• Ruddick, G., 2016. ‘McDonald’s offer staff the chance to get off zero-hours contracts. [Online] Available at: https://www.theguardian.com/business/2016/apr/15/mcdonalds-offer-staff-the-chance-to-get-off-zero-hours-contracts [Accessed on 14 March, 2020].