PESTEL Analysis of MaCdonalds 1. OVERVIEW McDonald’s Corporation is the world’s largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated by Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth.
A McDonald’s restaurant is operated by either a franchisee, an affiliate, or the corporation itself. The corporation’s revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald’s revenues grew 27 percent over the three years ending in 2007 to $22. 8 billion, and 9 percent growth in operating income to $3. 9 billion Currently, its divisions operate in all over the world in beverages, snack foods, and restaurants.
The corporations increasing success has been based on high standards of performance, marketing strategies, competitiveness, determination, commitment, and the personal and professional integrity of their people, products and business practices.
McDonald’s believes their success depends upon the quality and value of their products by providing a safe, whole some, economically efficient and a healthy environment for their customers; and by providing a fair return to their investors while maintaining the highest standards of integrity. 2.
PESTEL Analysis of MacDonald’s India * Political McDonald’s entered India in the year 1996 when the fast food retail market in India was at a nascent stage. Encountered with several challenges in the beginning in terms of adapting to the tastes, preferences and culture of the local customers, changing the perception of Indian consumers towards American food habits, obstruction from political parties, issues with distribution, designing a proper supply chain to training the employees on McDonald’s standards. McDonald’s has it different policies rules and egulations, and because of that it has its own license of restaurants which is controlled by the government for health, workers protection, and environment. Even then there was some quarrel in the McDonald’s franchise in India. There where some violation of religious laws pertaining to the contents of food. According to them the meat used by them in their foods was completely hateful to the Hindu religion in the said market. And also same situation were faced in for using ham and pork in there foods because using this content are not accepted by the peoples as it is in opposition to Muslim religion.
So, this is also one type of political factor faced by McDonald’s. There are also other studies those points to the infringement of McDonald’s Stores with reference to the existing employment laws in the target market. Like any business venture, these McDonald’s stores have to contend with the issues of employment procedures as well as their tax obligations * Economical Organisations in the fast food industry are not excused from any disputes and troubles. Specifically, they do have their individual concerns involving economic factors.
Branches and franchises of fast food chain like McDonald’s has to face many problems due to economic factors such as inflation, exchange rates, recessions, income and interest rates. The customers consequently are faced with a stalemate of going over their individual budgets whether or not they should use up more on these foreign fast food chains like McDonalds. Hence, these chains may have to put up with the issues of the effects of the economic environment. McDonald’s import much of their raw materials into a specific country’s territories if there is a dearth of supply.
Exchange rate fluctuations will also play a significant role in the operations of the company. The company will also have to consider the economic standing of the country on which they operate on. The rate at which the economy of that particular country grows determines the purchasing power of the consumers in that country. Hence, if a franchise operates in a particularly economically weak country, their products shall cost higher than the other existing products in the market, then these franchises must take on certain adjustments to maintain the economies of scale.
However in case of India the company has been able to maintain a constant level of prices for their products. * Socio-Cultural Factors McDonald’s indulge a particular variety of consumers with definite types of personalities. It has also been noted that the company have given the market like India, an option with regards to their dining needs. McDonald’s has launched a sensibly valued set of food that tenders a reliable level of quality for the respective market where it operates customers. the peoples who were below 35 age were the most frequent customer as a food was like by them, and as there was a free gifts for the children’s so they were the next high customers. McDonald’s is becoming a multi-faced character of business. They establish a good system in determining the needs of the market. The company uses concepts of consumer behaviour product personality and purchasing decisions to its advantage which is clearly evident in case of India as the company was quick in removing their Pork and Mutton products from India’s menu.
It is said to have a major influence on the understanding of the prospective performance of the organisation in a particular market. The main intention of the company it’s to earn profit and it is possible through the more numbers of customer’s. It does not only serve the peoples but also bring changes in people’s way of living, faction and tradition. * Technological Factors McDonald’s uses very low technology but uses its idea to generate demand for their products. McDonald’s are inclined to interest the younger populations more.
The company’s key tool for marketing is by means of Online Facebook and Google ads, Collaboration with websites like Snapdeal and Timesdeal to promote sales in India, television advertisements, banners and hoardings. The existence of ‘play spots’ as well as ‘toys in meals’ offered by the company shows this actuality. They employ animated depictions of their characters like Grimace, Ronald and Ham burglar. Other advertising operations employ popular celebrities to promote their products. The ‘like’ has become endorsers for McDonald’s worldwide “I’m loving it” campaign.
The improvement of the inventory system as well as its supply chain allows the company to operate in an international context. * ENVIRONMENTAL FACTORS Market never remain stable because it’s always goes on changing depend on the type of product produced in the business. The social responsibilities of McDonald’s on the country are influential to the operations of the company. These involve accusations of environmental damage. Among the reasons why they are charged with such claims is the employ of non-biodegradable substances for their drinks glasses and Styrofoam coffers for the meals.
Several civic groups in India have made actions to make the McDonald’s franchises in India aware of the rather abundant use of Styrofoam containers and the resultant abuse of the environment. * LEGAL FACTORS There has been the recurrent bellowing in opposition to the fast food industry. This has similarly made McDonald’s apply a more careful consideration on their corporate social responsibilities. On the whole, this addressed the need of the company to form its corporate reputation to a more positive one and a more socially responsible company. The reputation of McDonald’s is apparently a huge matter.
Seen on the website of the company, it seems that they have acquired strides to take in hand the key social censures that they have been berating them in the past decades. The company has provided their customers the relevant data that they need with reference to the nutritional substances of their products. This is to attend to the arguments of obesity charged against the products of the company. In the same way, the consumers provided freedom in choosing whether or not they want to purchase their meals. This is tied up with the socio-cultural attributes of the market on which they operate.
For instance, operations in predominantly Muslim countries require their meat to conform to the Halal requirements of the law. In the same regard, those that operate in countries in the European Union should conform to the existing laws banning the use of genetically modified meat products in their food. This was prime reason which forced McDonalds to eliminate beef, pork and Mutton out of India’s product menu. Other legal concepts like tax obligations, employment standards, and quality requirements are only a few of important elements on which the company has to take into consideration. Otherwise, smooth operations shall be hard to achieve.
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