BTEC Business & Law Unit 1 Exploring Business Assignment 2
Introduction
I will investigate McDonald's advantages, disadvantages,
opportunities, threats, and any other elements that might have an
impact on the business the environment. McDonald's is the largest
restaurant chain in the world based on revenue, serving more than
69 million customers daily in more than 100 nations. In more than
100 countries, the McDonald's Corporation operates and
franchisees McDonald's restaurants. In 1948, the McDonald
brothers, Richard and Maurice, built the first McDonald's restaurant
in San Bernardino, California. A high-quality, regionally suitable
cuisine with a range of price points is available at McDonald's
locations. The worldwide McDonald's system includes both company-owned and franchised eateries.
McDonald's is primarily a franchisor because independent franchisees presently own and operate
more than 90% of its restaurants. They provide cold drinks, wraps, burgers, and ice creams which are
suitable all year round.
P4: Discuss the internal, external and competitive environment on a given
organisation.
P5: Select a variety of techniques to undertake a situational analysis of a
given organisation.
M3: Assess the effects of the business environment on a given organisation
External Environment
I'll be undertaking a PESTLE study for McDonald's in this segment. A management framework and
diagnostic tool is PESTLE analysis. The results of the analysis will help you better understand external
factors that could affect strategy and decision-making. Political, Economic, Social, Technological,
Legal, and Environmental make up this acronym.
A PESTLE study has the advantage of providing a consumer with a more in-depth insight. Without a
PESTLE analysis, environments that directly and indirectly affect the company can be disregarded. For
example, when developing a prototype for your product, you may overlook consumer protection
requirements and safety. You may also be ignorant of the technological hurdles that rural clients face
in comparison to those in densely populated areas. Even if your product excels in its existing
environment, exporting it to another region of the country can be financially catastrophic. PESTLE
analysis aids in the examination of a number of critical aspects that may impact the effectiveness of
your product launches. It encourages the development of strategic thinking in order to gain a better
understanding of strategic planning. Another advantage is that it takes benefits of opportunities.
External opportunities arise which can be found and capitalised on by doing a PESTLE analysis on
external surroundings and a firm's business (model). If you use PESTLE research to assess social and
technological trends, you can learn that your target market is changing to a new social media
channel, for example, giving you the opportunity to design a marketing strategy ahead of your
competitor; therefore providing the chance to win over consumers before anyone else.
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,BTEC Business & Law Unit 1 Exploring Business Assignment 2
PESTLE analysis has the drawback of requiring several individuals. To achieve the best results, it is
vital to have knowledge from multiple areas. Furthermore, since different people endure
situations from different perspectives, the PESTLE analysis necessitates a range of viewpoints. The
business must pay all salaries for employees involved in the analysis. These employees' expertise
could have been used for other jobs inside the company. Subjective analysis is another disadvantage.
The perspective and judgement of the person conducting the evaluation will likely have an influence
on the conclusions of the study. The results are arbitrary, and everyone will interpret them differently
however if they’re are misinterpreted, the company suffers significant losses
Political factor
Political issues are one of the external limitations impacting a corporation. Government choices and
the political atmosphere in the location where the business works or seeks to operate have an
impact on them. Governmental tensions between countries also have an effect on McDonald's.
Recent tensions, for example, have persisted between the USA and the United Kingdom therefore
contact with Russia might also be difficult for them. Despite having locations all over the world,
McDonald's is an American enterprise. Governmental disagreements could alter the terms of existing
trade agreements, making it difficult for McDonald's to operate internationally.
Another political factor is that McDonald's must adhere to political regulations and demands in over
a hundred nations. They are obligated to the same health and sanitary regulations as any other
restaurant. If the meal criteria were not met, they would be required to shut their store. Every food
and health regulation must be met by their employees wherever they work. Government pressure
on fast food stores arises from the high sodium and sugar levels of their menus. Sodium and sugar
are linked to a variety of common health issues, including type 2 diabetes, hypertension, and heart
disease. When consumed in excess, these foods can lead to obesity, strokes, and cardiac disease. As a
coping tactic, McDonald's is presently adding more "healthy" options to its currently large menu. For
instance, you can now add extra protein to their fruit smoothies. Offering alternatives is one way to
adjust to evolving public health agreements, but doing so may increase operating costs as well for
them aswell.
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, BTEC Business & Law Unit 1 Exploring Business Assignment 2
Economic factor
McDonald's success is influenced by factors other than the American economy. Each country's
performance is affected by the state of its economy. They must decide whether buying locally
sourced raw materials or importing them is the more desirable approach. The cost of import tariffs
and international incorporation fees strongly influences this decision. McDonald's suffered financial
losses in 2008 as a result of the economic downturn. People were scrambling to find new jobs, with
the fact that disposable income was at an all-time low. Subsequently an increase in consumer health
awareness has harmed the McDonald's brand's reputation. To offset their image of offering "junk
food," several fast food restaurants are broadening their menus to include healthier alternatives.
McDonald's should also consider the local rate of unemployment in each location. The company is
known for having a high turnover rate, which implies that people are hired and fired on a regular
basis. Although it is a repeated theme that McDonald's is "always hiring," this may provide some
optimism for locations with high unemployment rates by providing consumers with the opportunity
to earn a living and support their family.
Social factor
In areas where McDonald's competes, societal trends are changing. Consumer tastes are shifting,
and certain societies have distinct cultures from others. They must tackle these issues by conducting
market research that will help them understand the market's wants if they are to remain prominent
in the marketplace. Furthermore, they must adapt their menu to match client needs; some
customers may be prohibited from eating pork or beef because of religious beliefs, therefore
McDonald's should be aware of this and provide vegetarian and vegan alternatives. Furthermore,
some customers may be looking for healthy options, and if McDonald's menu does not meet these
needs, it will make them a less tempting choice for those who are health conscious. McDonald's
should be aware of this social responsibility requirement. In response to these advancements,
McDonald's offers customers a range of selections based on individual preferences.
Another societal factor affecting McDonald's is the changing demographics of the population.
Consumers of various ages display different habits of goods they purchase. McDonald's caters to a
diverse customer base, including children, adults, and entrepreneurs. McDonald's offers a menu
meant to satisfy people of all ages; they provide several menu options for individuals of different
ages, such as the possibility to order a happy meal along with Disney toys and other attractive
items for young children, and they have recently launched a happy meal for adults as well. The
conventional kids' meal developed as a ruse to attract parents with little children for a quick lunch or
dinner. The Happy Meal gave children a sense of freedom while also helping McDonald's create a
reputation for offering family-friendly food. The mania over happy meals, however, was not for the
food inside the boxes, but for the toys that came with them. Anyone who grew up eating McDonald's
will tell you what their generation's favourite Happy Meal toy was. Small objects such as stencils,
puzzle locks, and spinning tops were the first of the Happy Meal toys. However, thanks to a number
of innovative collaborations, these gadgets have become better over time.
For teenagers and students, some of the meals are quite frugal and inexpensive, and depending on
their attitude towards saving, they might spend quite a bit of money on food and other needs or
choose to save instead. They can also get free wifi to browse the internet. Adults and
businesspeople often want things done quickly and easily, and McDonald's caters to this market by
providing fast food as well as a drive-through choice for busy consumers.
Technological factor
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