(i) The general environment is composed of dimensions in the broader society that influ-

ence an industry and the firms within it.Dimensions in the broader society that influence within
political, environment, economic, technological, socialcultural, demographic and physical.

 Economical Factors
This includes GDP trends; interest rates, money supply, inflation rates, unemployment
levels etc are some of them. If the interest rates were high, people would tend to save
more and would affect the consumption income. When the disposable income is reduced
demand for food items would reduce this in turn would affect McDonald’s adversely
.When the inflation rates are low the prices for products would reduce over time and
would increase the demand for consumption goods

Political – Legal Factors

This would include environmental protection laws, tax laws, government subsidies,
foreign trade regulations, stability of government etc. When the tax imposed on

Eg. throughout the 1970’s McDonald’s became involved with a lot of charity word, further
in 1974 they established a charity called Ronal McDonald House as temporary housing
for the families of ill children receiving treatment at nearby hospitals

Technological Factors
This involves spending on research and development, patent protection, new
developments in technology, productivity improvements etc.

Eg. McDonald’s has added improvements for food processing such as filet o fish and
burgers.

Sociocultural Factors
This involves lifestyle changes, career expectations, consumer activism, growth rate of
population, age distributions, regional shift in population etc.

Eg. McDonald’s caters its menu in different countries around the world and they cater
specialized menus to suit different cultures such as in India non-vegetarian menu
includes only chicken and fish and not beef as they consider cow as sacred.

Task Environment
McDonald’s task environment includes its suppliers of raw material such as meat items,
customers, competitors such as Burger King, KFC, Juicy burger etc.

Eg. McDonald’s has created alliances with Disney, Coca-Cola etc to fight back the
immense competition.
When analyzing the industry of McDonalds it is vital that the most affected external
factors are social, technology and economic and the affected factors under task are
competitors and customers .This is due to the impact it has on the company’s
performance.

For example, Mac Donald’s started its operations in china china’s government wanted establish its
own fast food market and felt that western companies like McDonald’s could spoil its plans. In 1990,
the entry of McDonald’s into china resembled the same bitter experience it had in Russia but later it
moved on very smoothly in china, as it has moulded itselff so nicely with Chinese culture that
Macdonald’s opened 96 restaurants in China, totaling 430 restaurants altogether in the by first six
months of 2001.

(ii) The industry environment is the set of factors that directly influences a firm

and its competitive actions and responses: the threat of new entrants, the power of

suppliers, the power of buyers, the threat of product substitutes, and the intensity of

rivalry among competing firms.

(iii) How companies gather and interpret information about their competitors is called

competitor analysis. he owner of Bibbentuckers, Dallas’ high-end dry cleaning and laundry
establishment, Robert Byerley wanted to open his own dry-cleaning business but found that the
competition is huge. To make his business stand out, he conducted a thorough research on the
industry, collected information on the competitors’ services and inputs from potential customers.
Learn how to do your own market research with this course. Robert’s competitive analysis focused
on the following points, How could his business offer something different to the customers? What
are the other dry-cleaners offering and what is the customer opinion on them? How to survey the
target market and get key inputs on customer preferences?

For example, that McDonald’s needs to do a better job of analyzing and understanding its

general and industry environments. McDonald’s apply a number of strategies and tactics to compete
with its competitors. For instance, branding is a big asset to the restaurant. McDonalds is one of the
most famous brands in the world. People around the world know it at the back of their mind. It also
tries to apply cost leadership strategy to offer customers food and beverages at prices that
competitors struggle to match. Its speedy delivery of food is also useful to battle out competition.

(iv) An opportunity is a condition in the general environment that, if exploited

effectively, helps a company reach strategic competitiveness. A threat is a condition in the general
environment that may hinder a company’s

efforts to achieve strategic competitiveness. For example, a coffee cafe competes mostly on price
and location. They see an oppoutunity to improve quality of food and customer service to prevent
bad review. Also, the café see opportunity to expand their business in new location across the city.
Threats are mostly related to poor customer service and low food quality that result in bad review
and declining the business. The staff of café often on leave will result the café no enough staff and
it’s difficult to recruit the new staff. This has caused café incur poor customer service.

There are many business growth opportunities enumerated in this PESTEL/PESTLE

analysis of McDonald’s Corporation. It is recommended that the company increase its
market penetration in high-growth markets. For example, increasing the number of
McDonald’s restaurant locations in high-growth developing countries in Asia can contribute
to overall growth. This recommendation also deals with the opportunity to grow based on
rising disposable incomes in various markets around the world. To address the opportunities
that come with ecological trends, it is recommended that McDonald’s expand its corporate
social responsibility programs. The strategic goal should include improving the
environmental impact of the business, while strengthening the brand and consumer
perception about the business.

McDonalds existing organisational strategy is to create better service restaurant operations,

menu varieties, and better beverage choices such as hot beverages (hot chocolate, latte etc).
Further, they have utilised the marketing mix in order to achieve the marketing strategy by
operating the outlets for longer hours, offering everyday value meals and enhancing
efficiency in drive-thru.

In addition, they focused on becoming the lowest cost producer by minimising the waste;
McDonalds reuse many of the disposable items to create higher value. Company focused on
increasing profitability through minimising cost as per Porters generic strategies. McDonalds
is famous for being differentiation focus as they offer customised products to its customers
throughout the world.
However, in threat. The external factors and trends outlined in this PESTEL/PESTLE
analysis point to various threats relevant to McDonald’s. A recommendation to address the
combined threat of governmental guidelines for diet and health and evolving public health
policies is to continually improve the company’s menu. The ultimate aim is to make all
McDonald’s menu items healthful. This recommendation also addresses the threat linked to
the healthy lifestyle trend, and the threat associated with health regulations in workplaces
and schools. Regarding the threat of cultural diversity, it is recommended that McDonald’s
improve the flexibility of its international operations to ensure that menu items match target
consumers’ preferences. Also, the company can further diversify its supply chain to address
the threat of changes in climate conditions in some regions.