TASK ONE A

PESTEL analysis is a tool that gets to be used by companies to evaluate its external
environmental factors that affect its operations. PESTEL is an abbreviation that represent
political, environmental, social-cultural, technological, economical and legal factors. These
factors are not perceived to be either threats or opportunities but merely things that a business
can use to its advantage or treat as a problem subject to the business understanding of the
factor, Gillespie A. (2007).

Political factors are usually how and to what extent the government gets involved in the
running of the affairs of the economy. Political factors may include tax policy, trade
agreements, labor laws, trade restrictions, environmental law etc. political factors play a
major role in the running of the business and gives directions on how a business can be
managed and what type of policy to implement. Strict political factors which might seem
unfavorable might prove to be a danger to the survival of the business.

Political factors can seriously impact any business in the world, restaurants are not
exceptions. Once the business (restaurant) identifies the guidelines that affects its business
activities, it can take proper assessments to lessen the impact of such guidelines. From
purchasing, cooking and packing to delivery, the restaurant is liable to take care of the food
products.

Economic factors include interest rates, disposable income of consumers, exchange rates etc.
the economic factor gets to be distinguished between micro and macro-economic factors.
Mostly companies use this factor as a bench mark of either entering or exiting the market.
The price of inputs, expansion of businesses gets to be mostly affected by this factor.
Economic factors gets to have a short or long term effects on the running of the company as it
presses much distress on consumer’s purchasing power, affecting demand and supply model
of the economy thereby affecting the pricing of the output of the company’s products, David,
F. (1993).

One of the biggest factors of the economic factors on a restaurant business is the customer’s
disposable income, if clients have a big disposable income they will have time and money to
go out with families and order food at a local restaurant. Inflation rate gets to affect a lot of
business and the food industry gets not to be left out, when inflation s high operations costs of
the restaurant becomes high as it affects the prices if the restaurant ingredients there by
affecting the prices of the business menu which further leads to people (customers) avoiding
eating from restaurants.

Success of a business is dependent in an environment a business is operating in. demographic

features, customs and norms of an environment contributes to its growth. Social factors
which are also known as socio cultural factors look at the beliefs and attitude among the
people in a certain are (population). Social factors are believed to be the biggest factors a
marketer of an organization can get to analyses, examples of demographic factors are
population size and distribution, income distribution, cultural barriers etc. companies get to
use this factor to make identify their target market by reviewing the desires and preferences
of the demographic groups (people who are working in a specific area, university students or
the elderly) who might be interested In the company’s products. Socio-cultural factors are
important in that they are directly involved in how sales persons (marketers) understand
consumers and what motivates them.

Many factors get to affect the restaurant business activities either in a good way or bad way.
Considering different type of customers with different needs, it’s good for a restaurant to
carry a research on what type of food is mostly on demand in a certain area e.g. junk of
organic food and the bigger chunk of its customers is it college students or people with a busy
lifestyle who work late hours in offices. Example of other social factors include vegetarians,
pet loving and transgender customers. In a food business it is actually very difficult to keep
all type of customers happy as they have all different needs.

With an increase in technological innovations, companies can make use to explore new
opportunities on the market as well as easily share information (advertisement) about the
company’s products through the use of internet media platforms eg social media. With
technology, values and interest are slowly shifting and differ from county to country creating
a pool of opportunities for companies to tap into new markets easily and provide a vast of
information about the products and services of a company which can be easily accessed.
Technological advance has not only change how business operate bit has also changed the
system of how businesses and suppliers conduct business and global-positioning technology
has helped companies manage large projects more accurately. Customers and firms have
practically an infinite access to information, and this access has enabled customers to make
informed buying decisions and challenged firms to develop ways to analyze the large
amounts of data their businesses generate.

Environment factors has constantly been a major part of business activity and they are actors
that gets to offer resources (natural) for a smooth running of business (manufacturing and
energy production). Firms are developing technology to operate more cleanly and using
fewer resources.

Legal factors in most cases get to correspond with the political factors. Otherwise it does not
mean that the factors identify the similar issues. Although labor laws and environmental
regulations have deep political connections, other legal factors can impact business success.
For example, in the streaming video industry, licensing fees are a significant cost for firms.
TASK ONE B

In a business, there are certain factors that gets to be controlled such a salaries, sales goals,
and time of reporting for work, nevertheless the business gets to be affected by the external
factors of the environment its operating in. PESTEL analysis provides backing to the strategic
management of the business by detecting external factors that acts as threats or opportunities
centered on the Marco environment of the restaurant/ business relating to political, economic,
social, technological, legal, and environmental factors, Gillespie A. (2007). Hence in fast
foods business, restaurants should engage in policies that are aiming at maximizing benefits
in the environment its operating in. the policies should intend to report about the external
factors of the business and the competition involving firms operating in the same business.

This section will look at the PESTEL analysis of McDonald’s Corporation and how it gets to
influenced its operations, Coombes R. (2004).

Political factors

Political factors which are defined as factors that influenced by government actions and
policies and affect the macro environment of a business which is McDonald’s in our case.
The rate at which the business develops depends on the level of government involvement. In
a fast food industry like McDonald’s, some of the most substantial external political factors
are increase in international trade agreements, government guidelines on diet and health and
evolving public health policies.
The analysis gets to pinpoints some government strategies for diet and health as either threats
or opportunities for the business. For instance there might be policy from the government
which might act as a criticism regarding the effects of McDonald’s products on consumers.
However this threat can also act as an opportunity as it can drive the restaurant to improve on
its products. Consistent changes in McDonald’s generic competitive strategy and intensive
growth strategies can address this external factor. In relation, governments have evolving
public health policies, which present a threat and an opportunity for the restaurant chain
business. McDonald’s marketing mix or 4P already includes healthful options, such as salads,
but the company can add more to improve its status in addressing this political external
factor. This aspect of the PESTEL/PESTLE analysis of McDonald’s Corporation shows that
political external factors present opportunities despite threats against the business.

Economic Factors

This section looks at the economic factors pertaining the macro environment of McDonald’s.
Economic change is inevitable, the changes in economic conditions influences the business
either directly or indirectly. Slow but stable economic growth gets to act as an opportunity for
McDonald’s as it gives the business the chance of growing and increasing its stability on the
market. The business gest to record mass profits from the US economy as well as from the
stable recovery and growth economies of some European markets. McDonald’s being a
global fast food business, economic downturns of the global economy gets to affect it badly
and the Asia being one of the biggest markets for McDonald’s the slowing down of the
world’s economic growth due to the outbreak of the coronavirus acts as threat to the business.
In the analysis of PESTEL analysis, economic factors gets provide opportunities for
McDonald’s the fact that it is a global fast food business.

Social or Sociocultural Factors

Social cultural factors are simply social conditions that gives sustenance to McDonald’s
business. Social factors influence customer behavior thereby affecting the macro environment
of McDonald’s business in a form of revenues. Basing the social factor on the rising
disposable income of the consumers, McDonald’s has the opportunity to grow the business as
with rising disposable income most people would prefer having fast foods at a restaurant than
at home. The restaurant business has the opportunity upturn its flexibility in product
designing in order to suit the needs of its customers in different markets around the globe.
McDonald’s corporate social responsibility strategy and stakeholder management initiatives
partially counteract the negative effects of such social trends on the business.

Technological Factors

Technological factors looks at the influence of technology and connected trends on the
external or macro environment of the business. McDonald’s Corporation’s success depends
on business adaptation to maximize the benefits of technological trends and resources.
McDonald’s has the opportunity to increase its research and development investments to
increase business effectiveness and efficiency. Using the advancements in technology the
business can improve its mobile services to reach more customers through its mobile apps.
Based on the technological trend of increasing sales through mobile devices, the company
can expect revenue growth through mobile channels. In this technological aspect of analysis,
McDonald’s has major opportunities to grow its fast food restaurant business.

Environmental Factors

This refers to the trends connected to the natural environment, and how they affect
McDonald’s macro-environment. This company analysis examines the influence of
environmental trends on businesses and consumers. McDonald’s Corporation can improve its
environmental programs and sustainability to strengthen its brand and business performance.
McDonald’s can use this factor address the opportunities related with the rising interest for
corporate environmental programs, and the increasing emphasis on sustainable business
practices. The environmental external factors highlight corporate social responsibility
opportunities, although McDonald’s also needs to further diversify its supply chain to address
the effects of changes in climate conditions.

Legal Factors

This analysis pertains to the impact of regulations (laws) on firms. Alterations in legal
systems and new laws shape the macro-environment of businesses by imposing new
requirements.

Health regulations impose limits on the accessibility and availability of fast food in some
workplaces and schools. This legal trend threatens McDonald’s revenues from these market
segments. McDonald’s faces the threat of higher minimum wages, which lead to higher costs
and prices. However, this external factor has limited influence on the company’s business.
Overall, the legal external factors in this analysis impose major threats that McDonald’s
strategies must address.

TASK TWO A

SWOT is a tool that is used to evaluate the business Strengths, Weaknesses, Opportunities,
and Threats. A proper analysis makes the business to be at an advantage which further lower
the chances of failure. Through SWOT analysis, a business can come up with a strategy
differentiates it from its competitors letting it compete swiftly on the market. The four aspects
of the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis are discussed
below.

Strengths

Usually the strength of an organization is something that it does well or something an

organisation does different from its competitors. These can be advantages which an
organization might have on other organisation which can in the form of hardworking staff,
quality of the organisation product etc. when undertaking this aspect of SWOT analysis, an
organisation has to answer question like, what does it do better than other companies? What
values motivates the business of the company? What best low cost resource strategy to
implement in order to tap what other companies cannot? An aspect of an organization is only
a strength if it gives an organization clear advantage over other organizations for instance, if
other organization are producing good quality products as your company, then a good quality
production method is not your strength but a requirement.

Weaknesses

Like strengths, weaknesses are inborn (internal) structure/feature of an organisation. Hence

weaknesses focuses mostly on the human resource, structures and processes of a company.
The company can take time to think about what it can improve internally and to avoid
( practices ), scrutinize how and why other players in the industry are doing fine ( better than
your company) and find out what image the customers/ people on the market have about the
company.

Opportunities

Opportunities are external factors that an organization can take advantage. They are merely
chances for some rather positive things to happen of which the organisation has to claim for
itself. Since opportunities gets to come about due to situation outside the company, it requires
a company plan ahead and foresee what might happen in the near future. Opportunities gets
to arise from the market the company is serving or in the technology it’s using (technological
innovations). The company’s ability to identify opportunities gets to make a huge difference
to the organization and gives it the ability to compete and lead in the market its operating.
Opportunities are not restricted only to technological advancement but also changes in
government policies related to the sector the organization is in, any changes in social forms,
population profiles and lifestyle.

Threats

Threats comprise of external things that affect the business of an organization including
changes in market supplies (supply chain problem) or lack of qualified human resource on the
market. For an organization, it is important to keep an open eye on these things and take
action against them before they grow into a big problem for an organization. Changes in
technology is both an opportunity and a treat to an organization, the business has to identify
obstacles that might lead to its products not selling on the market and get to check up on the
quality of the product from time to time and see if there is need for change (increase the
quality standard of the product) in order for a product to stay in the lead on the market.

TASK TWO B

The following is the analysis on the effect of the SWOT analysis on the Great Gourmet Co.
as restaurant a SWOT analysis will show an insight into where the competition is strong and
where it can do better

Strengths

Skilled human resource, display of menus and an awesome reception is one of strengths of a
restaurant business. The company should ask itself a question, why should people come and
dine at our restaurant rather than other restaurants (competitors) within our market? Offering
of authentic nice tasty meals or the capability of keeping customers entertained gets to act as
a big strength in this business.

Weaknesses

Under this section, the business has to identify which area it struggles in contrast to other
restaurant. The restaurant can take advantage in the advancement in technology (use of social
media) to get feedback from customers and analyse on how best it can improve on its
weaknesses.

Opportunities

Opportunities is all about what the restaurant can do in order to improve on its branding,
broaden its market and develop on its operations. The restaurant can use some marketing
strategy incorporating it with the opportunities it might discover and improve on it to make it
its strength.

Threats

Threats are defined as external factors which are beyond the control of other restaurant
providing the same services and products as ………… threats get to disrupt the running of
the business, only if companies get to find creative ways of addressing them can them get to
overcome them. Analysis of the prices of the same products in other restaurant around the
market area get to minimise threats.

TASK THREE A

Michael Porter’s theory of competitive advantage analyses competiveness together with its
repercussions. The theory focuses on distinct industries or groups of industries in which the
ideologies of competitive advantage is encompassed. Most businesses get to have strategic
problems in finding a way to achieve maintainable competitive advantage over the products
of other companies which are producing similar products. Porter highlighted four major
factors (generics) to attain competitive advantage, Grundy, T. (2006).

Cost Leadership

This strategy of competitive advantage looks at becoming the lowest cost producer in the
market. In theory the lowest cost producer gets to appreciate the best profits if the selling
price gets to at least equal the average for the market. Sometimes a low cost leader can be
able to discount its products to maximise sales mostly if it happens to have a substantial cost
advantage over other organizations (restaurant) which can further lead to an increase in
market share. A strategy of cost leadership call for close collaboration between all the
functional areas of a company.

Cost Focus
Under cost focus, a business pursues a lower cost advantage in just small number of market
segments. The product will be simple possibly an alike product to the higher priced and
featured market leader, but acceptable to sufficient consumers.

Differentiation Focus

Under this, a business targets to differentiate within just one or a small number of target
market segments. The essential concern for a business implementing this strategy is to
guarantee that consumers really do have different needs and wants. Several small businesses
are able to establish themselves in a niche market segment using this strategy, attaining
higher prices than undifferentiated products through specialist expertise or other ways to add
value for customers.

Differentiation Leadership

Under differentiation leadership, business targets larger markets and its goal is to attain
competitive advantage through differentiation across the industry. The strategy includes
choosing one or more benchmarks used by buyers in a market and then placing the business
uniquely to meet those benchmarks. Differentiation is about charging a premium price that
more than covers the additional production costs, and about giving customers clear reasons to
prefer the product over other, less differentiated products.

TASK THREE B

Over the years Samsung has grown to one of the biggest electronics companies. Since 1970’s
and early 1980’s Samsung expanded globally with diversified aim into core technical
business. Samsung leads the electronic industry with its high performance and with high
growth rate along with stability.

The business environment keeps on changing and is unpredictable. So, it is very necessary to
understand and react to this changing business so as to survive and grow in the market.
Proper knowledge of business environment will make the entrepreneurs and businesses able
enough to plan and implement strategies that are needed to identify the scope of
improvement, create and exploit opportunities that come on the way, retain stability, gain
competitive advantage and prepare appropriately for the upcoming challenges. The way the
environment is analysed and accordingly the strategies implemented, will define the track of
the business. Here With the example of Samsung.
SWOT analysis, is a strategic business planning tool used to determine the Strengths,
Weaknesses, Opportunities, and Threats that exists in business. It includes identifying the
business objectives as well as the internal and external factors which are likely to favour the
business. It may be classified into internal factors and External factors. The internal factors
can be classified into strengths and weaknesses depending upon their effect on organization
and business objectives. The external factors may include macro-economic factors like
technological, legal, and socio-cultural changes, as well as changes in the marketplace or
competitive position.’

Strengths: It usually tells about the positives of the company. How well we are doing in our
area of interest. What is our position in front of competitor? Samsung enjoys the following
strengths: strong in holding Consumer Electronics, Low margin strategy increases sales,
highly skilled labour availability, Good focus on customer service and good marketing
strategy and Strong management and loyal employees.

Weaknesses: Weakness refers to area of struggle of our company. Why are consumers not
happy about particular product? Why are we not meeting sales target for a particular product.
Lack of performance in Laser printer sales, less cost effective in PC consumable products,
Lack of brand recognition in mobile phone sector and Poor pricing strategy are some of
Samsung weaknesses

Opportunities: It is directly related to external environment. It could be the areas where your
competitor is not good at. We should try to utilize strengths in areas of our weaknesses. Are
there any emerging trends or possibility to capture market by introducing new product?
Samsung can get to utilize the following opportunities: Increase product range in consumer
electronics, Can sustain future market using the idea of consumer taste research, Rapid
growth in competitive markets across the globe and Increase in portfolio due to acquisitions
of other firms

Threats: It could be financial or development problem. Competitor’s strength is major threat.

Are competitor’s becoming strong. Daily entrants of new technology companies, Impact on
sales due to recession, Lack of innovation in mobile industry threatens its position further
down and Intense competition from existing companies in PC sector are some of the threats
facing Samsung electronics.

TASK FOUR A
The changes in global activities in terms of politics, economic, business, communication,
transport and technology has pushed the need for business to change their strategies on how
they do business. These changes has led to businesses going international. International
business is the doing of business across the national borders. Companies that are active in
cross border businesses are called multinational enterprise. Multinational companies are
usually based in one country but get to have business activities in several countries.
Globalization usually refer to the growing economic integration and interdependence of
countries globally. Globalization lead to fast distribution and diffusion of products,
technology and knowledge globally. The process of globalization is a natural process that is a
result of the growing and accelerated process of generalizing of the character and process of
production.

There are several specific factors that promote globalization and guide enterprises to strive
for business development and growth through the international and global operations and
include: political changes, development of technology, international business climate, market
development, expenses and competition (Ball, McCulloch, Geringer, Minor, & McNett,
2001).

Opportunities for global growth for a company is endless and the there is an attractive
potential for exponential growth. How to attain such success requires a well-planned strategy
attached to specific corporate goals. Globalisation requires being attentive to cultural issues
as they hold a thin line between success and failure of an organisation. Irrespective of the size
or structure, companies that take an active, strategic approach to evaluating and
understanding both risks and costs will stay one step ahead of the competition and realise the
benefits of a successful globalization initiative.

The following are some of the way Trade kings was able to penetrate through the global
market.

Start with Strategy, Not Tactics

A decision of going global by a company should be met with coming up with a long term
plan that aligns it with the companies vision, mission and activities influencing the
company’s strengths as it is identifying some opportunities in desirable and compatible
markets. Starting with strategy and not tactics is what Trade kings has used in order to
penetrate through the international markets. Before making any move, it is important to
thorough examine the foreign market and get the expertise essential to understanding the
culture and people of that country or market. Different countries have diverse markets that
offer distinctive opportunities that have to be understood by a company before embarking on
operating in the same market.

Understanding the Culture

Before Setting out to conquer international markets with a promising growth potential, trade
kings engages a research on the cultural setup of that market. A lot of things can get to be
reason as to why a company has to filed to grow on international market but lack of cultural
understanding of the market can prove to be costly for the business

Identifying the Competitive Edge

Before getting into market, be it local or international a company has to be aware of its
competitors. And in order for companies to survive in an international market it has to hold a
competitive advantage over local firms. By definition competitive advantage is the manner in
which a company distinguishes itself from other companies in order to gain a market share
and establish customer base. A competitive advantage is achieved when a business markets a
product or service in a manner that allows it to truly connect with customers and outperform
its competitors. Without a competitive advantage, businesses struggle to gain traction, and
they often resort to selling their products or services based solely on price. This approach
ultimately leads to slashing costs and other non-value-added measures. Trade has had a good
time over the years enjoying massive competitive advantage over its competitors locally and
the ability for its products to easily penetrate though the markets has made it possible for it to

attain growth in international markets.

TASK FOUR B

Globalisation is just merely a notion that there will be no national borders in the world of
conducting business and commerce and all trade will operate on an international scale. Since
time in memorial people have had benefits from the geographical locations of one another
through migration, business relations and trade. Equally, today the same occurrence continues
on a big scale through the introduction of free trade agreements and new developments in the
international relations enabling the countries to benefit from each other’s interest. The
practice of inter country integration is what is known as globalisation, Cullen (2010).

Globalisation is of importance and provides many benefits to countries and business

involved. Not everything gets to be in abundance everywhere, globalisation gets to bring
resources that are in abundance at one point to a place that those resources are scarce.
Globalisation also gets to expose companies to cheap labour opportunities overseas giving
examples to companies like Japanese automobile company that manufactures its automobile
parts in Pakistan and gets to assemble them from Bangladesh, selling the finished product
(car) to other countries.

Concepts of globalisation can be highlighted under three channels of trade in goods and
services, movement of capital and flow of finance. The loss and gains of globalisation can be
examined using the channels highlighted. International trade results into allocation of
resources that is constant with comparative advantage, this gives birth to specialisation which
further improves productivity. International trade in general is favourable as in most cases
restrictive trade practices hinder growth. Emerging economies will only enjoy the benefits of
international trade only if they reach the full potential of their resource availability. That is
why international trade agreements make exceptions by allowing longer time to developing
economies in terms of reduction in tariff and non-tariff barriers.

Capital flows across countries have played an important role in enhancing the production
base. Capital mobility enables the total savings of the world to be distributed among countries
which have the highest investment potential. Under these circumstances, one country's
growth is not constrained by its own domestic savings. The inflow of foreign capital has
played a significant role in the recent period in the economic development of the developing
countries.

The fast development of the capital market has been one of the important features of the
current process of globalisation. The expansion in foreign exchange markets and capital
markets is a necessary pre-requisite for international transfer of capital. However, the
volatility in the foreign exchange market and the ease with which funds can be withdrawn
from countries have often times created panic situations. While there is, no doubt, that
countries benefit by capital flows, the need to keep a watchful eye on foreign exchange
markets becomes essential. What applies to trade may not necessarily apply to finance in a
full measure.

REFERENCES

Ansoff, H. I. 1984. Implementing Strategic Management. Prentice-Hall International,

Englewood Cliffs, NJ.

Bartels, L. F., Buckley P., Mariano G. (2009). Multinational Enterprises’ Foreign Direct
Investment Location Decisions within the Global Factory. UNIDO, Vienna.

Burke, A., van Stel, A., and Thurik, R. (2010). Blue ocean vs. five forces. Harvard Business
Review, 88(5), 28-29.

Cavusgil, T., Knight, G., Riesenberger, J. (2008). International Business: Strategy,

Management and the New Realities. Prentice Hall.

Coombes R. (2004). McDonalds profit drop. BMJ. British Medical Journal

Cullen, B. J., Parboteeah, K. P. (2010). International Business, Strategy and the

Multinational Company. Taylor & Francis.

Daniels, D.J., Radebaugh, H.L., Sullivan, P.D. (2007). International Business: environment
and operations. Prentice Hall

David, F. (1993). Strategic Management, 4th Ed. New York, NY: Macmillan Publishing
Company. 

Dess, G., Lumpkin, G.T., Taylor, M. (2004). Strategic Management: Creating Competitive
Advantages.
Dobbs, M. (2014). Guidelines for applying Porter’s five forces framework: A set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.

Gillespie A. (2007). PESTEL analysis of macro-environment. Foundation for economics.

Oxford university press.

Grundy, T. (2006). Rethinking and reinventing Michael Porter’s five forces model. Strategic
Change, 15(5), 213-229.

Hill, W. L. C. (2008). Global business today. McGraw-Hill Irwin.

Jones, B. (1990). Neighborhood Planning: A Guide for Citizens and Planners. Chicago and
Washington, DC: Planners Press, American Planning Association.

Joshi, M. R. (2009). International Business. Oxford University Press.

Porter, Michael E., "Competitive Advantage". The Free Press. New York.