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The PEST analysis is a useful tool for understanding market growth or

decline, and as such the position, potential and direction for a


business. A PEST analysis is a business measurement tool. PEST is an
acronym for Political, Economic, Social and Technological factors,
which are used to assess the market for a business or organizational
unit.

McDonald's Corporation (NYSE: MCD) is the world's largest chain of fast food
restaurants, serving nearly 47 million customers daily.[3] McDonald's primarily
sells hamburgers, cheeseburgers, chicken products, French fries, breakfast items,
soft drinks, milkshakes and desserts. More recently, it has begun to offer salads,
wraps and fruit. Many McDonald's restaurants have included a playground for
children and advertising geared toward children, and some have been redesigned in
a more 'natural' style, with a particular emphasis on comfort: introducing lounge
areas and fireplaces, and eliminating hard plastic chairs and tables.
In addition to its signature restaurant chain, McDonald�s Corporation holds
minority interest in Pret A Manger (a UK-based sandwich retailer), and owned the
Chipotle Mexican Grill until 2006 and the restaurant chain Boston Market until
2007.[4] The company has also expanded the McDonald's menu in recent decades to
include alternative meal options like salads and snack wraps in order to
capitalize on growing consumer interest in health and wellness, and to avoid the
"veto vote" where one member of a group might refuse to go because there are not
enough healthy options on the menu.

The business began in 1940, with a restaurant opened by siblings Dick and Mac
McDonald in San Bernardino, California. Their introduction of the "Speedee Service
System" in 1948 established the principles of the modern fast-food restaurant. The
original mascot of McDonald's was a man with a chef's hat on top of a hamburger
shaped head whose name was "Speedee." Speedee was eventually replaced with Ronald
McDonald in 1968.
Type Public (NYSE: MCD)
Founded May 15, 1940 in San Bernardino, California
McDonald's Corporation, 1955 in Des Plaines, Illinois
Founder Dick and Mac McDonald McDonald's restaurant concept
Ray Kroc, McDonald's Corporation founder.
Headquarters Oak Brook, Illinois, USA
No. of locations 31,000+ worldwide[1]
Key people Andrew J. McKenna Sr., Chairman
Jim Skinner, Vice Chairman & CEO
Ralph Alvarez, president & COO
Marlena Peleo-Lazar, chief creative officer
Industry Restaurants
Products Fast Food
(hamburgers � chicken � french fries � soft drinks � milkshakes � salads �
desserts � breakfast)
Revenue ? $22.79 billion USD (2008)[2]
Operating income ? $14.445 billion USD (2006)[2]
Net income ? $3.544 billion USD (2006)[2]
Employees 465,000 (2005)[2]
Website www.mcdonalds.com

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With the expansion of McDonald's into many international markets, the company has
become a symbol of globalization and the spread of the American way of life. Its
prominence has also made it a frequent topic of public debates about obesity,
corporate ethics and consumer responsibility.

As a prominent example of the rapid globalization of American fast food industry,


McDonald's is often the target of criticism for its menu, its expansion, and its
business practices. For example, in 1990, two British activists, David Morris and
Helen Steel, distributed leaflets entitled What's wrong with McDonald's? on the
streets of London. McDonald's wrote to Steel and Morris demanding they desist and
apologize, and, when they refused, sued them for libel in a case known
colloquially as the McLibel case.

In 2001, Eric Schlosser's book Fast Food Nation included criticism of McDonald's'
business practices. Among the critiques were allegations that McDonald's (along
with other companies within the fast-food industry) uses its political influence
to increase their own profits at the expense of people's health and the social
conditions of its workers. The book also brought into question McDonald's
advertisement techniques in which it targets children. While the book did mention
other fast-food chains, it focused primarily on McDonald's.

In 2002, vegetarian groups, largely Hindu, successfully sued McDonald's for


misrepresenting their French fries as vegetarian.[16]

Morgan Spurlock's 2004 documentary film Super Size Me said that McDonald's food
was contributing to the epidemic of obesity in society, and that the company was
failing to provide nutritional information about its food for its customers. Six
weeks after the film premiered, McDonald's announced that was eliminating the
super size option, and was creating the adult happy meal.

Anthony Bourdain on his show, No Reservations, has criticized McDonald's among


other fast-food restaurants for its culinary blandness.

In 1999 Jos� Bov� vandalized a McDonald's in France to protest against the


introduction of fast food in the region.[17]

enviromental factors
The soya that is fed to McDonald�s chickens is supplied by agricultural giant
Cargill and comes directly from Brazil. Greenpeace alleges that not only is soya
destroying the Amazon rain forest in Brazil, but soya farmers are guilty of
further crimes including slavery and the invasion of indigenous peoples� lands.
The accusation is that McDonald's, as a client of Cargill's, is complicit in these
alleged activities.
It has also filed numerous defamation suits. The McLibel case is probably the best
known of these. McDonald's sued two Greenpeace activists for distributing
pamphlets attacking its environmental, labor and health records. After the longest
trial in UK legal history, McDonald's won a technical victory for showing that
some allegations were untrue. But it was a massive public relations disaster since
the judge also found that more than half of what was on the pamphlet was truthful,
or were simply the opinions of the activists and therefore non-prosecutable.
s a prominent example of the rapid globalization of American fast food industry,
McDonald's is often the target of criticism for its menu, its expansion, and its
business practices. For example, in 1990, two British activists, David Morris and
Helen Steel, distributed leaflets entitled What's wrong with McDonald's? on the
streets of London. McDonald's wrote to Steel and Morris demanding they desist and
apologize, and, when they refused, sued them for libel in a case known
colloquially as the McLibel case.
When McDonald�s received criticism for its environmental policies in the 1970s, it
began to make substantial progress towards source reductions efforts.[28] For
instance, an �average meal� in the 1970s�a Big Mac, fries, and a drink�required 46
grams of packaging; today, it requires only 25 grams, allowing a 46 percent
reduction.[29] In addition, McDonald�s eliminated the need for intermediate
containers for cola by having a delivery system that pumps syrup directly from the
delivery truck into storage containers, saving two million pounds of packaging
annually.[30] Overall, weight reductions in packaging and products, as well as the
increased usage of bulk packaging ultimately decreased packaging by 24 million
pounds annually.[31]

defamination cases

McDonalds is facing problems from all areas of the PEST analysis. The company is
suffering from political threats from wars between countries where the company
operates, as well as from governments now adding legislation to force them to put
health warnings on their products. They have also become a symbol of capitalism
and Americanism � meaning that they have now become the target of terrorist groups
and attacks.
McDonalds has no control over these political factors which are making the company
suffer greatly. They can only leave war stricken countries, or places where
terrorism is a threat. This means a loss in revenue, as well as the company
becoming smaller and therefore weaker.
McDonalds are experiencing economical problems lately too. They have found a
recent slump in sales from its fastfood business, suggesting customers want more
freedom of choice, something which they may not get at McDonalds. To combat this
McDonalds have bought out other companies, such as Pret � Manger. By diversifying
the company they aim to increase sales again by offering the customer more
variety, as this seems to be what consumers are demanding.