McDonald’s

Political factors:

It is important that governmental policies do not impact the fast food industry. Since few raw materials
are required to import for the industry, it is important that there are no trade impositions on imports.

For example, Pakistan being in FATF blacklist will directly impact the political factors as more scrutiny
will be required. This will result in hard policies being designed which will impact the import industries
as more paperwork will be required which will impact the fast food industry.

Economic Factors:

The cost of hiring labor is gradually increasing across the country and it impacts the food industry as
well. The profits are very less because most of the revenue stream is directed towards expenses, labor
cost being a major one.

Another important factor is of the taxation system. The government charges inhumane duties on
imported raw material which results in increasing marginal price which affects the food industry as a
whole. This will impact the prices that the company charges on its products.

Moreover, increasing inflation rates will also impact McDonald’s pricing factor. Pakistan’s inflation rate
is increasing every year and this impacts the overall pricing of raw materials imported which results in
higher per unit cost.

Social Factors:

McDonald’s has been facing numerous challenges when it comes to societal factors. One of the many
challenges includes increasing obesity rate which puts fast food industries in a bad position. Health
conscious individuals discourage increasing unhealthy consumerism and impact the behavior of those at
large to start eating healthy.

Moreover, different religions impact eating habits of its followers. For instance, in Islam, Muslims aren’t
allowed to eat pork. In Hinduism, a certain sect is not allowed to eat meat. This impacts McDonald’s
product portfolio and its positioning in the market.

Therefore, McDonald’s had to reposition and introduce a complete vegetarian menu for the Indian
consumers. For Muslim consumers, McDonald’s had to improvise and provide halal meat or chicken to
ensure that it is pure to eat.
 Threats Weight Rating
Weighted
Score
1 As the market is highly saturated, the 0.09 3 0.27
competition is very high, which results in a
diversified range of competitors and lowers
the market share.
2 The new entrants don’t face any barriers, this 0.07 2 0.14
raises the already high competition.
3 The social effect of moving towards healthier 0.05 3 0.15
substitutes, can have a negative effect on
McDonalds. (Even though, they have
introduced healthy products, they are the
face of increasing obesity).
4 McDonald’s might face some cultural threat, as 0.03 4 0.12
they have to adapt according to every
region, this might result in them losing their
standard, or the McDonald’s taste.
5 They continually face criticism, for procuring 0.02 1 0.02
their beef from private farms, which
are responsible for large scale
6 Switching cost is too low, in respect to
deforestation. 0.07 1 0.07
substitutes.
7 Some of the competitors offer the same 0.05 1 0.05
products for lower price, decreases their sales.
8 Due to the pandemic, the dine-ins were 0.02 2 0.04
closed, which decreased their sales.
9 Due to the rising inflation rates, their cost 0.08 2 0.16
increases, while their revenue decreases.
10 Duties imposed on the raw material 0.07 2 0.14
(imported), increases the cost of production.
 Opportunities Weight RatingWeighted
Score

1 Bigger expansion towards the beverage 0.09 2 0.18

industry. Coffee.
2 The company can produce new products, related 0.05 1 0.05
to healthy products. Rebuild their brand image
as healthy, offering products like sandwiches,
should be their priority.
3 Rebuild their image towards being more 0.01 3 0.03
customers centric.

4 Target the age group 20-39, as studies suggest 0.01 1 0.01

they are the largest age group that consumes
fast food.
5 Bring more innovation in the product line for kids. 0.05 3 0.15

6 Fast food industry, being the most 0.05 2 0.1

convenient option for the individuals with
busy lifestyles, increases the sales.
7 Can offer more discounts during special 0.05 2 0.1
occasions, for example, EID, Independence day,
Christmas.
9 Increase focus on sustainability. 0.05 1 0.05

10 Using the technological advancements, they 0.09 3 0.27

could greatly decrease their cost and the time
of production.
Total 1.00 2.1