ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment

Submission date October, 21th2020 Date Received 1st submission

Re-submission Date Date Received 2nd submission

Student Name Le Ngoc Mai Anh Student ID GBH190802

Class GBH0907 Assessor name Do Thu Trang

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that
making a false declaration is a form of malpractice.

Student’s signature Mai Anh

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Table of Contents
1. Introduction .......................................................................................................................................................... 4
2. Micro and Macro environment............................................................................................................................. 4
2.1. Competitive environment: ............................................................................................................................ 5
Potential competitor:............................................................................................................................................ 5
Current competitors: ............................................................................................................................................ 6
Substitute products: ............................................................................................................................................. 7
Power of suppliers: ............................................................................................................................................... 8
Power of buyers: ................................................................................................................................................... 8
2.2. PESTLE ANALYSIS:.......................................................................................................................................... 9
2.2.1. Social factor: ......................................................................................................................................... 9
2.2.2. Technology factor: .............................................................................................................................. 10
3. Internal analysis .................................................................................................................................................. 12
3.1. Mission, Vision and Core Value............................................................................................................... 12
3.2. Brand name and brand equity ................................................................................................................ 13
3.3. Organizational structure .............................................................................................................................. 14
3.4. Financial strengths ....................................................................................................................................... 15
3.5. Technology based and R&D investment ...................................................................................................... 16
4. Business decision ................................................................................................................................................ 16
4.4. SWOT ............................................................................................................................................................... 20
5. Conclusion ............................................................................................................................................................... 20
References .................................................................................................................................................................. 20
1. Introduction

I am working as a business analyst in Wells Fargo, an American multinational financial services company.
It is the world's fourth-largest bank by market capitalization and the fourth largest bank in the US by
total assets. The business organization I choose is a multinational MC Donald's. The company has a very
diverse internal and external environment. For this project, my company learns about the company's
internal and external environmental analysis, I accept that this company includes a chance of getting to
be a productive speculation.

2. Micro and Macro environment

The competitive environment has five forces that impact on the Mc Donald's activities.
2.1. Competitive environment:
No Name Price/ Characteristic Competitive advantage
product product
1 Mc $3.99 - Original
Donald’s: hamburger taste
Big Mac - Suitable for all
ages
- Replace breakfast
and meal plan
- Famous in many
countries
- Reasonable price - The company's
- Delicious products included beef patties, famous markets
special sauce, iceberg lettuce, American are America,
cheese, pickles, and onions. Europe, Asia
- Eye-catching colors
- It was presented within the More
prominent Pittsburgh range in 1967 and
across the country in 1968. It is one of
the company's lead items.

2 Burger King: $4.19 - The company is

Whopper the 2nd most
popular
hamburger brand
- The company is
not widely known
in many Asian
chain stores

- a flame-grilled 4 oz (110 g) beef patty,

sesame seed bun, mayonnaise, lettuce,
tomato, pickles, ketchup, and sliced
onion
- The price is more expensive
- Colorful

Potential competitor:
Potential competitor of Mc Donald’s is Burger King. The two products the company is competing with
are Hamburger. The Big Mac is McDonald's best-selling hamburger of all time. With Burger King is
Whopper. Kind of market structure of Burger King is perfect competition. Two companies all have a
hamburger pattern that many customers often confuse, sometimes they think 2 products are 1, so this
reason the burger king always confronts Mc Donald's.

The reason why Mc Donald’s products can be replaced by Burger King products is in recent years, Burger
King has always had many campaigns to "troll" Mc Donald's. They turned 14,000 McDonald's stores into
discount stores. They arrange that in case the client arrange the cheeseburger Whoppers at the
McDonald's, the cost of each cake is as it were 0.01 USD. With the participation of innovation, turning
clients into "assistants", actuating accounts and not a small squandered made a difference commerce in
Q4 2018 and emphasized the 0.8% development that came from the Whopper program $ 0.01. Not as it
were that, Burger King's showcasing technique has been eagerly reacted to by youthful individuals,
about 6 million applications downloaded in fair 3 months, more compelling than any past paid promoting
program (Le, 2018). Burger king has always been a rival "heavy weight" of Mc Donald's over the years. So
Mc Donald's should be quick to suggest strategies to defeat the opponent, especially discounts and
customer service.

Current competitors:
Now KFC is competitor of Mc Donald’s. In each nation the require for quick nourishment is continuously
a need. Quick nourishment brands are moreover competing for the advertise in terms of cost, quality
and client benefit ... First, about price, at Mc Donald's the most expensive product at $ 6.79 is Double
Filet-O-Fish – Meal (MCD, 2020), at KFC the most expensive product at $12.99 is Chicken Tenders (KFC,
2020). So KFC's food is more expensive than Mc Donald's food. Mc Donald's food is both cheap and
quality. “At McDonald’s, we’re proud to say we keep you at the Centre of all our decisions” (MCD, 2020).
They always made it our mission to be the McDonald’s you need. Customer Care Service of the two
companies is always equal.

Substitute products:
During the integration period, Korea is developing strongly in all areas of entertainment and culinary
industries in all regions. Lotteria is an alternative competitor for Mc Donald's products. Lotteria is the
biggest quick nourishment chain in Korea, serving burgers, french fries and browned chicken. Lotteria's
products are becoming more and more popular, gradually replacing Mc Donald's because all Lotteria
products taste the same and are cheaper than Mc Donald's. According to customer feedback the burger
did pick up a slight edge with a punch of flavoring that created a more flavorful patty than the
commonplace McDonald's burger (Taylor, 2020). Lotteria's dishes are slowly taking away the popularity
and fast food brand of Mc Donald's, especially the basics like burgers, chips and fried chicken.

No Product of Lotteria Product of Mc Donald’s

1

- Average price is $2 - Average price is $3.99

- Average price is $1,7 - Average price is $1,3

3

- Average price is $4 - Average price is $ 5

Power of suppliers:
The company depends heavily on this factor. Sellers impact McDonald's on a company's generation
capacity based on accessibility of crude materials. This component of the Five Powers examination show
appears the affect providers have on quick nourishment eatery companies and the environment. Within
the case of McDonald's, the powerless bartering control of providers was based on the taking after
outside components. The huge number of providers undermines the impact of person providers on the
McDonald Gather. This shortcoming is somewhat due to the need of solid worldwide and territorial
collusions between providers. In terms of connections, most McDonald's sellers don't coordinate
vertically. This implies they have no control over the dissemination arrange that ships their items to
companies like McDonald's. In Porter's Five Strengths examination show, such moo vertical integration
undermines the bartering control of providers. In expansion, the relative plenitude of fixings such as
flour and meat decreases the impact of person providers on the company (Gregory, 2018).

Power of buyers:
This is Strong Force. The company strongly depend on this factor. The number of store-bought
customers is always large, so there is no measurement. McDonald’s must addresses the control of clients
on commerce execution. This component of the Five Strengths examination bargains with the impact
and requests of customers, and how their choices affect businesses. In McDonald’s case, the taking after
are the outside components that contribute to the solid bartering control of buyers: Moo exchanging
costs, Large number of suppliers, High accessibility of substitutes. The ease of changing from one eatery
to another (moo exchanging costs) empowers shoppers to effortlessly force their requests on
McDonald’s. Within the Five Strengths investigation demonstrate, this outside calculate reinforces the
bartering control of clients. In connection, since of showcase immersion, shoppers can select from
numerous quick nourishment eateries other than McDonald’s. This condition makes the haggling control
of buyers a solid constrain in influencing the company’s outside environment. In addition, the
accessibility of substitutes is significant in this outside examination. In this case, the accessibility of
numerous substitutes includes to the bartering control of clients. For case, substitutes incorporate
nourishment stands and outlets, and artisanal pastry kitchens, as well as microwave dinners and
nourishments that one might cook at domestic (Gregory, 2018).

2.2. PESTLE ANALYSIS:

2.2.1. Social factor:
The significance of social components is critical to be considered to examine the execution of any
commerce. There are so numerous social components just like the social patterns, way of life changes
and numerous other components which have a coordinate effect on a brand’s execution. Especially,
changing tastes of the shoppers and way of life changes can drive deals up or moo. Clients are
developing progressively wellbeing cognizant. It requires brands like McDonalds to have a menu that
suits their inclinations (Pratap, 2016 ). For example, in Vietnam, the most frequent age group for fast
food is the children, the young and rarely their family. Reasons for them to come to the store such as
organizing events, dating, children's hobbies. The first time McDonald's came to Vietnam in 2014,
McDonald's was warmly welcomed. Locals wait in long lines to whet their taste buds with a new kind of
burgers. A whopping 400,000 customers happily spent money on this new sensation within the first
month. But after a while, Mc Donald's confronted with Vietnamese "fast food" that it was pho and
bread. Many Vietnamese people find that the menu of MC Donald's is not suitable. This is the difficulty
of the company when entering the Vietnamese market (Saini, 2019). Same traditionally, for Vietnamese
they cannot eat too many fatty foods. Since the store's food comes from abroad which their food is
always low in fat because it is a required ingredient for processing and they use knives and paten to eat.
That is too difficult for Vietnamese people. Right presently, the McDonalds Menu is so complex and
made up of oily formulas that its franchisors have gotten to be baffled. They don't need calorie
overwhelming burgers or colas. Wellbeing may be an exceptionally imperative calculate that any
nourishment brand must consider. Over the past decade, due to expanding weight around the world, the
center of society has been on low-calorie diets. In expansion, McDonalds ought to target the proper
sections in society. Its target advertise is primarily youthful individuals from the center course.
McDonald's has to shake off its undesirable picture in arrange to move forward with the burgeoning
nourishment drift. It won't be simple. But it's essential in case they need to outlive among other fast-
food companies who are reshaping menus for their clients. Recently, communication factors have also
influenced strongly society and especially customers. They already know how to look at the feedback of
old store customers to come. The company also promotes new products such as Mc Cafe Vanilla Chai
Frappuccino to attract more middle-aged customers for the company to diversify its customer base.

(Vietnam Investment Review)

2.2.2. Technology factor:

Technology can give a gigantic separating calculate for McDonald’s victory. McDonald’s is dynamic on
social media. They utilize Facebook and Instagram advertisements to catch their customers’
consideration with their unused or returning offerings, like their summer hit, the Mc Cafe Vanilla Chai
Frappuccino to make a faithful taking after that will turn into more clients (Frue, 2018). The innovation
they utilize is basic to moving forward representative efficiency, team-based communication and
nourishment generation as rapidly as clients anticipate. Numerous McDonald's presently have an unused
set of paint, chairs and tables to coordinate their favorite level screen menu shows. They too offer free
Wi-Fi to empower more clients to arrange and remain. Information science can be utilized to gage a
customer’s advertise behavior and patterns to customize their menu in like manner. Propels in
nourishment innovation ought to be utilized to make strides item advertising and pull in clients who may
feel removed by the 'snack' tag joined to McDonald's nourishment (Farooq, 2019). Mc Donald's always
puts customers first, so they are always ready to invest in their brands that bring many advantages.
Therefore, the company's investment in technology has helped the company attract more customers. In
fact, rather than clients having to connected with representatives as some time recently to arrange
things, EOTF stores will be prepared with distributing stands. With these stands, shoppers can totally
make and arrange concurring to their individual inclinations, not being bound to conventional dishes as
some time recently. This inventive demonstrate has gotten positive input from clients, particularly for
families with youthful children when requesting has ended up more comfortable and less unpleasant.
Besides, requesting at the stand goes hand in hand with table benefit. Subsequently, clients can select a
table and hold up until the nourishment is conveyed straightforwardly. Realizing the positive breeze that
the EOTF demonstrate brings, McDonald's has propelled a striking arrange to spend up to 6 billion
dollars within the third quarter of 2018, to modify the majority of eateries within the US by the
conclusion of 2022. In 2019, the number of eateries really effectively actualizing the EOTF is evaluated to
reach 8000+, contributing 4.8% to McDonald's income increment within the coordinate offering portion
(Resources, 2019).

(ClipDealer)
External factors and patterns sketched out in this PESTEL examination point to different dangers related
with McDonald's. One proposal to address the combined risk from government rules for slim down and
wellbeing and burgeoning open wellbeing approaches is to ceaselessly progress the company's menu.
The extreme objective is to create each thing on McDonald's menu solid. This suggestion too addresses
the dangers related with solid way of life patterns and the dangers related with working environment
and school wellbeing controls. With respect to the danger of social differing qualities, McDonald's ought
to make strides the adaptability of its universal operations to guarantee that menu things coordinate the
inclinations of the target customer. In expansion, the company can assist expand its supply chain to
address the danger of changing climatic conditions in certain locales.

In spite of dangers, the company still has room to develop. There are numerous commerce development
openings recorded in this McDonald's Corporation's PESTEL examination. Suggest the company to extend
showcase infiltration within the markets with tall development rates. For illustration, the increment in
McDonald's eatery areas in creating nations with tall development rates in Asia might contribute to
generally development. This suggestion also addresses the developing expendable salary development
opportunity in several markets around the world. To address the openings related with environmental
patterns, McDonald's ought to extend corporate social obligation programs. Key objectives ought to
incorporate progressing the natural effect of your trade, whereas fortifying your brand and buyer
recognition of your trade.

3. Internal analysis
3.1. Mission, Vision and Core Value
Strength: Similar to other multi-national companies, Coca-Cola aims to maximize their profits while
maintaining long-term sustainable growth within the fast food industry. Other than, the company itself is
more included in promoting exercises such as print and TV publicizing, retail store shows as well as
challenges and bundle plans. The company endeavors to supply a predominant benefit encounter to its
clients all over the world. It moreover points to develop its commerce productively whereas contributing
to community development. Mc Donald's mission is always response; the company is always at the top
of the list of customers' favorite dining places. Now they have noticed and reduced the amount of fat in
the food to serve the customer's request.
Weakness: Vision of company not strong enough to more developed. Mc Donald's is pretty much in
debt; they haven't done their vision well yet. Many customer feedbacks say how to serve them is not
good about food hygiene in some small stores.

3.2. Brand name and brand equity

Strength: Mc Donald’s is a famous fast food brand known by all ages. The company is highest brand
value in fast food brands. In 2018, McDonald’s appreciates the benefit of being the foremost valuable
fast nourishment brand within the world with the brand esteem of $126.04 billion. No other brand,
within the quick nourishment category, was indeed near to McDonald’s worth as Starbucks, which was
the moment most esteemed brand had a worth of fair $44.5 billion (MCD, 2019). McDonald’s is
additionally within the beat ten most important U.S. brands of 2020 based on company esteem, with its
brand esteem of 143.8 billion U.S. dollars putting it seventh on the list. The company detailed investing
over 440 million U.S. dollars on publicizing around the world in 2019 (statista, 2020). The brand is always
well-known and well-appreciated by the company.

(Albert Einstein Quotes)

 Source: Statista

Weakness: Larger part of McDonald’s incomes are from the U.S. and other Western economies so brand
still restricted in some developing countries so the company should synchronously expand the market.
The brand name is often confused with other fast food restaurants.

3.3. Organizational structure

Strength: McDonald’s organizational structure has the taking after characteristics, orchestrated
concurring to noteworthiness in influencing nourishment benefit commerce operations: Worldwide
hierarchy, Performance-based divisions, Function-based bunches. They can control the shop systems.
Empowering companies to actualize techniques based on similitudes in showcase execution and related
measurements.

Weakness: Restrain the adaptability of the commerce.

3.4. Financial strengths

(MCD, 2020)

Weakness: McDonald's has the Money related Quality Rank of 3. It shows destitute budgetary quality
and is likely in money related trouble. Ordinarily this can be caused by as well much obligation for the
company. McDonald's Corp shows destitute budgetary quality (MCD, 2020). The company still has too
much debt. According to the company's balance sheet for 2019 and 2018, Total Liabilities of 2019 is
$55.721,1 is much more than it was in 2018 is $39.069,6. Total Assets too, in 2019 increase $14. 699,6.
About Equity increase $-1,951,9. So the company should pay attention to its debts (MCD, 2020).
Although the company is always famous in many aspects, but with a large debt, the company should
balance and create strategies for financial development.
3.5. Technology based and R&D investment
Strength: McDonald's has too obtained two littler tech companies with the point of centering more on
digitizing stores and driving menus. The company increment conveyance benefit and grow menu. Within
the quarter finishing December 31, there was a 5.1% development in deals at the company's US eateries
open for more than 13 months, marginally higher than the 4 ,67% (MCD, 2020).

Weakness: It can cost money to invest.

4. Business decision
BUSINESS DECISION OF MC DONALD’S

McDonald's Became the Leader in The Fast Food Industry is the action plan that the company is always
looking for to succeed. McDonald's promoters are equipped towards children and families, and deliver
recognizable logos. First, McDonald's was marketed towards children and families. It is a smart strategy.
McDonald's is a market for families and children, and is touted as a fun place to go with family on
occasions like birthdays, dates or just the casual day. The children's marketing company job will very
quickly become famous. Secondly, McDonald's Created The Recognizable Icon Of The Golden Arches. The
company's logo is familiar to many ages, especially children. The company's logo is very meaningful.
Numerous individuals get it that the letter "M" speaks to the primary letter of the company title.
McDonald's side needs to grant its clients a different message. Sometime recently that, within the 1960s,
in an exertion to revamp its picture, the company invited Donald Cheskin - a plan expert to assist them
alter the symbol. Nearly instantly he convinced them to keep his symbol unique. Since concurring to him,
the letter "M" with the circle over makes a difference people think of a woman's breasts and makes
them feel hungry. This could seem incredible to numerous individuals, but without a doubt after
knowing this, you'll see that "M" in a totally diverse way. In addition, McDonald's created the
recognizable emblem of Ronald McDonald. In 1967, Ronald McDonald was presented by a establishment
store proprietor. Establishment proprietors have recognized the significance of promoting and utilizing
the symbol as a clown to lock in children. It is famous that in 1973, Ronald McDonald was more
recognizable with 96% of American children than their president's name. Ronald McDonald positioned
moment for the foremost recognizable anecdotal character after Santa Claus among American
Understudies.
Mc Donald's strategy focuses on marketing for Children. Within the chart underneath, you'll be able see
how McDonald's centers on promoting focusing on children between the ages of 2-5 and 6-11.
McDonald's is more than 3 times more than its competitors.
In addition to attracting children, they also attract parents. Children want to go to a McDonald's because
it is a fun place (playground, fun meal toys). A businessman eats at McDonald's because it's fast and can
be eaten on the go. Teenagers and adults or parents are attracted to the menu's valuable food as it is
more affordable and has free Wi-Fi. Through this corporate strategy, they have achieved these
successes. In terms of strengths, Through McDonald's Upbeat Supper Toys, it was famous that they were
"the biggest toy wholesaler within the world". From their center on child-directed promoting - counting
their toys, it leads to 20% of their deals. Allegedly, McDonald's disseminates 1.5 billion toys around the
world (higher than Hasbro and Mattel). There was a report made in 2009 to find their favorite quick
nourishment and why they like it. 37% of children say McDonald's is there to begin with choice - 87% of
6-7 and 80% of 8-9 a long time ancient say they "like to purchase toys at their dinners". In terms of
weaknesses, the company is too focused on the ages of children, but the store only produces high-fat
dishes, causing obesity in children (profitworks, 2020). Looking at the chart, it can be seen that
competitors Burger King and KFC are also powerful in marketing children but trivial. The company should
pay attention and try to have strategies to absorb children.

Social is the most influential factor in the company's strategy. The class that attracts Mc Donald's
products the most are children. French fries and burgers are the store's most favorites. but those are
nourishments that are tall in fat and tall in sugar. We are seeing an increment in low-carb and low-sugar
diets. Shockingly, McDonald's menus do not comply with these necessities, making them a less alluring
choice for health-conscious grown-ups. McDonald's has to shake off its undesirable picture to move
forward with the developing nourishment slant. It won't be simple. But that's essential on the off chance
that they need to outlive among other fast-food companies who are reshaping menus for their clients.

In addition, the competitive forces of the competitive environment also influence the decisions of the
company as well as the Mc Donald's product. Lotteria is a substitution competitor with very potential to
replace Mc Donald's in the market. Besides, Lotteria's products also has a similar flavor to Mc Donald's 's
products like burger, fries and chicken.

In today's market, Lotteria is the largest alternative competitor to Mc Donald's. Mc Donald's needs to
have better product strategies and better attract customers.
4.4. SWOT

5. Conclusion
Mc Donald's is a potentially successful and successful company in the United States. The internal and
external factors have made a difference the trade flourish, bringing an incredible brand within the eyes
of clients, a world-class refreshment company. The Mc Donald's is reasonable for future and future
venture and improvement.

References
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Available at: https://www.marketingtutor.net/pestle-analysis-of-mcdonalds/
[Accessed 20 October 2020].

Frue, 2018. PEST Analysis of McDonald’s: Which factors affect their future success. [Online]
Available at: https://pestleanalysis.com/pest-analysis-of-mcdonalds/
[Accessed 20 Octorber 2020].

Gregory, 2018. McDonald’s Five Forces Analysis (Porter’s Model) & Recommendations. [Online]
Available at: http://panmore.com/mcdonalds-five-forces-analysis-porters-model
[Accessed 20 October 2020].
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[Accessed 20 October 2020].

Le, 2018. Chiến dịch “troll” đối thủ của Burger King. [Online]
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diem-dat-mon-giam-gia-20190211111136017.chn
[Accessed 20 October 2020].

MCD, 2019. McDonald’s SWOT Analysis. [Online]

Available at: https://bstrategyhub.com/mcdonalds-swot-analysis/
[Accessed 20 October 2020].

MCD, 2020. ABOUT OUR FOOD. [Online]

Available at: https://www.mcdonalds.com.mt/quality/
[Accessed 20 October 2020].

MCD, 2020. McDonald's Balance Sheet 2005-2020. [Online]

Available at: https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/balance-sheet
[Accessed 20 October 2020].

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Available at:
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McDonald's%20Financial%20Strength&text=McDonald's%20has%20the%20Financial%20Strength,much%20debt%
20for%20the%20company
[Accessed 20 October 2020].

MCD, 2020. McDonald's Prices and Locations. [Online]

Available at: https://www.menuwithprice.com/menu/mcdonalds/
[Accessed 20 October 2020].

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[Accessed 21 October 2020].
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[Accessed 20 October 2020].

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Available at: https://medium.com/better-marketing/why-mcdonalds-failed-in-vietnam-35dc27edcaa
[Accessed 20 October 2020].

statista, 2020. McDonald's global brand value from 2006 to 202. [Online]
Available at: https://www.statista.com/statistics/326059/mcdonalds-brand-value/
[Accessed 20 October 2020].

Taylor, 2020. I compared McDonald's to the biggest fast-food chain in Korea, and the 'McDonald's of Korea' has
one major advantage. [Online]
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[Accessed 18 February 2020].