ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 1: Business and Business Environment

Submission date 21 October 2020 DateReceived1stsubmission

Re-submissionDate DateReceived2ndsubmission

Student Name Ta Dai Trang Student ID GBH190163

Class GBH0904 Assessor name Doan Thi Thuy Trang

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 Table of Contents
1. INTRODUCTION .................................................................................................................................. 4
2. INTERNAL........................................................................................................................................... 4
2.1 BRAND NAME.......................................................................................................................................... 4
2.2 FINANCE.................................................................................................................................................. 5
2.3 HUMAN RESOURCE ................................................................................................................................. 5
2.4 VISION, MISSION (M 4.2) ......................................................................................................................... 6
2.5 ORGANIZATIONAL STRUCTURE (M 4.2) ...................................................................................................... 7
3. MACRO ENVIROMENT ........................................................................................................................ 8
3.1 Economic: ............................................................................................................................................... 8
3.2 Social: ....................................................................................................................................................11
3.3 Political (M3.) .........................................................................................................................................12
3.4 Technological (M3) .................................................................................................................................13
3.5 Enviromental (M3) .................................................................................................................................13
3.6 Legal (M3) ..............................................................................................................................................14
4 MICRO ENVIRONMENT ..................................................................................................................... 14
4.1 Current competitors ...............................................................................................................................14
4.2 Subsitute competitors ............................................................................................................................16
4.3 Potential competitors .............................................................................................................................18
4.4 Suppliers power .....................................................................................................................................18
4.5 Power of customers................................................................................................................................19
5 PROFESSIONS THAT BENEFIT FROM EVFTA: ...................................................................................... 19
6 EVALUATE DECISIONS OF THE BUSINESS: .......................................................................................... 20
6.1: ...................................................................................................................................................................20
6.2: ...................................................................................................................................................................22
6.3: ...................................................................................................................................................................22
6.4: ...................................................................................................................................................................22
7. D...................................................................................................................................................... 23
7.1 Choose one Macro factor (among 6 factors) + 2 different companies .......................................................23
7.2 Compare the impact of the Macro factor on these companies .................................................................25
7.3 The differences of impacts and explain the reasons .................................................................................26
8. CONCLUSION:................................................................................................................................... 27
9. REFERNECES ..................................................................................................................................... 28
 1. INTRODUCTION
As a business analyst for Wells Fargo, an American multinational financial services company and the world's
fourth-largest bank by market capitalization. It is also the fourth largest bank in the US by total assets. This
report will analyze the internal and external environments of the McDonald's.

2. INTERNAL

2.1 BRAND NAME

Strengths:
• McDonalds was born in 1940 and has built a strong brand through the promotion of efficiency and
quality fast food. Global brand value of about $ 97.7 billion according to Statisticstica.com (Jurevicius,
2020).

• As of 2018, McDonald's operates the second largest restaurant network in the world. In total, the
company and its entities operate 37,241 restaurants in 120 countries and attract millions of daily
consumers (Jurevicius, 2020).

(Jurevicius, 2020)

• According to Forbes and Interbrand, the McDonald's brand is the brand with the 9th and 12th value
in the world, worth 40.3 billion USD and 41.533 billion USD respectively. No other restaurant brand,
except Starbucks, is on the list of the 50 most valuable brands (Jurevicius, 2020).
 McDonald’s brand value 2000-2019
Interbrand, 2020

2.2 FINANCE
Weaknesses:
• Since more than half of McDonald's sales come from overseas, managing currency risk is important
to the business (Marketrealist, 2019).

• McDonald's often takes long-term loans and is affected by interest rate changes and foreign currency
fluctuations. Liabilities at the end of 2018 amount to 31.1 billion USD. The increase in debt in 2018
was mainly due to net issuances worth $ 2.0 billion. Standard & Poor's currently ranks McDonald's
long-term debt as BBB + and Moody's has a long-term debt rating of Baa1. Both agencies have a
steady outlook on ratings (Marketrealist, 2019).

• Debt maturing in 2019 is about $ 2.1 billion. In 2019, the company plans to issue long-term debt to
refinance this matured debt. At the end of 2018, the company also had a foreign currency loan of 254
million USD, mainly under uncommitted credit agreements. Neither of these amounts is physical
(Marketrealist, 2019).

2.3 HUMAN RESOURCE

Strengths:
• With the strong and continuous development in the world, human resources are also constantly
increasing in phosphorus quality. In 2018, McDonald’s has 235.000 employees (Jurevicius, 2020).

• When starting to work at McDonald, they will have to go through a very methodical and professional
training process. This process requires persistence and positive learning spirit of each employee.
 Along with that is the strict supervision of the manager to ensure the most effective training. More
importantly, McDonald's has always followed the common vision of 'Sincerely serving customers'
(McDonald's Vietnam, 2020).
Weaknesses:
• The eligibility criteria for employees not required exprienced, anybody with the right attitude and
commitment to providing the best in customer service is welcome to apply for a position with
McDonalds (McDonalds, 2020).
• There have been a number of labor strikes and protests against McDonald's because of its workforce
involving issues such as an increase in the hourly minimum wage and union rights. The latest example
is a strike of a McDonald's employee in London (Marketrealist, 2019).
• About 55,000 employees are trained at McDonald's each year. McDonald's spends about £ 10 million
on annual employee training to provide people with valuable skills (UK Essays, 2017)

2.4 VISION, MISSION (M 4.2)

a) The mission of the McDonald Group is to " To be our customer’s favourite place and way to eat
and drink”.
Strengths:
• This mission statement emphasizes the importance of the customer as the business focus, while
maintaining the company as a major influence on their food and beverage purchasing decisions.

• Based on this aspect, the company considers customer preference as the main determinant of its
business. To be such a popular place, for example, McDonald's develops its menus and recipes to
accommodate consumers' preference for fast food products such as burgers and French fries (Meyer,
2019).

• As a fast food service business, the company develops restaurant designs and layouts to optimize
customer productivity and experience. This factor, along with the menu development, has made the
company's franchised restaurants and venues a favorite (Meyer, 2019).

b) The McDonald's vision is “to move with velocity to drive profitable growth and become an even
better McDonald’s serving more customers delicious food each day around the world”. This
statement is part of the growth plan the company launched in 2017
Strengths:
 • The first and third elements of the McDonald's vision statement show that the business is moving
towards the goal of growth and expansion. This goal requires opening more locations and improving
operational efficiency to improve margins. General competitive strategy and intensive growth
strategy of McDonald's Growth and expansion target support is outlined in this corporate vision
statement (Meyer, 2019).

• The second component “Becoming McDonald's is even better” focuses on business improvement. The
reality is that McDonald's aims to implement comprehensive innovations in its business that
encompass many different aspects, such as product development, marketing, franchising and human
resource development force. This helps the company increase revenue (Meyer, 2019).

2.5 ORGANIZATIONAL STRUCTURE (M 4.2)

McDonald's organizational structure is a global regional structure.
Strengths:
• This is the structure where the primary responsibility rests with the regional administrator, each of
whom is responsible for a specific geographic area. This organizational structure gives department
administrators the autonomy to make quick decisions based on local tastes and rules, so the
company can better meet the needs of each country (Châu, 2018).

• In addition, the company also acquires valuable local experiences, thereby building a stronger
competitive advantage (Châu, 2018).

• With this structure, each department in the region is responsible for all functions in the region,
including marketing. The local Marketing Department recognizes the company's overall targets and
strategies and develops a Marketing Strategy in the general direction and suitable to the specific
situation of each locality (Châu, 2018).
 (Châu, 2018)

3. MACRO ENVIROMENT
The firm's macroeconomic environment includes factors outside the firm that have a wide and indirect
effect on all business activities. The PEST analysis is used to gain a deeper understanding of the macro
environment in the fast food industry where McDonald's operates. PEST is a useful strategic tool for
understanding market growth or decline, business position, potential and direction of action. Therefore, it
will be affected by many external factors (PESTEL) such as economic, social, political, technological,
environmental, legal.

3.1 Economic:
The economy has a great influence on businesses, from businesses that trade in raw materials to goods and
manufacturing. The fast food industry is certainly no exception. But the economy will suffer if the
unemployment rate rises. As the economy in 2020 suffers the crisis caused by Covid-19 has had a great
impact on the America economy. More specifically, the US Bureau of Labor Statistics data released on
September 4 (US time) shows that:
• Last August marked the fourth consecutive month the unemployment rate in the US dropped, it was
also the first time since March 2020 it dropped below 10% (Tuổi trẻ, 2020).

• In August, the US has 1.4 million more jobs, bring the unemployment rate down to only one digit
(8.4%) (Tuổi trẻ, 2020)
 • Before that, in July 10,2% of Americans were unemployed, equivalent to 13.6 million workers
without a job. According to Reuters, the drop was a bit unexpected for economists because it was
lower than their 9.8% prediction (Tuổi trẻ, 2020).

Rakesh Kochhar, 2020

The female unemployment rate in May (14.3%) was higher than the male unemployment rate (11.9%). This
contrasts with the Great Depression, when the unemployment rate among women peaked at 9.4% in July
2010 compared with a peak of 12.3% for men in January 2010 Rakesh (Kochhar, 2020)

Rakesh Kochhar, 2020

 The unemployment rate among young people aged 16 to 24 years (25.3%) outpaced the
unemployment rate among other workers by a significant margin in May, more than double the rate in the TB
group. age 35 and over. One major reason is the focus of young people on higher-risk industries, such as food
and beverage services, more affected by the need to stay away from society and government arrest. forced
to close (Rakesh Kochhar, 2020).

In general, personal use has reduce. Unemployment ratewill directly affect the McDonald's. Because many
people are unemployed, their demand will drop significantly because they don't want to waste money on fast
food and the frequency of using the product depends on their income level. Additionally, McDonald's
products are not a requirement for everyday use. Through the above indicators, we can be sure that
McDonald’s economy in America will decline significantly due to the COVID-19 epidemic. That is a huge threat
to McDonald’s. Furthermore, the consumer price index (CPI) in 2020 is volatile and American CPI increased
to 1% over the same period last year in July 2020 (Countryeconomy, 2020).

Countryeconomy, 2020
In the context of a severe drop in global sales due to the Covid-19 epidemic, American fast food giant
McDonald's could not avoid having to close a series of restaurants in the US, trying to cut spending and save
cash. According to the original plan, the famous fast food chain will close around 200 stores in the US this
year. About half of them are located on the campus of Walmart supermarkets. Previously, McDonald's cut US
marketing spending by 70% in the current quarter. Even so, the fast food chain will invest an additional $ 200
million in marketing in the US. According to Bloomberg, McDonald's second-quarter results globally marked
the worst decline since 2005 due to the impact of the Covid-19 epidemic. The increase in online order rates
cannot compensate for the damage caused by the temporary closures of many restaurants. Total sales
plunged 30% in the second quarter from the same period last year to $ 3.77 billion. Net income fell 68% to $
 483.8 million. Shares of McDonald's fell 2.1% to $ 196.94 at 2:31 pm on July 28 (New York time)
(Zingnews, 2020).

(M4.1) Concludes: Threats: McDonald's will have problems with fluctuations in business operations and net
profits because the Covid-19 ultimately affects investor relations. For example, the previous years operating
profits were $ 3,984 million (2005) $ 4,433 million (2006) and $ 3,879 million (2007). Net profits were $
2,602 million (2005), $ 3,544 million (2006) and $ 2,395 million (2007) (Rodrigo, 2012).

3.2 Social:
Based on an external factor of disposable income increasing, McDonald's has the opportunity to grow on
the growing trend of consumers buying fast food instead of cooking at home. This trend is also related to
the busy lifestyle in the 16-39 year old urban environment for both gender. These lifestyles increase the
likelihood of consumers coming to eat at restaurants like McDonald's instead of cooking at home. On the
other hand, the increasing cultural diversity is seen as a threat and an opportunity in the present context.

(Q&Me Vietnam Market Research, 2017)

(M4.1) Concludes: Opportunity: The growth of the consumer class population is primarily driving demand in
the service-oriented sector.
 3.3 Political (M3.)
This aspect of the PESTEL / PESTLE analysis deals with the impact of government policies and actions on the
macroscopic environment of McDonald's business and the economy as a whole. Government intervention
can determine the speed and path of a business. In McDonald's case, the most important external political
factors in the fast-food chain's environment are as follows:
o Increasing international trade agreements (opportunities)
o Government guidelines on diet and health (threats and opportunities)
o Developing public health policies (threats and opportunities)

McDonald's Group has an opportunity to expand its multinational business based on improved international
trade that could enhance global supply chains.

The affairs of any association are strongly influenced by state-by-state agreements authorized by all
governments. McDonald's is not an exemption. For example, there are certain groups in Europe and the
United States that oppose the state regarding the consumption of health-impacting fast food. They claim
that harmful factors like cholesterol and side effects such as obesity are caused by consuming fast food.
There are other factors such as tax laws, labor laws and related trade restrictions. Tax rates can affect an
organization's development (Rodrigo, 2012).

McDonald's is also affected by government tensions between countries. For example, the US relationship
with the UK has been strained since late 2018. And contact with Russia may be questioned. The US-China
trade war also troubled McDonald's, especially during the Covia-19 period. Although they have restaurants
all over the world, McDonald's is an American company. Complications between parties within government
can change existing commercial arrangements, creating a hostile environment for McDonald's operations
abroad (Frue, 2018).

(M4.1) Concludes: Threats: Fees can affect the development of the association. In a variety of workplace
career restrictions such as the work-hour requirement, require the association to employ more employees.
Changes like these increase the overall cost. Certain limitations greatly affect the operation of the
association. Certain limitations have a huge impact on the organization's operations.
 3.4 Technological (M3)
McDonald's primarily markets its items through TV commercials and newsletters. There are instances where
McDonald's only targets children in their advertising. This is evident in the advertisements on TV and in play
and toys, further demonstrating this fact. Another marketing technique that McDonald's uses is using big,
famous names to promote their products. Like McDonald's overall cherished fight backed by Like.

Furthermore, McDonald's has been producing self-service kiosks since 2015, and by 2020 most of its 14,000
locations will be fitted with kiosks that have touchscreen ordering for hundreds of McDonald's websites.
worldwide as part of a brand's digital transformation strategy. Claim your own way with the automatic
ordering app and enjoy your favorites quickly and conveniently without having to queue in front of the
cashier to wait for your order. However, a 2018 poll conducted by Business Insider partner MSN found that
diners are not big fans of kiosks: 78% of customers said they would be less inclined. heading to a restaurant
with an automatic order kiosk (Johnson, 2018).

(M4.1) Concludes: Threats: While the innovative changes made by McDonald's have a positive outlook,
investing in technology is still risky. The results of enhancing customer experience may not be as profitable
as expected (Bstrategyhub, 2019). Opposition from the parent group about attracting children by providing
toys, gifts to entice them to access the culture of unhealthy fast food from an early age (Rodrigo, 2012).

3.5 Enviromental (M3)

Today more than ever, people care about environmental protection. They are concerned with issues such as
air and water pollution, and the effects of waste packaging on the environment. A few years ago,
McDonald's was facing an outrage among environmentalists over the polystyrene packaging it is using for its
sandwiches. With more than 60 million people buying food from McDonald's every day, it's a massive
amount of packaging waste polystyrene that finds its way into landfills. McDonald's has responded to
criticism by phasing out polystyrene to replace paper-based packaging, which breaks down into organic
ingredients much faster in the environment.

(M4.1) Concludes: Threats: Like every other food giant, McDonald's faces tremendous pressure to improve
its operations to minimize polluting waste. Growing ecological concerns require McDonald's to take
initiatives in this regard and set an example for other grocery stores, but it's not so simple. In March 2018,
environmental activists asked McDonald's management to abandon the use of plastic straws at more than
37,000 restaurants worldwide due to the plastic pollution boom (Gupta, 2019).
 3.6 Legal (M3)
Regulation is always the biggest concern for a company. As a fast food company, McDonald's is subject to a
variety of legal requirements, such as employment and employment laws, corporate law and tax
requirements. Regulation is always the biggest concern for a company. As a fast food company, McDonald's
is subject to a variety of legal requirements, such as employment and employment laws, corporate law and
tax requirements. In some countries like the UK and the US, health and hygiene regulations are very strict,
and restaurants must obey them (Rahman, 2020).

(M4.1) Concludes: Threats: Legal threat include restaurant lawsuits against their advertising, meals, food
obesity, chips, and employment. McDonald's is present in more than 120 countries and territories, so there
are many rules that must be followed but the company apparatus cannot manage all stores.

4 MICRO ENVIRONMENT

4.1 Current competitors

Many competitors of McDonald's in the US are also competitors of McDonald's in the global market. For
example, Burger King, Wendy’s operate and compete with McDonald's in terms of market share. McDonald's
faces stiff competition as the fast food restaurant market is saturated. The fast food restaurant industry has
many companies of varying sizes, such as global chains like Burger King and Wendy’s.
(Thompson, 2017)
 Even McDonald's is leading in social media ahead of other competitors. Currently, McDoanld’s
Instagram account has 3,9 million followers while Wendy’s has 1 million followers and 1,9 million followers
of BurgerKing.

Competitive advantage:
McDonald's: is a leader in the fast food industry. Its main competitive advantages include nutrition,
convenience, affordability, innovation, quality, hygiene, and value-added services. An organization's success
is its ability to utilize its key strengths to overcome weaknesses. McDonald's long-term profits will depend on
its ability to capture change (Paper, 2013).

Burger King: uses two general strategies for a competitive advantage: cost leadership and broad
differentiation. The company's main overall competitive strategy is to lead in cost. According to Michael
Porter's model, this general strategy involves minimizing costs, resulting in low prices. Burger King applies a
cost-leading approach through standardization of processes to reduce costs based on economies of scale
and prevent errors (Gregory, 2017).

Wendy’s: Cost leading is Wendy's primary competitive strategy. According to Porter's model, cost reduction
and price reduction are the main concerns in this general strategy. For example, in 1988, Wendy's was the
first fast food restaurant chain to use a single price tag of 99 on all items. The company continues to reduce
prices to compete effectively with the low prices of other companies in the market (Thompson, 2017).
(M4.1) Concludes: Threats: Competition from major food chains like Burger King, KFC and mid-range local
restaurants selling similar products at much lower prices than McDonalds.

4.2 Subsitute competitors

Alternative products are a significant concern for McDonald's. The fast food market has only been active in
recent years because the taste of the market has been awakened by firms. However, America is not an
agricultural country, without a rich and diverse culinary culture, but the pressure from alternative products
is small for fast food restaurants. Some of the alternative products are: coffee, pizza. Additionally,
consumers can cook their food at home. Furthermore, the substitute products are competitive in terms of
quality and customer satisfaction. This makes the substitute product an important strategic issue requiring
approaches such as product quality improvement.
 STT Companies/ Product
1 McDonald’s/ Burger
2 Starbucks/ coffee
3 Pizza Hut/ pizza
Price Design
$2.80- $6.00 McDonald's uses yellow and red as the main
color in the design and the two golden arches to
form the M of the McDonald's logo are inspired
by the first McDonald's franchise designed by
Stanley Clark Meston.
$4.30 Starbucks removed the name and the word
“coffee” from the logo since 2011. Green logo is
essentially Starbucks representation of a female
Siren - a half-human and half animal idol who
led the sailors to their deaths.
$11.99 The illustration of the roof is highlighted in
white. They are placed inside a circle, which can
mean pizza or ketchup. Overall, the logo has a
more minimalistic look than its predecessors,
yet retains its identity.

Competitive Advantages:
Starbucks: Excellent customer service is one of Starbucks' competitive advantages. Starbucks' emphasis on
ensuring a positive customer experience has made Starbucks one of the leading companies in the coffee
industry. Meanwhile, Starbucks has also pursued breakthrough and sustainable manufacturing and sourcing
initiatives. The coffee chain achieves a uniqueness leaning towards technological breakthrough by
assimilating technology into a variety of business processes and procedures such as developing new
products, transmitting marketing messages, completing sales and track customer satisfaction. Its stores are
effectively positioned as a "third place" away from home and work, where people can spend time in a
relaxed and comfortable environment with friends or alone. Starbucks has always maintained its competitive
edge by being at the forefront of product innovation - Pumpkin spice coffees, for example - it has maintained
its popularity over time by being flexible. It has seized opportunities to adapt to changing consumer tastes
and preferences, which sets it apart from its competitors (Kader, 2020).

Pizza Hut's: The first competitive advantages is that they have a full range of restaurant and delivery
services. The second strong point is the ability to recognize names. Pizza Hut has been around for a long time
and customers know this name. Pizza Hut is often referred to as the "Pizza Innovation Leader" because it
constantly launches new pizzas to attract customers. Pizza Hut is providing good service, good taste, quality
products, nice space, qualified staff and hygienic environment. Pizza Hut is ISO / International Standards
Organization / certified (Greenontheinsid, nd).

(M4.1) Concludes: Threats: The factors related to substitute products such as product quality, service, price
competition, market, sales, and growth all affect McDonald's. Instead of buying McDonalds, people can
prepare food at home and it will be healthier and lower cost, thus it is considered a threat to McDonalds
because people will buy less causing loss of revenue.

4.3 Potential competitors

McDonald's is a market that is monopolistic competition. New entrants can influence McDonald's market
share and financial performance. In the case of McDonald's, the moderate threat to new entry is based on
the following external factors:
• Low conversion costs - Strong force
• High variable capital costs - Moderate force
• High cost of branding - Weak force

The low transition cost allows consumers to easily switch from McDonald's to new fast food restaurant
companies. Additionally, the variable capital costs of creating a new restaurant help new businesses enter
the global fast-food restaurant industry. For example, a small restaurant business involves low capital costs
compared to large conglomerates in the market. This external factor poses the risk of a new entry for
McDonald's. On the other hand, it is very expensive to build a strong brand in the industry. Many SMEs lack
the resources to create a strong brand that matches the McDonald's brand (Gregory, 2018).

(M4.1) Concludes: Opportunity: McDonald's has a chain of franchisors around the world and serves a large
number of customers every day, something that not all competitors can do.

4.4 Suppliers power

McDonald's has a global supply chain of quality ingredients at affordable prices and supplierscertainly
satisfied with offering to a large consumer company like McDonald's.
• The number of vendors in the industry in which McDonalds operates is numerous compared to
buyers. This means that the suppliers have less control over price and this makes the bargaining
power of the suppliers a weak force (Gregory, 2018).
 • The products that these vendors offer are fairly standardized, have little difference and have low
conversion costs. This makes it easier for buyers like McDonalds to switch suppliers. This makes the
bargaining power of the suppliers a weaker force (Gregory, 2018).

• McDonalds is an important customer for suppliers. This means that industry profits are closely tied to
those of the suppliers. Therefore, these providers must offer reasonable prices. This makes the
bargaining power of the suppliers a weaker force in the industry (Gregory, 2018).

• McDonald's has a food sourcing policy that is as close to home as possible, with about 70% of the
company's food coming from the UK and Ireland.

McDonald’s used to terminate contracts with two UK suppliers because they did not meet the agreed quality
requirements, and the meat supplier in China for the same reason. Even in the context of Covid-19,
McDonald’s is not carrier dependent. In general, the bargaining power of the suppliers is weak.

(M4.1) Concludes: Opportunity: By building an efficient supply chain with multiple suppliers and testing
product designs using different materials so that if the price of one material goes up, the company can
switch to another.

4.5 Power of customers

Ease of change from restaurant to restaurant allows consumers to easily impose their claims on McDonald's.
Correlated, due to the saturated market, consumers can choose from many other fast food restaurants
besides McDonald's. This condition makes the buyer's bargaining power a powerful force in influencing the
company's external environment. Furthermore, the availability of alternative products increases the
likelihood of McDonald's dependence on customers (Gregory, 2018). Especially in the context of Covid-19,
everyone chooses to cook at home to ensure safety.

(M4.1) Concludes: Threat: Easy convertible customers can reduce sales, product backlog and facilitate
competition for competitors.

5 PROFESSIONS THAT BENEFIT FROM EVFTA:

EVFTA is a comprehensive, high quality, balanced agreement of interests for both Vietnam and the EU, and
in accordance with the provisions of the World Trade Organization (WTO). This is also the most
comprehensive and ambitious agreement that the EU has ever signed with a developing country.
 Groups that are exempt from tax in whole or in large part of over 50% when the EVFTA officially
comes into effect are coffee products, bags, wallets, suitcases, natural honey, agricultural products,
ceramics, glass, and plastics. The remaining 83% of wood and wood products and 74% of electronics and
components are exempt from tax (Minh, 2020).

In addition to the industry groups that benefit directly from the commitment roadmap for tax reduction of
the Agreement, the Report of Bao Viet Securities Joint Stock Company shows that other industries also
benefit indirectly such as: logistics industry, enterprises in the field of infrastructure construction, industrial
real estate enterprises. Because, to take advantage of the trade agreements, surely the legal system and
infrastructure for roads, transportation, logistics need to thrive to adapt to higher development conditions
(Hương Nguyễn, 2019).

6 EVALUATE DECISIONS OF THE BUSINESS:

6.1:
While Covid-19 was at its peak, McDonald's served more than 10 million free Thank You Meals to frontline
staff. Inspired by our franchisees who have been providing freemeals throughout the pandemic – we began
serving free Thank You Meals across the country to America’s healthcare workers and first responders. It
was just a small token of gratitude for these heroes who have been working so hard to keep us safe and
healthy. What we didn’t know was that our Thank You Meals program would spark chain reactions of kind
gestures and feel good moments across the country. Here are six things that truly demonstrate the power of
the Thank You Meals, and the many heroes who have come together in remarkable ways:
• They served more than 10 million Thank You Meals. McDonald’s restaurants served more than 10
million free Thank You Meals, valued at more than $50 million. That’s more than 700K hot meals a
day to nurses, doctors, fire fighters, police officers, EMTs, hospital maintenance staff and more
(McDonald’s, 2020).

• Seeing your smiles made us smile. You shared with us the joy that Thank You Meals brought you.
Whether in the middle of your shift or after a long day, we’re happy this familiar red box could bring
you some fuel, comfort and relief when you needed it most (McDonald’s, 2020).
 People with Happy Meal box of McDonald’s
McDonald’s, 2020
• Happy moments have happened coast-to-coast. Many of the first respondents brought smiles to
them neighbors, extending the spirit of Meals Thank You Meals for their communities (McDonald’s,
2020).

• McDonald's restaurant staff stepped up to help. Our team, the heart and soul of our business, know
what these meals mean for Medical staff and their first responders in service. Their positive, cheerful
attitude has helped these frontline staff members feel appreciated (McDonald’s, 2020).

• Some were even more grateful to them. As they did during this crisis, our local McDonald's teams
and franchisees have been ahead of and further to spread the appreciation even further
(McDonald’s, 2020).

• We will continue to do more. That is our responsibility. Some franchisees have chosen to renew the
program on National Nurse Day to continue Express gratitude to those off the front lines. We are
happy to join them and extend Thanks The Meals for you program is also available at company-
owned restaurants. We invite all medical staff and first who responded to enjoy a free Thanks Meal
for another day at participating restaurants as one. Small sign of our gratitude towards everything
you are doing (McDonald’s, 2020).
 6.2:
On the one hand, this business decision is consistent with the strength of the brand name. Helping
McDoanld's image better and helping customers have confidence in them. If McDonald’s want your
customers to find restaurants, the restaurants must first make them trust. They need to have faith that
McDonald’s message is always correct. Building trust is not a day or two, or can be done with gimmicks.
Companies that have lost consumer trust know this very well. As these companies try to fix their image, they
realize that pouring money into advertising cannot stop negative thoughts from consumers. This is very
helpful to build trust with customers. This activity can help McDonald's in many ways. The McDonald's brand
is more popular, attracts more followers and gradually you find that these people will become more
sympathetic to your brand. The longer you promote your brand, the faster you'll build trust.

On the other hand, this activity was not consistent with the company's financial situation. According to
McDonald's Reports Second Quarter 2020 Results, as of June 30, 2020, nearly all McDonald's restaurants
around the world have opened their doors to customer but Consolidated revenue drops 30% (29% in flat
currency). System-wide sales fell 24% (23% flat currency). Diluted earnings per share are $ 0.65 (McDonald’s,
2020). This activity could cause the company to suffer losses.

6.3:
With the business desicion served more than 10 million free Thank You Meals to frontline staff not suitable
with Economic factor. Because during the Covid-19 McDoald's period a series of restaurants in America had
to be closed, resulting in a severe decline in sales of McDoanld's. Moreover, since the reopening, revenue of
McDonald's has not recovered due to the psychology of protecting health and preventing epidemics, so
people choose to eat at home more. This decision made McDoanld's economy even worse.

6.4:
By contrast, this decision increases the competitive advantage with current competotors of Micro
Environment for McDonald's. For example, KFC dropped the slogan "Taste on each finger" during the Covid-
19 period that reminded everyone to be sanitary, McDonald's served 10 million free Thank You Meals to
frontline staff to encourage and thank them during the In addition, McDonald's also separated the M logo to
remind people to keep a safe distance.
 7. D

7.1 Choose one Macro factor (among 6 factors) + 2 different companies

The impact of the Covid-19 pandemic – environmental factor in the United States has caused major turmoil,
adversely affecting the economy, tourism, financial markets, employment, shipping and businesses.
McDonald's and Subway have then taken decisions to preserve them.

McDonald’s Subway

In April, McDonald's announced it has donated $
3.1 million in food dollars to support local
communities during the COVID-19 pandemic. To
date, the donation is equivalent to nearly 3 million
pounds of food, including dairy items, beef,
products, fruits and bread (McDonald's, 2020).
McDonald's collaborates across its network in this
crisis to help ensure that food and ingredients left
over from the original menu items are produced
and that McDonald's restaurants serve the item.
destination to provide food to the community
across the country. Together with longtime partner
Food Donation Connection (FDC) and local charities,
supplements will be distributed through local
charities and food banks to those in need -
including children and families.
Franchise owners and their groups have donated
hundreds of thousands of sandwiches to the front
line medics, first responders, and other essential
staff. In addition, Subway, with the support of
customers across the country, has donated 15
million meals to Feeding America to help those in
need during this period (Subway Restaurants ,
2020).
Subway partners with Postmate with its partners:
Feed Hero Nurses and Random Acts, to coordinate
the delivery of lunch and dinner to participating
hospitals and medical centers in the most impacted
communities. by viral outbreaks, which included
Detroit, New Orleans, New York City, Philadelphia,
Southern California, and South Florida (Subway
Restaurants , 2020).

$ 3.1 million worth of food has been raised to
support local communities during the COVID-19
pandemic to date. The donation is equivalent to a
total of nearly 3 million pounds of food for dairy
products, beef, agricultural products, fruit and
bread, including:
Subway franchisor Jeff Kaplow was busy during
COVID-19. Through a project called "Heroes to
Heroes", he has raised $ 43,000 to fund sandwich
donations. So far, Kaplow and his team have
delivered more than 3,000 servings to New York
City health workers at the front line (Klein, 2020).
o More than 1.2 million pounds of 100% beef
are tested by USDA (McDonald's, 2020).

o Over 1.1 million pounds of milk such as

white and chocolate milk, skim milk and
yogurt (McDonald's, 2020).

o More than 433,000 pounds of bakery items

like bagels, cookies and pies (McDonald's,
2020).

o Over 62,000 pounds of fresh produce

including sliced apples, diced apples, salad
mix, chopped lettuce, green leaf lettuce,
sliced onions and roma tomatoes
(McDonald's, 2020).

o Over 52,000 pounds of granola and other

ingredients (McDonald's, 2020).
 7.2 Compare the impact of the Macro factor on these companies

McDoanld’s Subway

Obviously during the Covid-19 period this decision
affected McDonald's Q2 finances.
o Total sales fell 30% in the second quarter
compared with a year ago, McDonald's
announced a drop to 3.77 billion (Valinsky,
2020).
o Net income plummeted 68% to $ 483.8
million (Valinsky, 2020).
o Comparative global sales fell 23.9%. The US
and International Active Market segments
and comparable global monthly sales
continued to improve throughout the
second quarter (McDonald's, 2020).
When the US economy began to slow down,
Subway temporarily shut down 3 out of 18
restaurants while trying to keep 50 of its 105
employees on the payroll. At 15 of our open
locations, average weekly sales have dropped from
about $ 8,000 to around $ 3,000 (Cooper, 2020).
Subway laid off 150 other employees, including just
over 100 at its headquarters in Milford, Conn., In its
second-largest workforce cut in three months.
Subway closed about 13% of its units in the United
States, along with a decrease in the number of
international restaurants. US system revenue fell
2% last year to $ 10.2 billion (Maze, 2020).

o Consolidated revenue drops 30% (29% in flat

currency) (McDonald's, 2020).

o System-wide sales fell 24% (23% flat

currency) (McDonald's, 2020).

o Diluted earnings per share are $ 0.65

(McDonald's, 2020).

The figures reflect the period April to June, the first

quarter of coronavirus's effects in the United
States.
 7.3 The differences of impacts and explain the reasons
McDonald’s
Although McDonald's financial decline due to the
Covid-19 pandemic, it did not affect the company
much because McDonald's is not only a fast food
chain but also a large financial company.
The company is primarily a franchisor, with more
than 90% of McDonald's restaurants now owned
and operated by independent franchisees.
Franchisees generally contribute to the Company's
revenue by paying rent and royalties based on a
percentage of sales, with specified minimum rental
payments, along with premium fees. First is paid
when opening a new restaurant or granting a new
franchise (Jurevicius, 2020).
McDonald's also has an advantage in branding and
marketing, so by the third quarter, McDonald's
financial situation improved.
o Comparative sales continue to improve
globally, due to comparable positive US
sales of 4.6% (Mcdonald’s, 2020).
o Quarterly cash dividends rose 3% to $ 1.29
per share - $ 5.16 annually (Mcdonald’s,
2020).
Hence McDonald's is not affected as badly as some
other fast food chains.
Subway
This financial impact is not only due to Covid-19 but
also because Subway faces threats from other fast-
food companies and this is evidenced by the fact
that it has dropped from the position of the second-
largest fast-food retailer in the world to third.
Starbucks, though Subway has more stores
(Business Teacher, 2020). The rapid growth and
changing customer tastes driving this growth
resulted in Subway having 27,000 US stores in 2015,
but by 2019 it was only 23.8 thousand. This threat
may indicate a decreasing trend in sales from 2015
to 2019 and suggest that there is a saturation of
stores in certain markets (Lock, 2020).
Revenue of Subway restaurants in the US from
2015 to 2019
(Lock, 2020)
Consequently, this Covid-19 business decision
stemmed from the threats posed by other
companies. This business decision will help Subway
gain a foothold in the eyes of its customers,
 although the Covid-19 pandemic causes financial
difficulties for the company, but at the same time
opens up opportunities from threats to increase
Subway's revenue after the pandemic.

8. CONCLUSION:
McDonald is the largest restaurant serving fast food over the counter in the world. However, McDonald's
should consider the environmental factors affecting the company and the strategies it is using today, which
have positive and negative impacts on the business. McDonald's management must continuously monitor
the overall performance of the organization, by assessing what is working and what does not create the
organization's strategies. In order to effectively and successfully implement strategies, top management
needs to create a secure environment to ensure, support, change, and the organization's commitment. Then
McDonald recommended that all strategies were well planned and carefully executed in advance.
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