 Explain the importance of PESTEL analysis to organization.

(5 points)
➢ The environment is and will always be one of the most significant variables
to consider in any situation, especially in business. The PESTEL framework is then
used to categorize and assess various environmental factors. PESTLE stands for
Political, Economic, Social, Technological, Environmental, and Legal, and it refers
to the six aspects that determine the probability of success and/or failure of specific
company initiatives. In line with this, PESTEL analysis is critical for a firm to test
or verify the viability of its strategy before formal execution. A PESTEL analysis
allows a company to ensure that none of its strategic intentions will conflict with
any issue that may arise legally, politically, economically, socially, technologically,
or environmentally in the future.
 Create a PESTEL analysis for McDonalds beside MQC. (15 POINTS)

✓ POLITICAL
➢ Since McDonald's is a foreign company franchise, there are additional
restrictions and regulations imposed on international firms. The Food Safety Act of
2013 (R.A 10611) governs food safety measures in the Philippines. They must also
obey the laws and restrictions outlined in the Consumer Act of the Philippines (R.A.
7394). It hasn't been a year since the administration changed, and this transition may
or may not have an impact on the policies set for food enterprises in the Philippines.
The political environment can always have an impact on business, either directly or
indirectly.

✓ ECONOMIC
➢ Given the location of the McDonald's branch under assessment, the majority of
customers are students living on allowances, and students' spending power is
limited. This also implies that the majority of customers prefer economical and
budget-friendly foods. Given this, McDonald's mix-and-match promotion is the
ideal fit for students.

➢ Inflation, which is affecting the pricing of most commodities and raw resources
such as rice, may become a concern since it could increase menu prices and become
unaffordable for students.

✓ SOCIAL
➢ Originally McDonald's wasn't offering rice on its menu, but because rice is a
staple for Filipinos, they adapted to their customers' preferences in the Philippines.
On the other hand, as we all know, McDonald's products are high in sugar and
sodium, and this has become an image of the brand, as health is such an essential
 element for everyone, making them a less desirable alternative for those who are
health-conscious.

✓ TECHNOLOGICAL
➢ McDonald's was able to adapt and continually tried to keep up in a fast-
changing environment led by improved technology advancement. The self-ordering
kiosk expedited the ordering procedure, which was especially beneficial for students
with limited free time in between their hectic class schedules. Given the number of
students that take similar lunch breaks, an additional kiosk would be ideal, especially
because the current kiosk frequently lags.

➢ Since most of the customers are students, it would also be a great strategy to
provide free internet access for customers; they can also regulate the number of MB
a single phone may use within a single connection.

✓ ENVIRONMENTAL
➢ The use of plastic bags for take-out orders; would be preferable if McDonald's
switched to paper bags. It would also be nice if they could utilize metal utensils
instead of disposable utensils for dine-in orders to reduce plastic waste. Furthermore,
waste management is subpar; even though trashcans are labeled when opened, all
rubbish is mixed and not sorted. Waste segregation should be enforced more strictly.

✓ LEGAL
➢ McDonalds is responsible for adhering to local government laws and
regulations as a foreign firm operating locally. They must follow labor regulations
and provide enough salaries and benefits to their employees. They are also required
by the BIR to pay the relevant taxes for running a business in the Philippines.