McDonalds PESTLE Analysis
Whenever prominent corporations want to operate in a wider business environment, they study the economic, technological, legal, and environmental state. In other words, a company wants to know what to expect in a new market. The information about these determinants and even more is available in the Mcdonalds PESTLE analysis:
Political factors
Since Mcdonald's is the largest and most famous fast food company, most of its concerns connect to food safety. Many countries have stricter safety standards than the US, Mcdonald's place of origin. For this reason, the corporation has to align with the local legislation or avoid opening branches where losses can exceed profits. More risky regions in terms of policy would be Middle Eastern or Asian countries.
Economic factors
If we talk about the economy as the next criterion of the external environment, the circumstances differ from country to country. As an illustration, the recently slowing economic growth in Eastern Europe is a drawback for the local Mcdonald's restaurants. On the contrary, the steady growth of the economy in Western Europe and developing countries is a good sign. Nonetheless, employees rarely use Mcdonald's to satisfy their career attitudes. Therefore, a high employee turnover rate causes losses for the company.
Social factors
Mcdonald's views cultural preferences as a crucial social factor, so the chain adapts to people’s tastes in different regions. An example of such adaptation is the famous Japanese menu with lots of rice and fish. Likewise, the Indian Mcdonald's branch caters to the mostly vegetarian tastes of citizens, and so on. However, the trend for a healthy lifestyle and weight loss might threaten the company, so it needs to change its strategy.
Technological factors
In recent years, Mcdonald's has tried to keep up with worldwide technology trends. This strategy helps the fast food corporation to boost demand in all countries. One of the greatest high-tech implementations was the sensory screens for ordering food. This decision allowed to attract more customers who wanted more menu positions. In the pandemic period, contactless restaurant options became even more topical. Further automatization would be a winning strategy for Mcdonald's.
Legal factors
One of the biggest legal issues for Mcdonald's branches worldwide would be changing employment laws, especially the increase of minimum wages. In this case, changes are inevitable, so the management should think of redistributing the profits correctly. Next, it’s the company’s priority to follow the changes in laws of every country. Sometimes, governments ban certain ingredients or toys from Happy Meals.
Environmental factors
Regarding the ecology, the management of Mcdonald's actively shows their awareness of environmental issues. Becoming more environmentally friendly is the company’s objective. For instance, Mcdonald's tries to switch to only recyclable packaging to decrease pollution. Also, the local restaurants in many regions prefer to use energy-efficient technologies. Yet, there is an even worse ecology issue, global warming. The changing weather conditions might lead to a shortage of food and disruption of supply chains.
The detailed PESTLE analysis for business helps its top managers make proper decisions on both new and usual markets. Foreseeing the dangers and opportunities is essential for a company’s success.
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