Mcdonalds analysis

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3.0 External Analysis............................................................................13
3.1. General Environmental Analysis.................................................................13
3.1.1. Political/Legal Factors..............................................................................13
3.1.2. EconomicFactors....................................................................................16
3.1.3. Sociocultural Factors...............................................................................20
3.1.4. Demographic Factors...............................................................................21
3.1.5. Technological Factors..............................................................................25
3.1.6. GlobalFactors.........................................................................................28

This study is commonly referred to as the general environmental analysis. It primarily consists of six primary factors, which are political/legal, economic, socio-cultural, demographic, technological, and global. These six sections describe the external environmental factors that McDonalds must understand toeffectively compete in a specific market.

The general environment includes those sectors that may not have a direct impact on
the daily operations of a firm but will indirectly influence it. The general environment
often includes the government, sociocultural, economic conditions, technology, and financial
resources sectors. These sectors affect all organizations eventually.

McDonald’s
Formedin 1954, McDonald’s brand is the leading global foodservice retailer with more than 30,000 local restaurants serving nearly 50 million people in more than 120 countries each day.

1. Legal. (e.g. changes in laws about packaging)  Firms are very vulnerable to changing laws and changing interpretations by the courts. Firms in the U.S. are very vulnerable to lawsuits. McDonald’s, for example,is currently being sued by people who claim that eating the chain’s hamburgers caused them to get fat. Firms are significantly limited in what they can do by various laws—some laws, for example, require that disclosures be made to consumers on the effective interest rates they pay on products bought on installment. A particularly interesting group of laws relate to antitrust. These laws basicallyexist to promote fair competition among firms. We will consider such laws when we cover pricing later in the term.
2. Economic Changes (e.g. rising living standards)
3. Technological changes (e.g. new food production techniques) The secret of McDonald’s success is its willingness to innovate, even while striving to achieve consistency in the operation of its many outlets. For example, itsbreakfast menu, salads, Chicken McNuggets, and the McLean Deluxe sandwich were all examples of how the company tried to appeal to a wider range of consumers.
 
The company has also made convenience its watchword, not only through how fast it serves customers, but also in the location of its outlets. Freestanding restaurants are positioned so that you are never more than a few minutes away byfoot in the city or by car in the suburbs. Plus McDonald’s is tucking restaurants into schools, stores, and more.

4. Social Changes (e.g. changes in patterns of eating) External Analysis

There are two conditions that are most significant in McDonald’s external environment that are:
  1. The new trend in which customers are changing fast –food restaurants to healthier ones.
  2. Thearising competition to achieve growth in this industry.
The fast-food industry is very complex and saturated. The key success factors in APPENDIX 1 show that in order to be able to compete there is a need for research and development, achieve differentiation with your competition, create quality with your products, and be price competitive. Large capital is needed to be able to develop new...
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