From company started back in San Bernardino,

From humble
beginnings as a small restaurant, Mcdonald’s, a fast food restaurant, now one
of the world’s leading foodservice brands with more than 36,000 restaurants in
more than 100 countries. The history of this company started back in San
Bernardino, California, a hamburger restaurant operated by two brothers Dick
and Mac Mcdonalds with the name of McDonald’s 
Bar-B-Que in 1940. The establishment was simple, serving only a few
items: hamburgers, cheeseburger, milk, coffee, potato chips and a slice of pie.
Ray Kroc was a distributor of milkshake mixers, the one who visited McDonald’s
to sell more multimixers to the brothers. They were looking for a franchising
agent and Kay, sensing a business opportunity, proposed to help them with their
restaurant concept, which the brothers eventually accepted. In 1955, Ray Kroc
opened the first franchised McDonald’s restaurant in Des Plaines, Illinois. Six
years later, Kay bought the exclusive rights to the McDonald’s name for $2.7
million.

When
speaking about the success of this fast food restaurant, it stands out some
main characteristics: speed, price, consistency and innovation. It doesn’t
matter if you’re visiting a McDonald’s in the United Kingdom, America or China,
you’re going to have the same experience wherever you are. Customers know
exactly what to expect, and it can be important when deciding where to eat. It
is a fast service, fast meal and low prices, nothing simpler than it.
Innovation is also what Mcdonald’s bet on, they always have something to
introduce responding to their customer’s needs: When Mcdonald’s opened its
first drive-thru restaurant close to a military installation, it was with the
intention of serving military members who weren’t permitted to leave their cars
while wearing fatigues. And also, thinking in the children, the happy meal: a
box with a hamburger, drink, chips and a toy.

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Organisations
exist in an environment. The constituents of the organisation’s environment
have a significant impact on the management of the organisation that is why it
must systematically analyse its environment in formulating plans to achieve
organisational objectives. In order to be effective and maintain growth,
McDonald’s must respond to the challenges, presented by the external
environment of which it is part. Changes in the environment will affect inputs,
and the changes in inputs will affect the outputs and all entire business. In
order to improve organisational performance, it is necessary to consider how
organisations achieve an internal and external balance. For that happens, it
can be used the environmental analysis, what is a process that allows managers
to adapt to changes in their environment. The major macro-environmental factors
impacting on McDonald’s can be grouped under four headings: political,
economic, social, technological, environmental and legal (reflected in the
acronym: PESTEL analysis). There are many strategic analysis tools that a
company can use, one of them is the PESTEL analysis. It can tell all about the
situation that McDonald’s finds itself in, which can help in making decisions
and understand its current (or future) position in the market.

‘P’ is from
Political Factors- Specific markets focus on different areas of concern such as
that of health, worker protection and environment. The fast-food industry is
normally a target for governments who aim to improve the healthiness of its
population, and their operations are highly influenced by the country’s
policies where the company is situated. In 2003, after the Scientific Advisory
Committee on Nutrition (SACN) published its report on Salt and Health, the UK
government introduced initiatives to reduce the amount of salt in many food
stores. In responding, McDonald’s reduced the overall of salt in their UK
products by 14% (Food Standards Agency, 2005).

‘E’ from
Economic Factors- McDonald’s is a global brand, what it means that every
economic factor that impacts McDonald’s environment will affect the entire
business. The 2008 economic recession impacted the whole company due to its
impact in the USA and Europe. This recession brought a negative impact on the
disposable incomes what made people wanted to save some money and have food at
home, but if they were going to somewhere else, they would like to have a cheap
meal what is exactly what McDonald’s is about. As Daniel Gross once said in his
article at Slate in 2009: ”Who won the recession? Mcdonalds.”

‘S’ from
Social/Sociocultural Factors- Having a look at the SWOT analysis for
McDonald’s, one of the company’s weakness is his poor public image. The
documentary “Supersize Me” by Morgan Spurlock is one of the examples of how
people see that McDonald’s contributes to society’s obesity, how each
McDonald’s meal provides a large number of calories but not too much nutrition.
The business faces a real challenge in changing public thinking. As respond,
this fast food restaurant has understood its customers based on their
characteristics, to improve its products mix to satisfy a more diverse target
market. As an example in India, where Hindus do not eat beef and Muslims do not
eat pork, it was necessary to introduce the vegetable McNuggets and a Maharaja
Mac with lamb meat (Luke, 2000). Many of McDonald’s products are often
criticised for their adverse health effects, which McDonald’s has been focusing
on introducing healthier versions to its menu such as salads, wraps, fruits and
vegetables (Forbes, 2017). McDonald’s also has the opportunity to grow based on
the external factor of the widening wealth gap as his target consumers are also
from medium and low-income households, the ones who are more than happy to
spend less than £5 in a meal.

‘T’ from
Technological Factors- McDonald’s success partly depends on technological
applications. The company can afford to invest in new technology that keeps
them at the forefront of innovation, attempting to gain an advantage over
competitors. McDonald’s can apply more automation to maximise productivity,
increasing its research and development investments to improve business
effectiveness and efficiency. Also, cannot be forgotten that nowadays the
internet power influences many of us, what is exactly what firms aim when they
do internet marketing. In 2009, McDonald’s finally created a Facebook and
Twitter account, establishing a strong social media presence, has started to
run a number of successful online marketing campaigns. ”The Ask McDonald’s
YouTube campaign” with more 20,000 questions were answered about their food-
one example of how McDonald’s’ can build trust and reputation with the help of
social media. The company received much positive feedback with its campaign,
but also it was a plenty number of negative articles posted on Facebook and
Twitter about the company and its product, including a fake post assuming that
was found ‘human meat’ in a McDonald’s hamburger (Christopher, 2014). Such
information is ready to spread online, some people believe in those pranks, and
the brands are the one who is affected. Companies need to be aware of this
situation by having an online presence and a quick response to those accidents,
somehow it will reduce the potential damage.

‘E’ from
Environmental factors- In recent years, have been a lot of concerns around the
environment what brought a range of green initiative. As a response, many
companies started to be more ”green” and incorporate environment initiatives
to reduce the damage caused by their business production methods. McDonald’s
has been suffered many protects against “the promotion of junk food, the
unethical targeting of children, exploitation of workers, animal cruelty,
damage to the environment and the global domination of corporations over our
lives” (Veggis, 2014, p3). Many of McDonald’s stores across the UK were
involved in different protest marches in an “anti-McD Day of Action”
that is repeated every year on the same date. In 1997, McDonald’s sued two
protestors for libel who were repeating their claims in different McDonald’s
restaurants. The judge found the allegations as libel but also others as truth
and could not be considered libellous, claims as they “falsely advertise their
food as nutritious, risk the health of their long-term regular customers” and
“are culpably responsible for cruelty to animals reared for their products”
(Justice Bell, 1997, p13). As respond, McDonald’s initiated a number of
Corporate Social Responsibility (CSR) policies focus on reducing the
environmental impact of the business. In 2008, Mcdonalds introduced the most
comprehensive global packaging design in the brand’s history (Mcdonald’s,
2008); in 2014, instigated investigations into the care of the animals reared
for their product supply, with a view to ensuring no unnecessary cruelty or
inhumane treatment is taking place (McDonald’s, 2014c).

‘L’ from
Legal Factors- The legal environment where a company operates is specific and
dependent on the country and market in question. However, most of the markets
where McDonald’s operates, have some way of a Health and Safety legal
framework, particularly concerning food preparation. All countries have somehow
a public health inspection system with concern to food producers – The Food
Standards Agency is the one who is responsible for protecting public health
about food in the United Kingdom (Food Standards Agency, 2016). McDonald’s
needs to have a lot of laws incorporated in each market where it acts,
including tax and payroll requirements, operating hours, business registration
tax requirement, labour and employment laws and environment certification
(Mcdonalds, 2017). Actually, Mcdonald’s dedication to food safety required by
law can be used as a marketing tool, where is highlighted their commitment to
quality (Campbell et al, 2008).

Business
organisations typically consist of a number of functions, and it is important
to each of them has activities in order to understand the role of management in
the organisation.  A typical business
organisation may consist of the following primary functions: Production,
Research and Development (R), Purchasing, Marketing (including the
selling function), Human Resource Management, Accounting and Finance. Marketing
involves knowing what customers want and analysing how the organisation can
satisfy these wants at the right price. A fundamental activity in marketing is
managing the Marketing Mix consisting of the ‘4Ps’: Product, Price, Promotion
and Place. McDonald’s has the right product for the price that a customer wants
to pay, with the promotion that attracts customers in the right place at the
right time. The Human Resources function is concerned with Recruitment,
Training and development, Employee Relations, Health and Safety matters,
Redundancy procedures. Organisations are dependent on their employees.
Consequently, their recruitment and selection require careful management. In
recent years, the Human Resources function has attained a more important status
as there has developed an increasing need (especially in service organisations)
to ‘get the most’ from employees, regarding customer service, for the benefit
of the organisation.

McDonald’s
primary strategy is cost leadership. In Porter’s model (Porter’s five forces),
this general strategy involves reducing costs to offer products at low prices.
As a low-cost provider, McDonald’s sells products that are relatively cheaper
compared to competitors like Arby’s. However, the company also uses broad
differentiation as a supporting generic strategy. This secondary strategy
involves developing the business and its products to make them distinct from
competitors, for example, through McCafé products.

In
conclusion, McDonald’s is a big company who can use their opportunities to
challenge itself against their threats and use its strengths against its
weaknesses. A PESTLE analysis should feed into a SWOT Analysis and as it helps
to determine the threats and opportunities represented by macro-environment
forces that the organisation usually cannot control. By doing SWOT analysis on
Mcdonalds, it is seen its strength is the brand and detailed market research to
create the right marketing mix. McDonald’s has been around for a long time,
that is why is important to keep innovating. McDonald’s threats are the new
competitors and also the changing customer lifestyles. Therefore, it has the
opportunity to increase numbers of customers looking for food that is served in
a quick, cheap and friendly way.

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