PESTLE ANALYSIS OF MCDONALD’S
GROUP PROJECT REPORT
Name of Students
Pestle is an analysis of the external macro
environment in which a business operates.
PEST analysis (Political, Economic, Social and
Technological analysis) describes a framework of
macro-environmental factors used in the
environmental scanning component of strategic
. Some analysts added Legal and rearranged the
mnemonic to SLEPT;
inserting Environmental factors expanded it
to PESTEL or PESTLE, which is popular in the
McDonalds is a leader in convenient foods and
beverages, with revenues of about $23 billion and
over 1.6 million employees serving the customers
The company consists of the snack business of
Beverages and Foods. PepsiCo brands are
available in nearly 115countries having more than
24,500restaurants in the world providing 24 hour
The modest beginnings of McDonald‟s in Illinois turned
out to be among the main brand names in the
It has been synonymous to what is widely-accepted the
fast-food concept. The company operates over thirty
one thousand stores all over the world to date.
It was one of the first to perfect the concept of fast
service in the food industry in its early days of
operations in 1955.
Given that the products of the company are mainly
western in character, their operation has also expanded
to the Asian region.
In the rest of the globe, it operates thousands of store
franchises that functions autonomously.
There is an impending legal dispute in the McDonald‟s
franchise in India where certain infringement of rights
and violation of religious laws pertaining to the contents
of the food.
The existence of meat in their menus in India is
apparently offensive to the Hindu religion in the said
. There are also other studies that points to the
infringement of McDonald‟s Stores with reference to the
existing employment laws in the target market.
Like any business venture, these McDonald‟s stores
have to contend with the issues of employment
procedures as well as their tax obligations so as to
succeed in the foreign market.
Since it is apparent that the company is expanding
continuously, it is wise to deal directly with the proper
authorities in the respective markets that they intend to
This way, the company can adopt a good way of establishing
good relationship with the government. It is advisable that the
company rests on the good graces of the government on
which they will be penetrating.
To do this, all they have to do is accomplish all the prescribed
acts and satisfy all the prerequisites for doing business. The
company must also be acquainted with the law in order to
know what their responsibilities and their possible liabilities.
Also McDonalds should protect its workers by ensuring all the
hiring, compensation, training or repatriation in accordance to
the Indian labour laws.
Branches and franchises of McDonald‟s have the tendency to
experience hardship in instances where the economy of the
respective countries are hit by inflation and changes in the
exchange rates, India is not an exception to it.
The customers consequently are faced with a stalemate of going
over their individual budgets whether or not they should use up
more on these foreign fast food chains like McDonalds.
Hence, these chains may have to put up with the issues of
the effects of the economic environment. Particularly, their
problem depends on the response of the consumers on these
fundamentals and how it could influence their general sales.
In regarding the operations of the company, McDonald‟s tend to
import much of their raw materials into a specific country‟s
territories if there is a dearth of supply. Exchange rate
fluctuations will also play a significant role in the operations of the
However in case of India the company has been able to maintain
a constant level of prices for their products
before penetrating the market, the
company must carry out a well conducted
market research, especially in the
movements in the economic environment
which McDonalds had done before entering
the Indian market.
The company has been able to bear the
frequency of the shifts in the inflation rate as
well as the fluctuations in the exchange
rates which affects the operations of any
McDonald‟s indulge a particular variety of consumers with definite types
of personalities. It has also been noted that the company have given the
markets such as the United Kingdom and India, an option with regards to
their dining needs.
McDonald‟s has launched a sensibly valued set of food that tenders a
reliable level of quality for the respective market where it
operates. Additionally, those who are aged just below the bracket of
thirty-five are said to be the most frequent consumers of McDonald‟s
In the case of McDonald‟s they establish a good system in determining
the needs of the market. The company uses concepts of consumer
behaviour product personality and purchasing decisions to its advantage
which is clearly evident in case of India as the company was quick in
removing their Pork and Mutton products from India‟s menu. It is said to
have a major influence on the understanding of the prospective
performance of the organisation in a particular market
McDonalds should obtain the relevant information
from the target market in addition to the individual
customers of the organisation.
Similarly, the company should find out the shifts in
areas like the consumer behaviour and purchasing
patterns of the market.
Fundamentally, this is the key condition for
executing a suitable customer relationship
Also, the company should constantly survey and
learn about local culture to better understand and
design the best product for them.
McDonald‟s generates a demand for its own products. The company‟s key
tool for marketing is by means of Online Facebook and Google ads,
Collaboration with websites like Snap deal and Times deal to promote sales
in India, television advertisements, banners and hoardings.
There are similarly some claims that McDonald‟s are inclined to interest the
younger populations more.
The existence of „play spots‟ as well as „ toys in meals‟ offered by the
company shows this actuality. Other demonstration of such a marketing
strategy is apparent in the commercials they use.
The „ like‟ has become endorsers for McDonald‟s worldwide “I‟m loving it”
campaign. Moreover, the operations of McDonald‟s have significantly been
infused with new technology.
Elements like the inventory system and the management of the value chain
of the company allows for easy payments for their suppliers and other
vendors which the individual stores in respective markets deal with.
McDonalds use the internet to their advantage. The
cost-effectiveness, interactivity and real-time effects
of the communications are a good way to find
It is also a good way to correspond with the
respective McDonald‟s headquarters in every
The company must also look into the use of IT to
enhance their inventory operations.
As the operations units inbound and outbound
logistics improve, the company will expect
significant savings and reduction of costs in the
There has been the recurrent bellowing in opposition to
the fast food industry which has made McDonald‟s apply
a more careful consideration on their corporate social
The company has provided their customers the relevant
data that they need with reference to the nutritional
substances of their products. This is to attend to the
arguments of obesity charged against the products of
In the same way, the consumers provided freedom in
choosing whether or not they want to purchase their
meals. This is tied up with the socio-cultural attributes of
the market on which they operate.
This was prime reason which forced McDonalds to
eliminate beef, pork and Mutton out of India‟s product
As a certified fast food operator, there are many regulations and
procedures that McDonalds should follow. McDonalds should protect its
integrity and consumer confidence by ensuring all materials and process
are as claimed or must followed.
Other legal requirement that the business owner should follow as
stipulated in laws are such as operating hours, business registration, tax
requirement, labour and employment laws and quality & environment
certification (such as ISO) in which the outlet has been certified.
The legal requirement is important because the offenders will be fined or
have their business prohibited from operating which can be disastrous.
The company should hire local counsels to deal with the legal conflicts in
individual markets on which the company may encounter. This shall
ensure the company that the lawyers that will handle their legal affairs
are more versed with the legal regime that would ease out certain
problems on their operations.
The social responsibilities of McDonald‟s on the
country are influential to the operations of the
These involve accusations of environmental
Several civic groups in India have made actions to
make the McDonald‟s franchises in India aware of
the rather abundant use of Styrofoam containers
and the resultant abuse of the environment.
The company should find out the environmental regime that
governs the operations in every market. It should also monitor
the waste disposal of the company.
McDonald‟s should minimize the use of Styrofoam materials
and plastic cups.
Constant updating of the social corporate responsibility is
imperative. This should also entail that the headquarters
should take in hand, a manner of internal control of those that
would infringe upon this company objective.
Sanctions such as revoking of the franchise license or a
particularly high fine should be installed to serve as a
deterrent to infringement.
As we all know that the most significant contribution of this
generation is the combination of globalization and
internationalization in the businesses sector.
Developments in the international setting have an effect on
the more particular factors in the operations in individual
Even though McDonald‟s may have been deemed as demigod
in the fast food business in the international scene, but what it
preserves as revealed in its processes is the need for
The slight changes that take place in the market have an
effect on the operations of the business in any case.
Hence, any business in spite of the muscle of the brand name
or the size of its reserves could not afford any failures in their
As implied the markets of nowadays manifest a cut throat
rivalry with the individual competitors, recognized brands or
To do this, all they have to do is accomplish all the prescribed acts and
satisfy all the prerequisites for doing business. The company must also
be acquainted with the law in order to know what their responsibilities
and their possible liabilities.
Before penetrating the market, the company must carry out a well
conducted market research, especially in the movements in the
economic environment. The frequency of the shifts in the inflation rate as
well as the fluctuations in the exchange rate affects the operations of the
It is imperative that before a franchise is granted to a particular market, a
well drafted and comprehensive market research should be conducted
initially so as to establish the acts that would conform to good customs,
public policies, and morals of the said state.
The company must also look into the use of IT to enhance their inventory
operations. As the operations in its inbound and outbound logistics
improve, the company will expect significant savings and reduction of
costs in the operations.
Find out the environmental regime that governs the
operations in every market. Monitor the waste
disposal of the company. Minimize the use of
Styrofoam materials and plastic cups. Constant
updating of the social corporate responsibility is
Hire local counsels to deal with the legal conflicts in
individual markets on which the company may
encounter. This is shall ensure the company that
the lawyers that will handle their legal affairs are
more versed with the legal regime that would iron
out certain creases on their operations.