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Pest analysis

The document discusses how PEST analysis is used to analyze the external factors in a company's political, economic, social, and technological environment that could affect its success. It provides examples of factors in each category that should be considered, such as legislation, economic conditions, social trends, and emerging technologies. Specifically, it analyzes McDonald's use of PEST factors like emphasizing food safety and streamlining processes in response to health concerns and changing consumer preferences. It also discusses McDonald's expansion in Asia by tailoring its menu to local tastes.

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Made By: Subir K. Majumdar Pretam Sarkar Sanjana Lakra Srishti Dey
An organisation’s success is influenced by factors operating in it’s internal and external environment; an organisation can increase it’s success by adopting strategies which manipulate these factors to it’s advantage. A successful organisation will not only understand existing factors but also forecast change, so that it can take advantage of change within the environments in which it operates. PEST analysis is used to identify the external forces affecting an organisation .This is a simple analysis of an organisation’s Political, Economical, Social and Technological environment. A PEST analysis incorporating legal and environmental factors is called a PESTLE analysis.
 P for POLITICAL FACTORS  E for ECONOMIC FACTORS  S for SOCIAL FACTORS  T for TECHNOLOGICAL FACTORS
 Legislation such as the minimum wage or anti discrimination laws.  Voluntary codes and practices  Market regulations  Trade agreements, tariffs or restrictions  Tax levies and tax breaks  Type of government regime eg communist, democratic, dictatorship
 Home economy situation and trends  Overseas economies and trends  General taxation issues  Market routes and distribution trends  Interest and exchange rates  International trade/monetary issues
 Lifestyle trends  Demographics  Consumer attitudes and opinions  Brand, company, technology image  Consumer buying patterns  Fashion and role models  Ethnic/religious factors  Advertising and publicity  Ethical issues
 Competing technology development  Associated/dependent technologies  Replacement technology/solutions  Manufacturing maturity and capacity  Information and communications  Technology access, licencing, patents  Consumer buying mechanisms/technology
• Health and Safety Guidelines  fast food consumption has been shown to increase calorie intake, promote weight gain and elevate risk for diabetes  criticised for caloric content, trans fats and portion sizes  Ecological/environmental issue  one of the largest consumers of paper products in the US leading to millions of pounds of food packaging waste littering roadways, clogging landfills and spoiling quality of life.
 Home market and international pressure- groups  pushing for increased regulations to make companies more responsible  Wars and conflicts  war between countries where the company operates  symbol of capitalism
 low set up costs leading to rapid expansion  keeping the prices low for the customers.  franchising facilitates set ups  McDonald’s corporation provides financing assistance and training for new franchise owners to manage cash flow and keep businesses profitable.
 Health fears  customers now opting for more healthier options like SUBWAY which offers more variety for health conscious customers.  Emphasis on food safety
 Streamlining of processes to improve efficiency  through technology enhancements such as FPI's Help Desk Service, network and application consolidation and other technology implementations, operations of the company are greatly improved  Marketing done by means of television advertisements  Implemented technology to improve supply chain management
 McDonalds changed its image vastly by evaluating the current menu and making changes to it from using organic products to revising the whole menu entirely by offering salads and vegetarian burgers. The accurate and accessible nutrition information help guests make informed menu choices.  Incorporated safety management systems, including Good Manufacturing Practices (GMP), a verified Hazard Analysis Critical Control Point (HACCP) plan and crisis management, food security and other applicable programs
 Increase presence in Asian countries  When the first McDonald's opened in Beijing more than a dozen years ago, 40,000 people lined up to observe a Big Mac. It is growing faster in China than in the United States. It owns & operates more than 600 stores across 105 cities in China. More than 100 more McDonald's stores will be added annually to Chinese cities within the coming years.  Locally focused menu choices  In India – McAloo Tikki, Paneer Salsa Wrap, McVeggie  In China - Szechwan-style spicy chicken wings, seafood soup, oriental sauces etc
Pest analysis