External factors

External factors

1. Market

   • Competition
     • New entrants: The financial barriers and the strong branding that exists in this market, makes new entrants less competitive and therefore a weak influential factor for the business (Reiter, 2014).
     • Existing market leaders
   • Due to the massive competition the Prices need to remain at the same levels as the other fast food business
   • Product lines
     • New trends
       • Veganism: With dozen of millions of vegetarians across the globe the fast food business is influenced with the adaption of products to appeal to this rising market share (Hawkes, 2017). Such new trends can impose as a threat to McDonald's due to the specific dietary requirements of this demographic market. This has also been proven as an influential factor for McDonald's as they have revealed plans to introduce product lines specifically for this market (Scott, 2017).
       • Healthy lifestyle
   • Online strategy and Social Media: The rise of social media in our lives led McDonald's to the decision to utilise their benefits to the maximum. Those Innovative marketing plans allowed them to reach a broad range of audience but also remain loyal to their demographic market (Morrison, 2014).
   • Demographic market
     • Population growth
   • Suppliers

2. Economy

   • Inflation
   • Financial crisis: People still live in the shadow of the financial crisis. Procurement activities are still influenced
   • Unemployment: The high unemployment rates lead to a considerable drop on the spending rates
   • Taxation
   • Exchange rates

3. Technology

   • Mobile technology
     • Internet usage: mobile applications for click & collect orders as well as interactive apps for seasonal campaigns
     • McDonalds has been one of the early adopters to introduce Apple Pay as a payment method (Butterly, 2015). This portrays the ability of the business to adopt technological advancements and be a step ahead of the competition (Patton, 2016).
   • Automation
     • Decrease costs
       • Less operation expenses
         • Existing employees can now be utilised in other functions
     • Enhancement of customer experience: Self service checkouts have been utilised in several stores across the country that allows the customers to purchase goods without having to interact with employees (Campbell, 2016). Wireless charging stations, also, provided in several stores offering additional value to their clients by enabling them to charge their phones while enjoying their meal.
     • Integrate systems
     • Faster delivery of the goods from the kitchen to the consumers

4. Political

   • Tax policies
   • Employment laws
     • Employment protection
   • Political stability
   • Trading limits
   • Environmental regulations: The need to increase Energy efficiency as well as the rising need of recycling led McDonald's to the decision to introduce specific programs in their shops to make their operation more friendly to the environment as well as to decrease the amounts of waste generated on a daily basis from their restaurants (Wallace & Schroder, 2013). This is both beneficial to the environment and to the business as it reduces dramatically the need for raw materials.

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