External factors for McDonald's (PESTEC)

External factors for McDonald's (PESTEC)

1. Political

   • The main political issues that affect McDonald's are the recent UK laws. The new GDPR rules have affected the business operations. Because of this new laws McDonald's has to make sure outsiders do not have access on their data protections. This makes them more transparent to others.
     • This is also connected to the environmental factors because these laws define how McDonald's should adapt to the environment. An example for this issue is the human rights that the company has to follow. This consists on respecting staff and adapt to different work ethics, different ethnicity and background. All of this is by law therefore McDonald's has to make sure they do not break this law.
   • Different legislations have also impact McDonald's way of life. Another issue is the Red Tape. The legislations that have an affect on McDonald's are the claims of unfair labour conditions and low pay. This has an affect not only on the company's reputation but also on the work ethics within the stakeholders of the company more specific employees.

2. Economical

   • Some economical factors that have a big impact on the economy for McDonald's are the slow but also stabled growth of developed countries, the huge demand increase for McDonald's products and the revenue and profit increase for McDonald's. The slow down on the Chinese economy also affects McDonald's as a business, This is because the Chinese market is a major contributor to McDonald's revenues.
     • This is a huge advantage for McDonald's as they are one step ahead of their competitors due to these economic factors. Something that McDonald's struggles to do in which could help them across other companies globally is the production line and changing their menus according to the country they are in.

3. Social

   • Some social factors that have been an issue for McDonald's in the recent years is the fact they don't comply to certain demands. Some people in different countries demand healthier goods, but because of McDonald's high recognition these demands are not taken to account. Although there has been some changes with some of their products for example, their swap from high sugar ingredients for low calories alternative and their high protein smoothies, customers are still complaining.
     • In order for McDonald's to move forward with the growing of food trends they will need to cut on the bad reputation when it comes to their production of their goods.
     • Another social factor that has a big impact on the customers is the student offer they give out. The offer they give out is a free cheeseburger, mayo chicken or mcflurry. This is done by showing your student ID at the counter.
   • The demographics of McDonald's shows how many loyal customers and how many customers in general buys their goods each day. A report explains that 25% of people in the UK eat some type of fast food everyday. British people consume 31% more packed food then fresh food. 18-29 (age) demographic say they eat at McDonald’s at least once per week.
     • One thing about these demographics is that it has not changed in time. This is an advantage for McDonald's because they are making the profit they expect to make even if they know it is not good for the population.

4. Technological

   • Some technological factors that had a really good impact on the success of the business is next in new technology for example the new self check out. This has increased faster services. Faster service therfore means happy customers. Thanks to this, the level of output has increased.
     • The invest in new technology also helps them to keep their loyal customers as they can't get enough of the independence they are getting from the company. Mcdonald's also developed a place where customers can say their opinions and reviews. These are customers blogs. They do this in order to keep connected with their loyal customers.

5. Enviromental

   • Because McDonald's is such a large succesful company all around the world, they have to deal with a large niumber of enviromental issues.
     • A main issue that stands out when you talk about enviroment is their production of beef. McDonald's are keen on producing great beef and also they see themselfs to be enviromental friendly. In order to be sustainable McDonald's buys around 2.5% of all beef produced in the European Union, sourced from approximately 470,000 farms. They do this in order to carry out suitable production.
     • Another issue is their packaging. McDonald's has been seen as one of the most wastleful companies in the world with their issues when it comes to recycling.
     • Another issue that has affected the production of the company is the waste of goods. Because of this issue they have leaned back on the production of their goods. As reported by 'Resource' McDonald's in france has been in a recent dilemma. This is because the company in France has not being carrying out a good waste management method.

6. Competitive

   • Competition is very high when you talk about McDonald's. They are very popular in the market, this is also a disadvantage as other businesses may want to steal their customers. Some of these competitors are companies like KFC, Burger King etc. Mcdonald's recently has tried to loyalty programs. KFC has also tried to launch a loyalty programme by giving out loyalty cards according to their website. They are doing this by launching an app. McDonald's tackle this very well by giving out different vouchers in news papers and oyster tickets.
     • As competition is high, McDonald's will have to adapt. Competition also means that McDonald's will have to bring out new innovations to the market, in order to make sure they stay on top of competition. Satisfaction of demand is also key to McDonald's. As customers are key for this factor, the social factor will also impact competition. McDonald's competitors such as KFC has also developed a delivery service. thanks to this they have caugfht up to McDonald's when it comes to efficiency.

7. Swot

   • Social: This is an oppurtunity for Mcdonald's as they can grow their market by keeping customers happy but it can also be a threat. This is because in order to keep them happy they are forced to cut down some of their ingredients that they use to make their goods. These ingredients consist on their beef burgers, how they treat them and their french fries.
   • Environmental: The environmental factor is most certain a threat to McDonald's. This is because it is one of the different areas in which they struggle to keep people happ, including pressure groups. The centre for science in the public interest (CSPI) is one of the pressure groups that has an affect on McDonald's activity. Another pressure group that has a big affect on McDonald's is the 'greenpeace' pressure group.
   • Political: The political factor is also a threat to NcDonald's. This is because of the so many rules that Mcdonald's has to follow in orger to satisfy these factors. Some rules also affecting other factors for example the environment.
   • Competitive: The competitive factor is an opportunity for McDonald's. This is because they are one step ahead of their competition, mostly thanks to their loyal consumers. Mcdonald's recently has tried to loyalty programs. KFC has also tried to launch a loyalty programme by giving out loyalty cards according to their website. They are doing this by launching an app. McDonald's tackle this very well by giving out different vouchers in news papers and oyster tickets.
   • Economical: This is an opportunity for McDonald's. This is also due to the brand recognition world wide that they have. They have different links all around the world. They also have millions of different stores across the world.
   • Technological: This is most definitely an opportunity. This is because of their new innovations in which are managing to keep customers happy and their new fast services. Although this can be seen as an opportunity in some cases could also be a threat. This is due to the lack of staff they hire because of these new innovations in technology.