There are certain groups in Europe and the United States that protest in order to draw attention to the health implications of consuming fast food. They claim that harmful elements such as cholesterol and adverse effects of obesity are a consequence of consuming fast food. As well as this, factors such as the tax law, employment law and related trade restrictions influences McDonald’s operations; tax rates could affect the growth of the organisation. Moreover, the working environment employment restrictions like working hour’s regulation would require McDonalds to employ more staff. This type of changes would involve increasing the overall cost involved. Therefore, certain restriction have a strong influence on the operations of the organisation and certain laws penetrate in order to force the content of the food. Economic Factors
Organisations like McDonalds that have a global presence, are affected by the modification in the inflation or the exchange rates. Therefore, these changes must adapt to the issues and the effects of the economic environment. The economic factors also determine the supply and demand relationship of the raw materials within the organisation. Other economic factors that impact the organisation are wage rate and the cost of living. Socio-cultural Factors
McDonalds uses international strategies to attract different cultures, so it’s assured that McDonalds is successful in most of the countries. Therefore, the organisation improves on establishing a positive mind-set from their core consumers and also developed in order to illustrate that they can adapt. McDonald’s have understood that its customers are based on their characteristics and a recent survey has proved that McDonald’s most frequent customers are below the age of thirty-five. Technological Factors
The Company’s key tool for marketing is television advertisements. Including the technology in their operations, McDonalds tends to add value to their products. As well as this, it helps McDonalds have a close relationship with its customers as it’s an easier way of communication; McDonalds would get its reviews from the customers easier and also they can promote new products. Environment Factors
The social responsibility of McDonald’s in an area is influenced by the operations of the company in that specific area. Therefore, these actions would require accusations of environmental damage as McDonald’s uses non-biodegradable substances for the glasses and Styrofoam coffers, which are offered with the meals. This would influence McDonald’s operations as the people in charge of an area might have to influence them to change certain things that would have an impact on the environment. Legal Factors
These would be legal aspects such as tax obligations, employment standards, and quality requirements that the company has to take into consideration in order to function well.
A SWOT analysis is a structured planning method used by businesses to evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a business investment. Analysis
Innovation and diversification in their product range.
Extensive geographical presence.
Management and franchise network`s support and adoptability to the market Weakness:
Customer behaviour and expectation differs vastly among different cultures and boundaries Opportunities:
Increase in the number of applications for franchising.
Increase in demand for the service oriented sector with increase in population of the consuming class. The commitment to provide health conscious diet has attracted customers across the globe. Innovation in the product range keeps on accumulating the customer base. Threats:
Legal threats such as law suits against the restaurant, their advertising, meals, obesity caused by their food, fries, employment. Campaign against McDonalds by independent organisations like McSpotlight posing a real risk to its marketing strategy McDonald’s has problems with variations in operating and net profits which ultimately impact investor relations. Operating profit was $3,984 million (2005) $4,433 million (2006) and $3,879 million (2007). Net profits were $2,602 million (2005), $3,544 million (2006) and $2,395 million (2007) Opposition from parent group for attracting the kids by providing toys/gifts etc., influencing them to consume unhealthy fast food at an early age. Competition from major food chains like Burger King, KFC and mid-range local restaurants which sell similar products at much less price than McDonalds.