The aims of this paper are to analyze the external environment of a business, called McDonald’s, and to analyze the ethics and CSR activities of McDonald’s. The external environment analysis of McDonald’s discloses that it is facing challenges of political, legal, social, and economic issues. In addition, it is facing high competitive rivalry along with high customer bargaining power. In terms of ethics and CSR activities, McDonald’s is performing better in the competitive markets. The effective activities of McDonald’s CSR include better communication with the different stakeholders. CSR’s stakeholder method is widely used in the present business. Different activities of CSR help the stakeholders of McDonald’s mainly customers, local communities, and disadvantaged people. McDonald’s has reached the social and environmental goals. To hold with the requirements of the stakeholders, McDonald’s has been working in five sectors of CSR. These are: a) providing good food and consumers’ betterment; b) maintaining the constant chain for the suppliers; c) contributing to the regional community.
Table of Contents
Task 1: Overview of the external influences on McDonald’s.
1.1 Company (McDonald) overview.
1.2 External analysis.
Task 2: Ethics and Corporate Social Responsibility (CSR)
2.1 Ethics and CSR relevant to McDonald’s and its influences on McDonald’s business policies and decision-making.
2.2 Effectiveness of McDonald’s responses to ethics and corporate social responsibility (CSR)
2.3 Areas for improvement in the response of McDonald’s.
Task 1: Overview of the external influences on McDonald
Major challenges of a business (like McDonald’s) come from its external environment. Thus, businesses need to apply several models (including PESTLE and Porter’s Five Forces) to analyze their external business environment (Kotler et al., 2015). This paper (in task 1) gives an overview of the chosen organization, McDonald. Then, the external influences of McDonald’s are analyzed by using the PESTLE and Porter Forces Model, and competitor analysis.
1.1 Company (McDonald) overview
McDonald’s is one of the most popular and well-known fast food and burger companies across the world. It was founded in 1940. McDonald’s has about 36,900 branches around the world to provide services to customers (McDonald’s, 2016). The number of employees is 375,000. The key products of McDonald’s are three kinds of burgers, hamburgers, cheeseburgers and chicken burgers, breakfast items, coffee, desserts, tea, soft drinks, French fries, chicken items, etc. The revenue of McDonald’s is US$24.622 billion and the total asset of McDonald’s is US$31.024 billion (McDonald’s, 2016). McDonald’s offers vegetarian items and salads, other localized fare and sandwiches, wraps.
1.2 External analysis
PESTEL analysis includes political, environmental, social, technological, ecological, and technological factors of the business (Kotler et al., 2015). PEPESTLE analysis of McDonald’s examines that to manage its global volatile economy there are several risks and chances that the organization should concentrate on.
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|Factors||Analysis of McDonald|
|Political||McDonald’s regards the influences of the environment of political on its organization. This feature of PESTEL analysis explains governmental action influences on the macro-environment or remote of organizations (Dudovisky, 2016). In McDonald’s business, the important external factors of politics include: raising global trade contracts, Evolving public health policies, and pending tax agencies (Adamkasi, 2016).|
|The growing trend of the US economy is providing opportunities for McDonald’s to maximize its operation in America. However, in Europe (most importantly in the UK) it is facing challenges, mainly due to Brexit/EU referendum issue, and the high tax imposed by governments (Dudovisky, 2016). On the other hand, the economic growth in Asia (mainly in China) is giving an opportunity for McDonald’s (Adamkasi, 2016).|
|Social||People over the world are becoming more health concern than ever before. Thus, evolving lifestyles are affecting the sales performance of McDonald’s (Adamkasi, 2016). In addition, the food habits of global people are also changing overtimes. Once the best sellers (like hamburgers and fried potatoes) are not special now. On the other hand, food habits vary from culture, region. For example, people in the EU and the US like hamburgers and fried potatoes, Asian people prefer rice (Dudovisky, 2016).|
|Technological||Although technology plays limited roles in the fast-food industry, the proper usages of technologies improve management and productivity, the efficiency of resources, and reduce the wasted time (Dudovisky, 2016). Technology (like Wi-Fi) used in McDonald improve customer satisfaction and inventory controlling technologies improve ordering, forecasting sales, inventory management system. McDonald’s should talk to the next technological external factors such as restrained R&D industry activity, raising organization mechanization, and enhancing sales through Smartphone devices (Adamkasi, 2016).|
|Legal||McDonald’s has to meet several legal requirements. The main legal requirements that Mcdonald’s faces are: a) animal welfare regulation; b) new legal minimum wage levels in the US and EU; and c) local health regulations in schools and workplaces (Dudovisky, 2016). McDonald’s also faces legal issues related to consumer rights, health, and safety issues (Adamkasi, 2016).|
|Environmental||McDonald’s faces several environmental issues. It needs to develop strategies to reduce carbon and greenhouse gases from its machinery and equipment. It is also socially responsible to save the community and environment (Dudovisky, 2016). In addition, global climate changes, international terrorism, rough weather affect the supply chain of McDonald’s and its performance (Adamkasi, 2016).|
Findings from PESTLE Analysis
The finding of PESTEL analysis reveals that McDonald’s has huge chances for organizational development and business growth. The organization may capitalize on strategies of technology to increase productivity and efficiency. However, McDonald’s needs to understand the changing needs and expectations of customers. In addition, it needs to use sophisticated technologies to improve its business performance and efficiency and improve customer satisfaction. It also needs to maintain the legal and environmental requirements to meet stakeholder demands………