Introduction
In this assignment I will be researching and investigating what business markets are and what the
business environments are as well. I will do this by using a business as an example.
External Environment
The External Environment are all of the possible factors that will affect the business externally. These
factors are made of Political, Economic, Social, Technological, legal and Environmental. The Political
Factors relates to having government support, the Economic factor relates to economic growth and
exchange rates, the social factor relates to how people spend their money on due to trends, the
technological factors relates to the latest technology being available which means there will be
improved communications, the legal factors relates to all sorts of business legislation and
government departments and the environmental factors relates to the way the environment will be
affected such as carbon emissions, pollution, waste and also recycling.
PESTLE Analysis - McDonalds
Political - They must respond to political laws and influences in over a hundred countries. Like any
other restaurant, they must comply with health and hygiene regulations. If their food doesn’t abide
by a certain code, they would be shut down. Their employees must also adhere to all food and
health laws while working in any given location. McDonalds have the opportunity to be able to
expand it’s business because of improved international trade and this will enhance global supply
chains. The governmental guidelines for diet and health can be a threat but also an opportunity for
McDonalds. The reason why it can be a threat is because it puts a lot of pressure on McDonalds as
they have been criticized in terms of the effects of their products on customer’s health. The reason
why it can become an opportunity is because they can then try to improve the products so that it is
suitable for customers.
Economic - In 2008, McDonald’s took a financial hit from the economic recession. Disposable income
was at an all-time low while people scrambled to find new jobs. Since then, McDonald’s brand image
has taken a hit due to an increase in health consciousness among consumers. Many fast food
restaurants are adding healthy options to their menu while trying to shed their “junk food” image.
But it’s hard — and expensive — to change the opinions of the public. The slow however stable
economic growth of developed countries is an opportunity for McDonalds to be able to grow and
increase the stability of their restaurant chain business. The business has the opportunity to be able
to grow through expansion in high growth developing markets such as Asia.
Social - Consumers obsessively scrutinize what they’re putting into their bodies. There is a rise in
low-carb and low-sugar diets. With busy lifestyles in more urban places means there will be more
people likely coming to the store to buy food and drinks. McDonalds have the opportunity to be able
to grow based on the increasing demand of customers to buy fast food rather than cooking at home.
This tendency is also linked to busy lifestyles in urban environments. These types of lifestyles will
increase customers likelihood of dining in restaurants such as McDonalds rather than be cooking at
home. McDonalds has the opportunity to increase their flexibility in product design to be able to
satisfy the customers preferences in different markets around the world. However, the healthy
lifestyle trend can be a huge threat for a fast food business like McDonalds, the reason why is
because they have received criticisms about the adverse health effects of many of the business
products. Therefore, McDonalds have the opportunity to be able to increase the healthfulness of it’s
menu items.
1
,Technological - McDonald’s has recently upgraded their menus with flashy television screens
hanging from the ceiling behind their cashiers. They also use their website to showcase nutritional
information and other accessories such as careers and where they are located. In some locations,
you can order your food online, allowing you to stroll in and grab your meal without waiting in line.
McDonalds have the opportunity to be able to increase their research and development investments
to improve the business effectiveness and efficiency. McDonalds can also apply more automation to
maximize productivity, such automation requires changes in McDonald’s operations management
and productivity approaches. Furthermore, McDonalds can also improve its mobile services to eb
able to reach more customers such as its mobile apps.
Legal – The legal factors for McDonalds is that increasing the health regulations in workplaces and
schools means that there has to be frequent health and safety checks being made majority of the
time. Animal Welfare regulations are classified as a threat and also an opportunity for McDonalds.
The reason why it can be a threat is because these regulations will increase the costs in McDonalds
supply chain. The reason why it creates an opportunity is because it can improve the business by
implementing a more comprehensive animal welfare policy which therefore attracts more
customers who are interested in Animal Welfare.
Environmental – The Environmental factors that McDonalds have mainly focused on sustainability,
environmentally friendly and sustainable supply chains. It is not only just McDonalds but also large
brands as well as they all have a well-developed CSR Policy to handle their environment concerns.
For an example McDonalds have been using harmful resources such as non-biodegradable
substances for their drink’s glasses, along with Styrofoam containers are also being used in
McDonalds for their food. McDonalds corporation can improve it’s environmental programs and
sustainability to strengthen their brand and also business performance. The aim of these endeavours
is to address the opportunities associated with the rising interest for corporate environmental
programs as well as the increasing emphasis on sustainable business practices.
http://panmore.com/mcdonalds-pestel-pestle-analysis-recommendations
How Knowledge of the External Environment can support the success of McDonalds
The way the external environment support business is because it is cost effective as well as providing
a more deeper understanding of the business, being very alerted to potential threats along with
being reliable method to exploit opportunities.
With McDonalds having upgraded their menus by displaying them on large television screens form
the ceiling behind the cashiers, the reason why they did this is because they want to make their
stores more modernised by having the latest technology available on them as therefore the process
is very quick and easy such as paying contactless.
With very busy lifestyles due to people having work in more urban places this means there will be
more people likely coming to the store to buy food and drinks which will lead to McDonalds making
their sales and revenue and being able to satisfy customers and this will lead to McDonalds having a
good reputation and a strong brand which will lead to them being a successful business.
McDonalds have mainly focused on sustainability, environmentally friendly and sustainable supply
chains, the reason why they are focusing on these aspects is because they want to make sure the
lifestyle is better for the environment by making sure that any type of pollution isn’t caused.
2
, Internal Environment
Corporate Culture refers to the beliefs and their behaviours that will define how a business
employees and the management interacts and handle businesses transactions. The Corporate Social
Responsibility is a business model that helps a business be socially accountable to itself and their
stakeholders.
Internal Environment for McDonalds
What is their corporate culture?
McDonald’s organizational culture emphasizes human resource development and efficiency. It
supports business growth and success in the international fast food restaurant market. This
organizational culture has the following characteristics, arranged according to McDonald’s
prioritization:
1. People-centricity
2. Individual learning
3. Organizational learning
4. Diversity and inclusion
What CSR do they undertake?
They support sustainable beef production by collaborating to develop global principles and
criteria, and committing to begin purchasing a portion of beef from verified sustainable
sources in 2016
Sourcing 100 percent of coffee, palm oil and fish that is verified to support sustainable
production
Procuring 100 percent of fiber-based packaging from certified or recycled sources
Serving 100 percent more fruit, vegetables, low-fat dairy or whole grains in nine of its top
markets
Increasing in-restaurant recycling to 50 percent and minimizing waste in nine of its top
markets
Increasing energy efficiency in company-owned restaurants by 20 percent in seven of its top
markets
What are the benefits and drawbacks of CSR to businesses, customers, employees and local
residents?
The benefits of the CSR is that there is organizational growth in the business along with customers
being more willing to buy products from a business that undertakes and follows the CSR which
therefore builds a reputation which therefore means that customers will like going to your business
which leads to making revenue by the business doing their normal day to day operations in meeting
the customer needs whether it is by providing services or products. Another benefit of the CSR is
that businesses can save the costs on certain things by reducing resources use, waste and emissions,
therefore you can help the environment and also save money too. Another benefit of the CSR is that
potential investors are more likely to back a reputable business or global business.
The drawbacks of the CSR is that it isn’t cheap as it is very expensive to set up. Another drawback of
CSR is that consumers are very well known to greenwashing. When a business applies a Corporate
3
In this assignment I will be researching and investigating what business markets are and what the
business environments are as well. I will do this by using a business as an example.
External Environment
The External Environment are all of the possible factors that will affect the business externally. These
factors are made of Political, Economic, Social, Technological, legal and Environmental. The Political
Factors relates to having government support, the Economic factor relates to economic growth and
exchange rates, the social factor relates to how people spend their money on due to trends, the
technological factors relates to the latest technology being available which means there will be
improved communications, the legal factors relates to all sorts of business legislation and
government departments and the environmental factors relates to the way the environment will be
affected such as carbon emissions, pollution, waste and also recycling.
PESTLE Analysis - McDonalds
Political - They must respond to political laws and influences in over a hundred countries. Like any
other restaurant, they must comply with health and hygiene regulations. If their food doesn’t abide
by a certain code, they would be shut down. Their employees must also adhere to all food and
health laws while working in any given location. McDonalds have the opportunity to be able to
expand it’s business because of improved international trade and this will enhance global supply
chains. The governmental guidelines for diet and health can be a threat but also an opportunity for
McDonalds. The reason why it can be a threat is because it puts a lot of pressure on McDonalds as
they have been criticized in terms of the effects of their products on customer’s health. The reason
why it can become an opportunity is because they can then try to improve the products so that it is
suitable for customers.
Economic - In 2008, McDonald’s took a financial hit from the economic recession. Disposable income
was at an all-time low while people scrambled to find new jobs. Since then, McDonald’s brand image
has taken a hit due to an increase in health consciousness among consumers. Many fast food
restaurants are adding healthy options to their menu while trying to shed their “junk food” image.
But it’s hard — and expensive — to change the opinions of the public. The slow however stable
economic growth of developed countries is an opportunity for McDonalds to be able to grow and
increase the stability of their restaurant chain business. The business has the opportunity to be able
to grow through expansion in high growth developing markets such as Asia.
Social - Consumers obsessively scrutinize what they’re putting into their bodies. There is a rise in
low-carb and low-sugar diets. With busy lifestyles in more urban places means there will be more
people likely coming to the store to buy food and drinks. McDonalds have the opportunity to be able
to grow based on the increasing demand of customers to buy fast food rather than cooking at home.
This tendency is also linked to busy lifestyles in urban environments. These types of lifestyles will
increase customers likelihood of dining in restaurants such as McDonalds rather than be cooking at
home. McDonalds has the opportunity to increase their flexibility in product design to be able to
satisfy the customers preferences in different markets around the world. However, the healthy
lifestyle trend can be a huge threat for a fast food business like McDonalds, the reason why is
because they have received criticisms about the adverse health effects of many of the business
products. Therefore, McDonalds have the opportunity to be able to increase the healthfulness of it’s
menu items.
1
,Technological - McDonald’s has recently upgraded their menus with flashy television screens
hanging from the ceiling behind their cashiers. They also use their website to showcase nutritional
information and other accessories such as careers and where they are located. In some locations,
you can order your food online, allowing you to stroll in and grab your meal without waiting in line.
McDonalds have the opportunity to be able to increase their research and development investments
to improve the business effectiveness and efficiency. McDonalds can also apply more automation to
maximize productivity, such automation requires changes in McDonald’s operations management
and productivity approaches. Furthermore, McDonalds can also improve its mobile services to eb
able to reach more customers such as its mobile apps.
Legal – The legal factors for McDonalds is that increasing the health regulations in workplaces and
schools means that there has to be frequent health and safety checks being made majority of the
time. Animal Welfare regulations are classified as a threat and also an opportunity for McDonalds.
The reason why it can be a threat is because these regulations will increase the costs in McDonalds
supply chain. The reason why it creates an opportunity is because it can improve the business by
implementing a more comprehensive animal welfare policy which therefore attracts more
customers who are interested in Animal Welfare.
Environmental – The Environmental factors that McDonalds have mainly focused on sustainability,
environmentally friendly and sustainable supply chains. It is not only just McDonalds but also large
brands as well as they all have a well-developed CSR Policy to handle their environment concerns.
For an example McDonalds have been using harmful resources such as non-biodegradable
substances for their drink’s glasses, along with Styrofoam containers are also being used in
McDonalds for their food. McDonalds corporation can improve it’s environmental programs and
sustainability to strengthen their brand and also business performance. The aim of these endeavours
is to address the opportunities associated with the rising interest for corporate environmental
programs as well as the increasing emphasis on sustainable business practices.
http://panmore.com/mcdonalds-pestel-pestle-analysis-recommendations
How Knowledge of the External Environment can support the success of McDonalds
The way the external environment support business is because it is cost effective as well as providing
a more deeper understanding of the business, being very alerted to potential threats along with
being reliable method to exploit opportunities.
With McDonalds having upgraded their menus by displaying them on large television screens form
the ceiling behind the cashiers, the reason why they did this is because they want to make their
stores more modernised by having the latest technology available on them as therefore the process
is very quick and easy such as paying contactless.
With very busy lifestyles due to people having work in more urban places this means there will be
more people likely coming to the store to buy food and drinks which will lead to McDonalds making
their sales and revenue and being able to satisfy customers and this will lead to McDonalds having a
good reputation and a strong brand which will lead to them being a successful business.
McDonalds have mainly focused on sustainability, environmentally friendly and sustainable supply
chains, the reason why they are focusing on these aspects is because they want to make sure the
lifestyle is better for the environment by making sure that any type of pollution isn’t caused.
2
, Internal Environment
Corporate Culture refers to the beliefs and their behaviours that will define how a business
employees and the management interacts and handle businesses transactions. The Corporate Social
Responsibility is a business model that helps a business be socially accountable to itself and their
stakeholders.
Internal Environment for McDonalds
What is their corporate culture?
McDonald’s organizational culture emphasizes human resource development and efficiency. It
supports business growth and success in the international fast food restaurant market. This
organizational culture has the following characteristics, arranged according to McDonald’s
prioritization:
1. People-centricity
2. Individual learning
3. Organizational learning
4. Diversity and inclusion
What CSR do they undertake?
They support sustainable beef production by collaborating to develop global principles and
criteria, and committing to begin purchasing a portion of beef from verified sustainable
sources in 2016
Sourcing 100 percent of coffee, palm oil and fish that is verified to support sustainable
production
Procuring 100 percent of fiber-based packaging from certified or recycled sources
Serving 100 percent more fruit, vegetables, low-fat dairy or whole grains in nine of its top
markets
Increasing in-restaurant recycling to 50 percent and minimizing waste in nine of its top
markets
Increasing energy efficiency in company-owned restaurants by 20 percent in seven of its top
markets
What are the benefits and drawbacks of CSR to businesses, customers, employees and local
residents?
The benefits of the CSR is that there is organizational growth in the business along with customers
being more willing to buy products from a business that undertakes and follows the CSR which
therefore builds a reputation which therefore means that customers will like going to your business
which leads to making revenue by the business doing their normal day to day operations in meeting
the customer needs whether it is by providing services or products. Another benefit of the CSR is
that businesses can save the costs on certain things by reducing resources use, waste and emissions,
therefore you can help the environment and also save money too. Another benefit of the CSR is that
potential investors are more likely to back a reputable business or global business.
The drawbacks of the CSR is that it isn’t cheap as it is very expensive to set up. Another drawback of
CSR is that consumers are very well known to greenwashing. When a business applies a Corporate
3
