McDonald's Case Study Example | Topics and Well Written Essays - 1500 words

McDonald's - Case Study Example McDonald has shown great business acumen, flexibility and commitment to these values to stand solid and gain competitive advantage through creating differential advantages in every segment. Political factors: government policy can have impact on the economy and business. By imposing higher tax on fast food industry government can influence the business and its profitability in a country where the business is situated. Government can fix up minimum wages or bonus for workers in chin stores that can inflate the wage bills of a fast food chain like McDonald. Economic factors: interest rates, taxation changes, economic growth, inflation and exchange rates ruling in the country of operation always affect the business. Many governments consider fast food stores as luxurious segment of business and impose higher taxes. Higher interest rates often deter investment because of higher costs for borrowing funds. Inflation keeps the fast food prices higher and deters youths the target customers to eat in McDonalds. Social factors: Changes in social trends can have impact on the demand for a McDonald's products. Workers may not be sufficiently available or not willing to work for the prescribed wage and benefit structure. The aging population in UK and Japan have made the labour cost higher. Young Turks who visit fast food chains more frequently prefer young faces to serve. Older workers claim longer and higher pension. Technological factors: new technologies create new products and new processes that can reduce costs, improve quality and lead to innovation. These new developments always benefit consumers as well as the organisations providing the products. McDonald can afford introducing these newer technologies better and provide benefits to its consumers. Environmental factors: The growing desire to protect the environment is having an impact on many industries and fast food is one of those. Government imposes many rules in order to protect environment. Environmentalists always campaign and raise issues on this external factor that is gaining importance everyday. Legal factors: legal environment in which firms operate is very vital. Significant legal changes in UK have affected McDonald. For example an increase in the minimum wage and greater requirements for firms to recycle. Legal changes usually affect a firm's costs. The planning and prosperity of a venture abroad is guaranteed only when the macro environment of the country where the business is operating is congenial enough to promote the business. For example the political system of the country is smooth enough to let the investment fructify and provide appreciable returns. The nature of government whether democratic or communist or military or dictatorship is a determinant factor. The political scenario, its local government, labour profile, leadership, media industry profile and general populace are important considerations. The social and cultural system of the country should also enable the local populace to accept the product for consumption. Global expansion made Mc Donald giant and truly multinational but had had to face many controversial issues on health,