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Environmental factors affecting McDonald's management functions

Executive summary

The purpose of this paper is to discuss environmental factors affecting upon McDonald's management functions. And current strategy the company currently using to tackle these environmental impact. This will be achieved by exploring how McDonald's tackle with all of the external and internal environmental factors. There are mainly three factors that were selected to outline the achievement of McDonald's corporation.



There are many different values to the dollar around the world, many issues that have occurred in many of those regions/websites, and about 120 countries served by McDonald's that rely on the functions of management to succeed.


Itroduction:

McDonald's the biggest fast food restaurant in the word established in 1955 in Illinois USA, more than 30,000+ restaurants located in 120 countries worldwide, serving more than 54 million customers per day. In December 2005 Mcdonald's reached a record high of avenue of more than US$21 billion worl wide. With 390,000+ employees, McDonald's now is the largest over the counter food service restaurant in the world. The corporation functions mostly by means of franchisees. McDonalds is one of the many corporations that have successfully used a combination of various marketing strategies to be a globally successful organisation.


Product Line:

McDonalds operates in 3 major categories of food items/ product lines:


The major product line is of the Snack foods division while Desserts and beverages are relatively more secondary in nature.


Snack Foods:

Snack Foods segment can be segmented into categories on various bases, like vegetarian and non vegeterian.


Desserts:

Desserts offered are Ice Creams and Pies. Variable for division are based on Price and Consumer preference and taste. Most low price item is Soft Serve Ice Cream cones. In medium price range many types of ice creams and varieties of pies.


Beverages:

Three types of beverages are offered namely, Soft drinks, Coffee and tea. Variable for division are based on consumer preference and taste.


Environmental factors got important effects on company's global business platform. As areas like political, social, economical, environmental and economical are sensitive and critical that's way, those must be addressed appropriately for company's success. On the other hand strategy is really important for company because it's a direction and scope of company over the long time.


The environmental factors which are under macro and micro environment, directly or indirectly impacting McDonalds. Currently McDonalds is using lots of strategy which got positive and negative effects on company. MacDonald's should keep the effective and successful strategy and modify or redesign the failure strategy.


This report uses SWOT and Pestle analysis to evaluate the current strategy for McDonalds and outline some strategy that McDonald's currently using.


Discussion of the environmental factors impacting McDonalds, placing emphasis on the key drivers:


As McDonalds is a global company and running businesses most of the countries in the world that's way, this company faces lots of challenges and issues. There is a relation between key drivers and environmental factors because the key drivers for change are environmental factors who have got a high impact on the success or failure of strategy.


a. Customers:

Customers are a major environmental factor for McDonalds. Every day nearly 54 billion customers served by McDonalds. Though McDonald's customers are mainly young generation. That's way, company always conscious about their choice. For this reason, customers demand, their choice, their liking, everything is impacting McDonalds.


b. Product or service:

McDonalds producing their product and they are serving those directly to customers. That's way the factor of product and service is impacting McDonalds. Product quality, product variety, quick and friendly service, every things are important for company. Those got an important impact on McDonalds.


c. Competitor:

McDonald's main competitors are Wendy's, Burger king and Hardees. McDonalds always needed to treat competitors carefully. That's way the factor related with competitor like competitors product quality, service, price competition, market, sales, growth everything impacting McDonalds.


d. Employees:

More than 390,000 employees working in McDonalds. Employees are impacting McDonalds because company is recruiting, training staff for company. And at the same time wages also related with this. It is not uncommon for McDonalds to be the employer of first resort for young people just entering the workforce, older workers desiring extra income, or for those planning on transferring from one corporation to another. So, employee is impacting McDonalds in this way.


e. Technology:

McDonalds is producing their main product that means burger ,salads in their own kitchen, they are cooking all fries ,nuggets and meat patties in their own grill .So, the use of equipment, special control devices, temperature regulators, point-of-sales systems, inventory upkeep, financial information and communications are all linked to different technologies. In this way technology is impacting McDonalds.


f. Political factor:

Different political decision, rules, motives are impacting McDonalds. Different countries might have different political view; they could take different decision about food Company. Specially laws, because government makes laws and this law might be changed at the same time of government changing.


g. Economy:

Economy is important factor which is impacting McDonalds. Company always need to thing about profitability, growth, to expand of company. So, they need to consider countries demand, supply, production, distribution, exchange rate, business cycles, and differential economic growth rates around the world.


h. Environmental factors:

McDonald's is growing day by day by increasing the number of restaurant. The main source of ingredient and packaging is nature. McDonald's has a Rain Forest Policy, which declares its commitment to beef purchasing practices that do not contribute to tropical de-forestation. Everyday McDonalds using a huge amount of napkins, carryout bag, tray lines, clamshells. Oil and water is other major ingredient using in McDonalds. . The continuous and enormous use of natural resources can disturb the balance in the ecosystem. In Europe, McDonald's has been recycling vegetable grease by converting it to fuel for their diesel trucks Now, every body are conscious about environment. So, McDonalds need to careful about environment that, what McDonalds are doing that's environmental friendly.


i. Culture and religion:

McDonalds is doing business worldwide. So, different regions customers got different culture and religion. McDonalds need to think about, cultural and religion rules and tradition. For example, in India, the non-vegetarian menu includes chicken and fish items only. Beef is not on the menu in India because are considered sacred. Like that, in Muslim McDonald's introduced halal meat for burger.


j. Globalization:

As, McDonalds is an international worlwide restaurant company that's why, globalization is effecting McDonalds corporate strategy. McDonalds is trying to expand its business in global market i.e like China. That's why before moving into global market McDonalds need to consider about the region, culture and religion of customers. More over McDonalds need to think food habit and chose of customer of new regions. And the same time regions government rules, law, economy, politics economy, everything is impacting McDonalds to build their business.


k. Law:

Different country got own law which is impacting McDonald's. Health and safety has a distinct impact on the functioning of chains in different countries. For example, all restaurants in the Muslim region are halal-approved, meaning food is prepared and handled according to the tenets of Islamic law.


l. Share holders:

Share holders impacting McDonalds because they invest money on that. That's way, if MacDonald's do good business and if its prospect is good, then price of share will increase and there is a possibility of getting more dividend for shareholder. On the other hand if company needs more money for invest then McDonalds will issue more share in market.


Critical evaluation of current strategies in use:

SO strategies:


WO Strategies:


ST Strategies:


WT Strategies:


Conclusion:

Though, still McDonald's is the largest over the counter quick service food restaurant in the world. After that McDonald's should consider the environmental factors which impacting company. And the strategies which company is using now, those have positive and negative effect on business. The management of McDonald's have to continuously keep an eye on the umbrella activities of the organization, by evaluating what works and what don't to create the organization strategies. In order to implement the strategies effectively and successfully, the upper level management should create a safe environment for reassure, support, changes, and commitment of the organization. It is then recommended that McDonald must make sure that all the strategies are well planned and implemented carefully beforehand, because these changes and strategies will be the deciding for the success or failure of any organization.


References:

Gerry, kevan, Richard, Exploring Corporate Strategy .8th Edition,London prentice Hall.


Adrian haberberg & Alison Rieple, Strategic management ,theory and application, Oxford,Online Resource centre.


http://www.environment.mcdonalds.ch/EN/EnvironmentStrategyAnd Objectives/EnvironmentalStrategy.htm


Bateman, T.S., & Snell, S.A., (2004). Management: The New Competitive Landscape (6th ed). New York, NY: McGraw-Hill Company.


McDonald's, (2005). Retrieved October 9, 2005, from McDonald's website: http://www.mcdonlads.com/corp/values/diversity/supplierdiversity/commitment.html


McDonald's USA corporate responsibility report: 2004. (2004). Retrieved October 9, 2005, from http://www.mcdonalds.com/usa/good/report.RowPar.0002.ContentPar.0002.ColumnPar.0001.File.tmp/USA%20Report%20Layout%20(No%20Back%20Cover)%20(12-1-04).pdf


Robinson, W. I. (2005). Global capitalism: the new transnationalism and the folly of conventional thinking. Science & Society, 69(3), 316. Retrieved October 10, 2005, from ProQuest database.


Sustar, B. & Sustar. R. (2005). Managing marketing standardization in a global context. Journal of American Academy of Business: Cambridge, 7(1), 302. Retrieved October 10, 2005, from ProQuest database.


Welcome to McDonald's India. Retrieved October 10, 2005, from http://www.mcdonaldsindia.com/ourfood/nonveg/index.html


www.mcdonalds.com, People, 2005


www.mcdonalds.com, Environment, 2005


www.rmhc.com, Ronald McDonald House Charities, 2005


McDonalds.com Web site (2005). Corporate Profile. Retrieved Oct 17, 2005, at [4]http://www.mcdonalds.com/corp/invest/pub/2005_fact_sheet.html
Project Implementation at McDonalds


Gerlin, Andrea (September 1, 1994) McDonalds Lawsuit. Retrieved November 17, 2005, from [2]www.vanfirm.com/mcdonalds-coffee-lawsuit.html.
Private Practice Lawyers


McDonald's Revitalization Plan\0012005. Retrieved from [5]http://www.mcdonalds.com/corp/invest/pub/revitalization.html, on Oct 17, 2005
Project Implementation at McDonalds


"McDonald's Press Releases." (September 8, 2004). Retrieved on September 30, 2004 at http://www.mcdonalds.com/corp/news/fnpr/fpr_09082004.html
Sealwrap


Official web site of McDonald's-Canada: http://www.mcdonalds.ca/en/food/lighter.aspx

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