The Environmental Factor Impacting On Mcdonalds Commerce Essay

The surroundingsal Factor Imp acting On Mcdonalds Commerce EssayMcDonalds fri exterminateship is the grounds leading food service organization. The company started out as a sm either drive- with in 1948 by two brothers, Dick and Mac McDonald. Raymond Albert Kroc, a salesman, saw a great probability in this commercialise and certain Dick and Mac to expand their operation and open new restaurants. In 1961 Kroc bought out the McDonald brothers. By 1967 McDonalds expanded its operations to countries outside the U.S.A. This unyielding magnification led the Corporation to open 23,000 McDonalds restaurants in 110 countries in 1994, producing $3.4 bn in annual revenues. In addition, McDonalds opens a new restaurant every triple hours. Also, McDonalds has twice the trade sh atomic number 18 of its closest U.S. competitor, Burger King, representing 7% of total U.S. eating-out sales. in like manner, McDonalds serves or so 1% of the worlds population on any assumption day by its 2 3,000 restaurants internation all toldy. Big Mac, the worlds most sold ground beef was developed by Jim Delligutti in 1967 to feed construction workers. Big Mac is the biggest attraction and backb unitary of the corporation. Moreover, McDonalds maintains its competitory advantage by unceasingly creating new items to add onto its menu. This shows us that McDonalds practices an analyser type of scheme, introducing new items and defending its existing ones.McDonalds Corporation (NYSEMCD) is the worlds largest chain of burger fast food restaurants, serving nearly 47 m giddyion customers daily. At one time it was the largest global restaurant chain, scarcely it has since been surpassed by multi-brand doer Yum Brands (KFC, Taco Bell and others) and sandwich chain Subway.In addition to its touch sensation restaurant chain, McDonalds Corporation held a minority interest in Pret A Manger until 2008, and owned the Chipotle Mexi drop Grill until 2006 and the restaurant chain capital of Massach occasiontts Market until 2007. The company has in any case expanded the McDonalds menu in fresh decades to include alternative meal options, much(prenominal) as salads and snack wraps, in order to capitalize on growing consumer interest in wellness and wellness.A McDonalds restaurant is run shortd by either a franchisee, an affiliate, or the corporation itself. The corporations revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonalds revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in run income to $3.9 billion.McDonalds primarily sells hamburgers, cheeseburgers, grumbler merchandises, French fries, breakfast items, soft drinks, milkshakes, and desserts. In response to obesity trends in occidental nations and in the face of criticism over the healthiness of its products, the company has limited its menu to include such healthier alternatives as salads, wr aps and fruit.McDonalds MISSION AND peckThey serve mountain with obedient timber food, fast and at humbled greet. McDonalds vision is to dominate the global food-service industry. Global dominance fashion, setting the action standard for customer satisfaction and increases commercialize sh be and profitability through successfully implementing our convenience, value and execution strategies.McDonalds brand mission is to be our customers p fixent place and way to eat. Our intercontinental operations pass on been aligned slightly a global strategy called the Plan to Win centering on the five basics of an exceptional customer experience People, Products, Place, Price and Promotion. We ar committed to improving our operations and enhancing our customers experience.Main Body Analysisenvironmental Factor Impacting upon MacDonaldsThe squeeze of milieual work outs is far-reaching upon the Macdonalds which is universe discussed below followed by milieual gene.Environme ntal FactorThe nonion of surround in general systems thinking is a wild, all-embracing and woolly concept. Everything is in the environment. The environment is all all the same we be interested in specifics. It is masses who decide what is signifi backsidet in the environment and what is not what the forces ar that must (imperative language) be attended to. and then prevailing pictures of what the environment is ar socially constructed. Various definitions and concerns assume the characteristics of propaganda. They ar not necessarily neutral definitions and the nature of the elements that supposedly argon acting on us in the environment, argon difficult to define and measure.Similarly environmental events earn hold to be interpreted and we will often refer to environmental forces of various kinds in our post hoc rational and justification of the decisions we have got make. We blame the environment for action we have taken and the results of that action.Finally people e.g. government and powerful decision-makers in business organizations, may intervene to bend and shape events in the environment to their own advantage e.g. speak to the press, mansion house for a change, buy up a rival, try to tickle the equities merchandise up and even cooperate with others to mark off that information on the environment is accurate rather than uninformed and misguiding decisions by others than back end affect the companys mark (vested interests). John Childs concept of strategic choice, and its manifestation in terms of managerial behavior, is significant in this regard.So environment is not what it may seem. sure if we here the green lobby speak about environment, they will induce particular values and positions dear to their hearts, some of which others cogency accept but some of which others might to a fault rebut.However a typical, neutral and managerial description of environmental factors and pressures would cover the following atomic number 18 as (and more). Environmental factors include social-cultural, technological, economic and financial and governmental-legal events and possibilities. These atomic number 18 often referred to by the mnemonicsS.T.E.P. (social, technical, economic and political factors) also PEST orS.T.E.E.P.L.E (social/demographic, technical, economic, environmental (natural), political, legal and ethical factors)The biological and adjustive metaphor comes into play when we argue for business change. Typically, if the business cannot respond to the pressures and influences of its environment then it may not survive. It has to adapt. If it serves the expects of clients or stakeholders and satisfies for example its market mission then it may prosper. A dominant theme in the study of business is that of tilt in the market-place.A businesss relationship with its environment is typically founded on its service to detect customers and their satisfaction with its performance revealed by buying patterns , new legislation, party conferences, annual general meetings and stock market prices. Learning and adaptation occurs in response to stimulus across organisational boundaries. Any organization that is too inward looking bring into beings atrophied and can stagnate. In the language of general systems theory any system is stem to the process of entropy.Environmental factors can be political, social, ecological, cultural, technological and ethical in nature. Any organization that develops a product or service that they neediness to market domestically or globally must consider what the impact each of these factors may have for them. Not considering these factors can result in the failed attempt to market a product, which may be successful domestically, in other countries where at that place is a significant market potential.Impacting upon MacDonaldsMainly in that respect are 2 types of factors affecting inter home(a) business like MacDonalds.1) subjective factors2) External factor s.1) inborn factors-Internal factors of international business include political parties, suppliers, buyers, competitors and consumer of respective(prenominal) country.2) External factors External factors of international business are those where you need to examine the whole criteria these are political environment, legal environment, socio-cultural environment, demographic conditions of respective country.Figure Environmental FactorAnalysis the environmental factors impacting upon MacDonaldsTo have a clear picture of McDonalds corporation we need to look at its assess Environment, which includes its .Customers .Competitors .Strategic associate .Suppliers .RegulatorsCUSTOMERSCustomers are those who pay money to acquire an organizations considerablys or services. For umpteen a(prenominal) years McDonalds mostly tar carryed the young people, however this has changed in this decade McDonalds has off towards a more general market. By doing this McDonalds concentrates on the famil y, tar circumventing a assorted market which includes consumers ranging from children to elderly people, using products such as the happy meal for children and Egg McMuffin for the elderly. McDonalds also veridicalized the changing world we live in and the need for healthier food, since there is an ever changing demographic group, who pick out fast, top quality food that is low in calories. McDonalds responded to this opportunity and introduced a new and mod product. This new product was a regular hamburger that tasted like the real thing but was made of plant stuff like Soya beans. This same product also targets some other(prenominal) demographic group, vegetarians. McDonalds mostly uses psychographic segmentation targeting the functional and middle classes. These are the people that are more susceptible to enter a fast food restaurant, since these are the people that lead a fast moving life and therefore require a fast meal. In brief McDonalds customers are of all classes , but largely working and middle classes, and people of all ages.COMPETITORSA competitor is an organization that contests with other organizations for imaginations. In our findings, McDonalds has two types of competitors in the Lebanese marketIn learn CompetitorsIndirect refers to regulars producing one or two products that contest with McDonalds products and therefore be a threat to the company. We have identified quatern corroborative competitors hydrogen J. Beans, T.G.I. Friday, K. F. C. and Popeyes. Henry J. Beans offers hamburgers and fries on its menu, therefore competing with McDonalds for customers of these products. However, Henry J. Beans also known as Hanks is a more of a bar restaurant and therefore a hang out place, as a result charging more money for its products. Hanks targets middle to focal ratio class customers, so where most of these customers overlap are in the middle class. T.G.I Friday is some other indirect competitor reflecting the same characteristi cs as Henry J. Beans. Other indirect competitors are K. F. C. and Popeyes, both competing for the chicken nuggets and fries customers. In brief, Hanks and T.G.I. Fridays competes with McDonalds by offering hamburgers and fries, whereas K. F. C. and Popeyes compete with McDonalds by offering chicken nuggets and fries.Direct CompetitorsDirect competitors refer to planetary houses producing the same products or services as McDonalds does. Here we found that McDonalds has three direct competitors Burger King, Wendys and Hardees. McDonalds closest rival is Burger King, which operates a total of 9644 restaurants in 110 countries. Wendys is McDonalds s largest rival, which is also in the fast food business, where Wendys operates 6776 restaurants in 32 countries. Hardees, McDonalds triplet largest rival is also in the fast food business and is the notwithstanding direct competitor apart from Juicy Burger in the Lebanese market. Hardees operates 3080 restaurants in 20 countries. As we ha ve illustrated McDonalds faces stiff competition from three major(ip) competitors, Burger King, Wendys and Hardees.SuppliersSuppliers are an organization that provides resources for other organizations. McDonalds has practiced a backward vertical integration, by replacing most of its suppliers. It has done so for two reasons, 1) To geld costs, and 2) To ensure that its products are of top quality. These supplies include beef and milk to be utilize in its products, which it gets from its farms. Other suppliers include topical anaesthetic grocery stores that preparation McDonalds with fresh vegetables. Soft drinks are supplied exclusively by Coca-Cola, which is also its ally. McDonalds supplies also include raw real such as flour, sugar, yeast, etc.,.Strategic AlliesA strategic ally is an organization working together with one or more other organizations is a joint venture or a similar arrangement. McDonalds has formed a strategic alliance with Walmart, Chevron, Amoco, Disney an d Coca-Cola. Walmart, which is a large shopping mall chain in the U..S. and several adjoining countries, is allied with McDonalds, which offers great opportunities for both companies. McDonalds has restaurants in each Walmart, offering its customers conveniences and excellent fast food at a low cost ease of accessibility. McDonalds corporation describes it best in this scenario Imagine a work shopping day at your local Walmart and having the ability to sit rectify with the kids and enjoy many of our McDonalds favorites, like Big Mac sandwiches, world famed fries and kids favorite Happy Meal. McDonalds understands your busy lifestyles and the demands on your time. Thats why we are making it easier for you to do more things in less time. McDonalds is engaged in an alliance with two petrol companies, Chevron and Amoco. This alliance represents the ultimate in convenience. At these locations, one finds a full-menu McDonalds restaurant with dining room service. zero point can be mo re convenient, because one can fill up the car with gas and get a meal all in one stop. Another important alliance that McDonalds has is with Disney. Here McDonalds has the sole effective to sell fast food in Disneys theme parks approximately the U.S., and other Disney operations in the world. Under the terms of the agreement, McDonalds will operate restaurants and Disney will promote its films through McDonalds.RegulatorsRegulators are groups or governmental agencies that can control and influence the organizations policies and practices. An example is Lebanon a few years past when the U..S. government banned all U..S. citizens and organizations to come or operate in Lebanon. Another good example would be the embargo imposed on Iran where U..S. organizations were banned to operate in this country. Another group of regulators called interest groups can and have influenced McDonalds to treat its animals (cow and chickens) in a much more tender-hearted manner, which resulted in th e restructuring of McDonalds farms throughout its operations near the world. The summary of the task environment which is by definition a specific organizations or groups that affect the organization, which includes competitors, suppliers, customers, strategic allies and regulators. Here we described the task environments importance to McDonalds, where McDonalds faces both opportunities and has threats in its environment.Emphasis on the key driver of MacDonaldsWe shall also explore McDonalds manpower Diversity and its Total spirit Management to emphasis on the key drivers. These are given belowWorkforce DiversityDiversity exists in a group or organization when its members differ from one another a eagle-eyed one or more important dimensions such as age, gender, and ethnicity. Diversity is very important for McDonalds. Here millions of teens start out by working at McDonalds. Here some of the teenagers move on to get various bank lines such as movie stars, skilled workers, famous athletes, worry positions and other educated positions in society. At McDonalds two thirds of middle and upper focussing started out as crewmembers in a McDonalds restaurant. There are opportunities for everybody in McDonalds from teenagers to elderly workers, and from people just entering or reentering the job market. Moreover, McDonalds offers special jobs for people who have disabilities, such as people who are in wheel chairs and those who must use crutches permanently. Furthermore, McDonalds offers their workers flexible working hours. For example, hours for people set abouting just a few hours of work per week and those who seek full time positions. The work force at McDonalds also have some say in their working hours, such as if they cull the morning, mid-day, or evening shifts in the restaurant. So, McDonalds uses kind to create a good atmosphere in their work places among workers and management. Here they offer work to all kinds of people without diversity and the wo rkers have flexible hours that provides customer satisfaction.Top Quality ManagementQuality is the entirety of features and distinctiveness of a product or service that stand on its ability to satisfy stated or implied needs. For McDonalds, total quality management (TQM) involves that the employees are at work on time, are neatly dressed, and are clean. The employees must make sure that the customers constantly receive safe food, which implies that the employees must wash their hands often to stick clean. Moreover, the employees must follow certain Standard Operational Procedures, so the customers ever so receive exceptional quality and service. This includes the employees using plastic gloves when they prepare the food, that the shopping centre and fries are properly fried, and that the vegetables are thoroughly washed when used in the food. Another TQM is that the employees rely on teamwork and high energy to get the job done, so that the customers do not have to wait long for their food. Furthermore, McDonalds management emphasizes that their restaurants should be clean. This involves that the restaurants are tidy, sparkling and spotlessly clean. As McDonalds illustrates the quality is that the employees delivers fast, accurate and friendly service with a smile.External and Internal Factors bear upon McDonalds The affair of this paper is to discuss international and subjective factors affecting McDonalds management functions. This will be accomplished by explaining how McDonalds deals with each of the foreign and internal factors. There were three factors that were chosen to outline the success of McDonalds corporation. The first factor is globalization, which is define as closer contact between different part of the world, with change magnitude possibilities of personal exchange, mutual understanding and friendship between world citizens. Diversity, the difference among people and cultures, is the second factor discussed in the paper. The final factor is ethics, which can be defined as a set of principles of remunerate conduct. This paper explains how the McDonald Corporations uses the factors to conduct business around the world.In todays society, corporations and enterprises are expanding their businesses in the global markets. Globalization is incumbent for success and survival in the worldwide market however, global competition is not easy (Bateman Scott, 2004). By the end of the twentieth century, the incline of Fortune 500 companies was no longer and United States corporations due to an increase in international companies joining the list (Global Capitalism, 2005). As a leading food service retailer, McDonalds joins those corporations with restaurants in 119 countries (McDonalds, 2004). serious strategic decisions are a key factor to their success with precondition for both internal and external factors. When considering the foreign market, companies need to consider there are risks. There must be local selli ng to apostrophize to the local consumers and also to build relationships and trust (Bateman Scott, 2004). Therefore, the strategic planning for marketing has to be effective. McDonalds caters its menu in other countries to the cultures of the regions. For example, in India, the non-vegetarian menu includes chicken and fish items only (Welcome, n.d.). Beef is not on the menu in India because are considered sacred. Global marketing decisions are no different than those made domestically but the decisions are unique to each country (Sister Sister, 2005). Furthermore, operating on a global scale allows a companys employees to experience working in different cultural environments. This is a good marketing strategy for recruiting employees. McDonalds has a global core curriculum for its restaurant management (McDonalds, 2004). Paula Doherty, a general manager states, Ive had incredible experience in different countries andculturesas a trainee manager from Poland to Israel to the Phil ippines and more. Doing the job successfully has given me a real sense of achievement This business strategy speaks to their commitment to a divers(prenominal) workforce.McDonalds commitment to diversity is established on the foundational belief that diversity is not just a moral and ethical issue, but also a business issue (McDonalds, 2005). Due to the global expanse of McDonalds business, diversity has become an integral part of the internal company culture. McDonalds has over 30,000 restaurants around the world, which means franchise owner/operators, employees, and customers represent just about every culture, theology or ethnicity on earth. In addition, McDonalds promotes the use of local suppliers and based on their policies of diversity, expects and retains suppliers that have a similar diversity culture. Knowing and understanding the local customs and traditions of the communities where McDonalds has established businesses, integrating people from these communities into the company, and adapting locally to the tastes and cuisines of the community, has made McDonalds the drawing card in their industry.In the United States alone, McDonalds has won legion(predicate) awards and received national recognition for diversity. According to McDonalds website, www.mcdonlads.com, awards include PUSH-Excel Corporate Partner Award, Corporate feat and Image Award, Nullities Corporate Award, Corporate Vision Award, and the Circle of Inclusion Award. These awards and recognitions are not the result of a surface attempt to appease the critics. They are the result of McDonalds embracing and integrating diversity into their company ethos as an plus and an ally.McDonalds realizes that having diversity as an asset greatly enhances the profitability of the company. Diversity is a direct reflection of a companys interpersonal relationships. These relationships, if positive, result in a rewarding venture. Conversely, if the relationships are negative, the companys morale d eclines and if not addressed, leads to the deterioration of the company. This deterioration this instant impacts the companys income and the communitys acceptance of the business. However, McDonalds leadership encourages diversity through their policies and programs. McDonalds proven success with leverage the advantages of diversity can be attributed to their core value of ethics.McDonalds success is create on the foundation of personal and professional integrity (www.mcdonalds). From the beginning, McDonalds has based its character on trust and dependability, and their commitment to the community made them a plate name. Founder Ray Kroc, believed in giving something back to the community in order to make the world a better place. Throughout the 1970s, McDonalds became problematical with a lot of sympathy work. In 1974 established a charity called Ronald McDonald House. The purpose of this program was to provide temporary housing for the families of seriously ill children rece iving treatment at nearby hospitals. Since the 70s, more than 10 million families around the world benefited from the comfort provided by Ronald McDonald Houses (www.rhmc).In addition to their community involvement, McDonalds has a long-standing commitment to environmental protection. Restaurants around the world have innovative programs for recycling, resource conservation, and waste reduction. The environmental achievements of this corporation have been recognized by organizations such as the Audubon Society, Conservation International, Keep America Beautiful, the National Recycling Coalition, and the U.S. Environmental Protection Agency (www.mcdonalds).McDonalds is also an adequate opportunity employer. As an equal opportunity employer McDonalds ensures that employees and job applicants are selected, trained, and promoted without discrimination to race, gender, sexual orientation, age or disability. The company promotes their employees based on their relevant skill, talents, and performance. In support of this McDonalds promotes and sustains a working environment, which is free from unlawful discrimination, harassment and bullying. Employees are regarded as members of a team where everyones opinion is valued and respected. The Human Resources department monitors the effectiveness of the discrimination policies at regular intervals and takes corrective action as undeniable to ensure that they being complied with (www.mcdonalds). Employees who feel that they have been treated unfairly are advance to use the remedies outlined in the Companys handbooks. McDonalds ethical standards, as well as their strategies for globalization and diversity are instrumental to the overall success of the company.The purpose of this paper was to discuss external and internal factors that have affected McDonalds. This was achieved by explaining what the factors are where and how McDonalds dealt with each of the external and internal factors. The factors discussed were globaliza tion, diversity, and ethics. The paper illustrates how globalization is necessary for success and survival of McDonalds in the worldwide market. The paper also shows how diversity integrated people from different communities into the company, and adapted tastes and cuisines of the community. McDonalds showed ethics by being an active leader in the communities. There are many different values to the dollar around the world, many issues that have occurred in many of those regions/websites, and about 119 countries served by McDonalds that rely on the functions of management to succeed.Critical ontogenesis the current strategy of MacDonaldsThe current strategy involve of chock up psychoanalysis as well as ram matrix or strategies which is given below accordingly.SWOT Analysis FrameworkEnvironmental Scan/Internal AnalysisExternal Analysis/ / StrengthsWeaknessesOpportunitiesThreatsSWOT matrixFigure SWOT Analysis FrameworkSWOT Strategies of MacdonaldsThe SWOT MatrixA firm should not n ecessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a hawkish advantage by identifying a fit between the firms strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is shown belowSWOT / TOWS MatrixStrengthsWeaknessesOpportunitiesS-O strategiesW-O strategiesThreatsS-T strategiesW-T strategiesFigure SWOT / TOWS MatrixS-O strategiesS-O strategies pursue opportunities that are a good fit to the companys strengths. As like MacDonalds expands their Chinese market and increasing announce and restaurant location because Chinese population is increasing day by day .In addition their car ownership is growing rapidly which is another opportunity for MacDonalds to expand their market cultivation.Ho rizontal integration is the another opportunity which is tuned into strength for MacDonalds because by acquiring Krispy Kren Corporation they captured the market of them .As well as the advantages of horizontal integration is expansion of a firm within an industry in which it is already active for the purpose of increasing its share of the market for a particular product or service. Cost minimization, raw material availability, quick delivery and others factors are the advantage of horizontal integration which is adopting MacDonalds as a current strategy.It can adapt to the needs of the societies and undergo an innovative product line which might be the good opportunity for MacDonalds to convert into strength. It would be the remarkable opportunities to turn in to strength.Researching green energies and green package solutions and incorporating these findings as a part of their marketing strategy and adverts which would be another opportunity to transfer into strength.Create new product offerings. Continue to use technology to influence revenue strategy possibly use textbook messages to deliver specials offers to individuals who sign up for such services .These also might treated as opportunity which can be concerted in to strength.W-O strategiesW-O strategies overcome weaknesses to pursue opportunities. As MacDonalds weakness is lack of menu development so they have to work hard with this strategy and currently they are working with that as well which is being convert to pursue opportunity.They are currently doing menu development as well as product development of healthy lifestyle and Hispanic food lines which were weakness of them.In addition MacDonalds has several weakness which might be tune in to pursue opportunity if they overcome that weakness.Like-It uses advertising that mostly targets children.High employee turn-over.It has except to accomplish going on the trend of organic food.Price competition with the competitors resulting in low revenue.La ck of innovative products.S-T strategiesS-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. Macdonalds are increasing their number of restaurant as well advertisement in the Disney and nautical Park as well as key markets to avoid the external threat of competitors like Burger King, Starbucks, Wendys Taco Bell, and KFC.Moreover there are numerous strength which can use its strengths to reduce its vulnerability to external threats..It takes locomote in adjusting the Ingredients and product offerings in order to comply with the upgraded health standards deemed necessary by the USDA.Its recognized as one of the worldss most recognized logos.It has brand menu items i-e Big Mac, Chicken McNuggets, which further promote McDonalds.Active Childrens jack ladder The Ronald McDonald House. It is recognized as a socially responsible and community oriented firm.Globalization 31,000 restaurants serving 120 countries. Of the 31,000 r estaurants at least14, 000 restaurants in the US. It has located itself in major airports, cities, highways, tourist locations, theme parks.Earns revenue not merely by fast food sales, but also as a place investor, a franchiser of restaurants. It earns revenue by fast food sales as well as a property investor and a franchiser of restaurants.W-T strategiesW-T strategies establish a defensive plan to prevent the firms weaknesses from making it highly susceptible to external threats. As Macdonalds concentrate their development of product and redesign of website which is being substance abuser friendly. In addition they are increasing their sales promotion and advertisement to reduce external threat.