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Mcdonald's Pest Analysis

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Company Profile

Mc Donald’s is one of the world’s largest food retailer. With a retail portfolio of 36,000+ stores around various locations and serving close to 69.3 million customers in 119 countries each day. Keeping the franchise business model throughout globally, Mc Donald’s has distributed over 80% of its restaurants as franchises. Opening its first store in Chicago, Illinois in 1955, it has expanded exponentially entering all markets. With a workforce of more than 1.55 million they have set up stores which has caught the eye of every traveler in the world. With a phenomenal strategy of market capture and mass marketing they have established organizational systems to set full control in physical distribution and customer satisfaction. …show more content…

• Act like a retailer and think like a brand: Keeping long term reputation in mind, they deliver sales not only in the present but continuously try to improve in the long run.

PEST Analysis

PEST Analysis is a business tool to understand the market in a better consolidated way. The abbreviation used stands for Political, Economic, Social and Technology. While entering a new market every company or organization should perform this analysis for taking strategic management decisions.
POLITICAL

• In USA, Government is trying to control marketing of fast food because of Obesity, cardiovascular and cholesterol issues.
• In India, Political parties which are inclined to the Hindu religion (Bhartiya Janta Party) does not like the use of Non Vegetarian products in food menu.
• They want to see mostly vegetarian restaurants in the country
• Good news is that trends in India is changing which is making young people like fast food
• India is changing from Nationalistic society to liberal mind set up …show more content…

Michael Porter is a Business Graduate from Harvard Business School. His 5 forces analysis which develops a very good one page view of the competitiveness and attractiveness of the market. It helps to determine the business strategy within an industry. Companies entering new markets make use of this framework for getting a 360 degree overview of competition and how to increase industry profits.

Below are the 5 forces which has been analyzed in this case of Mc Donald’s entry to Indian market. With the help of these insights the company can plan accordingly.

1) Threats of New Entrance- HIGH:

 Entering a fast food restaurant business is quite difficult. As it is a monopolistic competition, the demand of current firms’ decreases with new firms entering the market
 As the cost of entrance is quite high, investing on Research and development and to establish the brand name is difficult
 The time of entering the market also keeps much importance.
 Legal and political barriers are present to establish business

2) Threats of Substitutes-HIGH:

 As Mc Donald’s faces the same scenario throughout the world, the threat of competition is very

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