Environmental Analysis of McDonald's

Essay by EE232428University, Master'sA+, July 2005

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Environmental Analysis of McDonald's


McDonald's is one of the most well-known brands in the world, and is associated with burgers and with American-style fast food throughout the world. The company changed the way that Americans--and indeed, much of the world--eats, but the company has also struggled in recent years. McDonald's relies on a vast network of franchisees, and has arranged to buy back franchises that cannot be sold. The company's stock price has plummeted in recent years, franchisees are unhappy with the marketing support--or lack thereof--that they receive, and the consuming public has changed its tastes both domestically and in the international market. This analysis considers the company's actions with regard to three environmental characteristics: remote, industry and operating, and seeks to determine whether McDonald's has been adaptable within these environments.

The Remote Environment

The remote environment is the external environment over which companies have no control. Economic downturns around the world impact McDonald's performance, and the company is closing stores in Japan, but perhaps too late to prevent significant losses.

McDonald's is an inexpensive fast food which should do well even during economic downturns since consumers may turn to such fast food from more expensive alternatives that they consume during better economic times. However, McDonald's has not been able to capitalize on this and has lost market share as a result.

Demographics are also working against the company in that consumers are increasingly better educated about nutrition and are interested in healthy alternatives to traditional fast food such as burgers. At the same time, however, consumers may be confused by the menu selections that McDonald's has introduced, particularly when those selections are not easily integrated--such as salads with dressings that cannot be accessed due to poor packaging. Consumers may not equate McDonald's with healthy eating, and that might...