External Environment Analysis of McDonalds Corporation



External Environment Analysis of McDonalds Corporation

Introduction

The companies around the world are located and operate in an environment, which is a resource for them. In turn, the companies themselves send the results of their activities to the environment. Therefore, the organization and the external environment are in constant relationship and interaction. External factors have an impact on all the elements and processes of the organizations. In this paper, we will discuss the external environment of McDonalds Corporation which is one of the top brands of the world.

The McDonalds is the largest restaurant chain fast food in the world, and is originally from the United States. The company manages its subsidiaries directly or through franchising. It is based in Oak Brook, a suburb of Chicago, in the State of Illinois. The restaurants of the company are spread all over the world and employed around 438,000 full-time employees. The company has become one of the most recognizable organizations and has challenged the so-called globalization, the hectic lifestyle and modern consumerism with its new style and tactics.

Discussion

When the environment is favorable to the company, we speak of opportunities (which are favorable economic conditions, legislation, and market dynamics). On the other hand, when the environment is negative, it is called a threat or constraint for the company's business. The company's strategy will therefore be to seize opportunities and instead divert or bypass threats. However, the goal of the business will be to turn threats into opportunities. The macro factors which create the environmental conditions of the organization are given below:

economic, which characterizes the state of the economy (the value of GDP, inflation, unemployment, natural resources, climate, education workers, and the value of wages);

legal, these are the laws and regulations that establish the rule of law and the framework of relations, as well as their practical implementation (to determine the permissible limits of action and relationships with others) (Smith, 2007);

political, this involve the methods of determining the direction of development of dominant political ideology, government stability, and the intensity of opposition;

social phenomena and processes (the ratio of people to work and quality of life, values, traditions and national characteristics, the demographic structure of society, and the level of education);

Process that determines the development of scientific and technical progress (research and development, innovation, and modernization of production).

The impact of individual factors on the organization is not the same because of the size of organization, geographic location, and the sector of the industry. Therefore, it is necessary to rank the factors according to their impact on the organization and conduct an appropriate observation. The complexity of the environment is determined by how many factors affect the functioning of the organization and how these factors are related. The dynamism of the environment is characterized by rapidly changing factors which affect the operation of the organization.

The most important element of strategic management and planning of the company are the analysis of the external environment as well as the monitoring of market ...