Mcdonald's

Name Course number Instructor’s name Date McDonald’s: Company's External Environment Analysis Introduction McDonald’s is a widely recognized fast food company. It has international presence with over thirty thousand stores in different parts of the world including Asia and thousands of McDonald’s franchises. The company registered a profit of $ 5.46 billion in 2012 (Strategic Management Insight, 2013). An analysis of the company’s external environment is important in determining strategies that the company requires taking to increase profitability. Political, governmental and legal McDonald’s operates in different countries making it necessary to comply with the specific regulatory requirements of the respective countries. The different political systems and government structures in the different countries enact legal requirements as they relate to a number of issues. Some of the regulatory issues include minimum wage regulations, hygiene and quality regulations, and labeling and packaging regulations. The regulations have an impact on cost of the products as well as the quality. In some countries like the UK, the labeling and packaging regulations have been imposed to promote healthy eating habits. McDonalds and other fast food companies are required to provide information about the calorie count on the labels so that customers are aware of how much calories they are taking. This is in an effort to reduce the number of lifestyle diseases such as obesity, diabetes and others that are triggered by excessive consumption of refined foods (BBC, 2007). The McDonald’s Franchise in India has a legal standoff with the government over non-compliance about the contents in the food, which conflicts with Hindu religious beliefs. McDonald’s requires complying with the employment laws, tax commitments among other regulations to retain licenses and succeed in the different countries (Rafi, 2013). Technological force Technology has transformed fast food businesses in different ways. McDonalds for instance, apart from television advertising it has also embraced social media marketing becoming the ninth most popular brand on facebook (CNBC, 2012). Technology has also allowed for online ordering which reduces the labor costs for the company and increased service speed. It has also adopted the Big Mac for increased speeds in processing orders. It has also incorporated technology in its inventory management to monitor flow through the supply chain that has made it easier to manage international operations (Rafi, 2013). Competitive forces McDonald’s main competitors are Burger King World Wide, Inc., Yum Band Inc. and Wendy’s Company (Strategic Management Insight, 2013). Other competitors include Starbucks corporation, Chipotle Mexican Grill, Tim Hortons, Inc., Darden Restaurants Inc., Panera Bread Company, Inc., Cheese Cake Factory and Brinker International Inc. among others (NASDAQ, 2013).These competitors have saturated the fast food market in the developed countries. The competition has resulted in reduced profits as the company struggles to clinch the little available market share. There is need for it to further expand its franchises in developing markets to counter the effects of the prevailing stiff competition. It is also important for the company to roll out loyalty programs that will hook their customers and stop them from going to the competitors. The loyalty programs are important because when customers know that they would get some discounts from being loyal, they are less likely to move to the competitors. Additionally, it is important that the company launches products for the health conscious people as the world is increasingly becoming aware of the health consequenc...