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Assessment two requires students to complete an in-depth analysis of their target organisation's external environment, discuss the strategic options open to the organisation and develop a mission and objectives for the organisation going forward.
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McDonald's Corporation was founded in 1940 as a fast food restaurant. McDonald’s has been a trustworthy brand for years now. The company operates with the mission of being amongst the best quick service restaurants in the world. It has grown over the years to become the largest global chain of fast food industry. The organization operates in 120 countries, has approximately 442,000 employees and more than 37,000 retail fast food outlets (Corporation, 2012).
McDonald's is known for its successful business operations and execution. It has regularly been studied in detail by various analyzers. The company is a symbol of American business enterprise and corporate globalization (Han, 2008). The purchasing power parity of different countries is compared by using the comparative price of McDonalds's burger.
McDonald’s operates in an extremely competitive business environment. The competition is from several large and small global foods retailing firms and differing environmental conditions in its various markets. The company has become one of the most recognized organizations and continuously challenges the modern consumerism, the hectic lifestyle of its style and tactics.
External and Internal Environments have a very strong impact on the working of any organization.
Efficient and effective Marketing strategies can only be developed if a complete understanding of the External and internal company strategies and the environment has been done.
The external environment for a company comprises of many factors. Each of these factors is taken up for detailed analysis below.
Political: An analysis of the influence of economic trends affecting McDonald’s reveals that time and again the company's strategies and direction have been influenced by the changing regulation with respect to food and its content. For example: In European countries, the growing influence of 'Scientific Advisory Committee on Nutrition' poses various regulatory changes in the food service industry (Han, 2008). In 2003, abiding by the directions of this regulatory body, the UK government instructed McDonald’s along with other fast food service players to reduce the salt levels in their products and work towards developing healthy and low-fat alternatives for the customers (Markides, 1999) . Similarly, in Denmark, the regulations by the government gave strict instructions to McDonald’s to reduce the amount if Trans-fat in its various menu items. Trans-fat was proven to be responsible for obesity and high cholesterol and hence McDonald’s had to undergo several changes at strategic and operational level.
Economic: Economic changes also tend to have a lot of impact on the business environment of McDonald’s. Most importantly periods of economic recession are characterized by a decreasing purchasing power of customers and hence impacting their spending levels (Han, 2008). However, tin the past, the fast food industry has been seen to have a positive impact of the recession. For example: In 2008 recession McDonald’s witnessed nearly 4% growth in its revenue (Vignali, 2001). This is largely attributed to the fact that economically-hit customers tend to switch from traditional expensive restaurants to the low-cost fast food industry, thereby driving its sales up.