Free Pestle Analysis Essay Example

Business Health Check

Introduction
It is always important for an organization to have a strong hand over its organization and its related loopholes in order to bring economic and strategic effectiveness within their operations (David, 2005). For that purpose, it is more than essential to have a perfect health checks and managerial activities from which the organizations can compete effectively with other organizations operating in the same line of business (Enz, 2010).
Strategic Management has some potential, incredible and powerful tools that can be used to assess the business health of a company, and then recommend powerful strategies that can be used to overcome on these menace. The main objective of this assignment is to read and answer a case study of McDonalds. There are three different parts that needed to be complete in this particular assignment that relates specifically with the strategic position and business health check of the mentioned company.

Analysis & Findings

A)
In this part of the analysis, it is required to apply three different techniques which are PESTLE, Porter’s Five Forces and SWOT analysis to analyze its impact on the industry and the business performance of the company.

Political
McDonald is currently operating in the Fast Food Industry which is often a target for the government based initiatives that aimed to improve the health and reducing the level of obesity (Glowik and Smyczek, 2008). The Government of many American and European countries compel the fast food companies to duly mentioned and indicated the number of nutritional factors found in each of the meal that include the salt, sugar and other levels. Case study reveals that after the consideration of this factor McDonald reduced the overall level of salt content in their foods specifically in the European areas (Glowik and Smyczek, 2011). The fast food industries in the United States are self regulating with very lower level of Government intervention. McDonald is currently playing a perfect and dominating role in the overall industry to make it perfect with the sheer potential of the restaurant industry of the U.S.

Economical

Fast Food Industry is one of those industries of the world which performed exceptionally well during the current economic crisis as well (Halberstam, 2001). The fast food industry of the United Kingdom (UK) increased by 4.5% in the year 2009 in which the economic crisis was on the peak (Harrison, 2003). Apart from the UK, a considerable growth is found among other countries as well in the increasing demand of the countries which are Japan, France, Belgium and others. McDonalds which was growing with a remarkable pace in all over the world has posted a real decline in terms of their net sales in the year 2014 in which the global sales of the company had declined by 3.7% in all over the world.

Social

According to the case study, there were number of actions that relate specifically with the fast food industry like the issues of unhealthiness related to many products (Harrison and St. John, 2004). Lots of fast foods will make the things obese for the people. However the decreasing the level salt and other unhealthy ingredients had made the things in the favor of McDonalds to maintain the level of significance.

Technological

Technological aspect is very important for the organizations in the current economic scenario, as it is now emerged as one of the most important aspects for them (Harrison and St. John, 1998). From the case study, it is found that McDonalds used the internet for their numerous actions particularly. The company started the Youtube Campaign for having betterment and improvement within their functions and they received positive response from the individuals. They also received many aspects from which they improved their business performance incredibly and compete with the other companies operating in the same line of business.

Environmental

Currently, the entire world is moving towards Going Green with maximizing the level of effectiveness in terms of their environmental functions. McDonalds is collaborating with the Government of the United States and other important countries of the world to make the environment clean and green by reducing the effects of Carbon and Toxic Emission. From the case study, it is found that the company is using the technology in order to increase the level recycling in a better and organized manner.

Legal

McDonalds already operates with safety and legal obligations as far as making the foods are concerned to comply effectively with all the legal aspects of the food industry. The company is making perfection for them in terms of inspecting and making the foods for their customers in terms of maximizing its market share within the industry.

Porter’s Five Forces Model

Porter’s five forces model is a perfect model that can be used for the competitive analysis of the entities. Porter’s Five Forces Model has been performed on the basis of five different aspects particularly (Harrison and St. John, 1998).

Rivalry among the Competitors (High)

Bargaining Power of Consumers (High)
The bargaining power of consumers in this particular industry is very high because they have number of options to use the products of other companies.

Bargaining Power of Suppliers (Low)

The level and quantity of suppliers is very high, due to which the associated amount of bargaining power pertains to them is on a very lower level, which means that the company is having cost efficient products.

Threats of New Entrants (High)

The threats of new entrants in the fast food industry are increasing heavily which may decrease the value of the market share of McDonalds in the near future (Hitt, Ireland and Hoskisson, 1999).

SWOT Analysis

Strengths
The brand is largely popular in all over the world (MBA Skool-Study.Learn.Share., 2015)

The number of the products of the company is very high

The foods are hygienic and the services are quick for the company
The advertising and marketing campaign of the company is very effective and powerful
Weaknesses
The management of the Franchises of the company is not very effective and sound
The foods are fatty and have high calories in it
Opportunities
Home Delivery Service stance is increasing in all over the world
Vegetarian market is also increasing with a robust pace that may introduce new and effective products for the company
The opportunities to venture and entering in new markets is increasing positively
Threats
Health Consciousness is increasing among people which decrease the propensity to consume the products of McDonalds
Threats of increasing competition
B)
A)
Business Health Check (BHC) is one of the most important aspects that associated with the productivity and level of efficacy of an organization (Hitt, Ireland and Hoskisson, 1999). BHC gives the chance and the opportunities for a business to grow substantially in a given market frame. From the case study, it is found that the operating income of McDonalds decreased by 9% in Asian region due to the weak performance of the company in the region of the United States (U.S. (Hitt, Ireland and Hoskisson, 2007)).
Therefore, it is necessary to strengthen the segment of the U.S. before executing the things in the favor of the company (Hitt, Ireland and Hoskisson, 1999). Due to the decrease in sales and operating income, the diluted earnings per share of the company decreased by 13% in the year 2014 that bought real ineffectiveness and problem for the company. The region which should be focus upon to have a perfect BHC of the company is European region which has very high potential in terms of generating revenues for the companies (Ireland, Hoskisson and Hitt, 2006).
As a Business Consultant for McDonalds, I would suggest to have proper utilization of Competitive Profile Matrix (CPM) and implementation from which they can have a proper check and balance over the activities and stances of the companies who are wishing hard to expand in this region. The steps which will be taken into consideration for the implementation are as follows (Ireland, Hoskisson and Ireland, 2009)

Carry out a Competitive Analysis to get a knowledge regarding the closest Competitors of the Company

Carry out a strategic audit of their strategies of marketing and product development which they are utilizing for their product and services

Compare the Strategies of the company with other companies operating in the same region for their effectiveness

Have a proper feedback from the upper management of the company to gain competitiveness in the market
B)
The management of employees is very important and powerful for the sake of an enterprise, and without the management of employees, it is not possible for the companies to maintain a strong and powerful tradeoff within the workplace (Kachru, 2009).
In order to analyze the skills and managerial aspects of the employees, the employees are requested to give their hundred percent efforts and the employees should have a knowledge regarding the competency level of the employees (Phadtare, 2011). Proper communication among the management and the employees is very significant and important, and the management of McDonalds should posses the same aspect to get detailed information related to the skills and competency level of the employees in a specific branch or franchise (Rothärmel, 2013).
With the help of proper communication and interaction with the employees, the management can get the idea about the training or development of the employees, and can promote and accelerate the skills of the employees in a best possible manner (Thompson, Fulmer and Strickland, 1990). The company should implement Management Bi Objective (MBO) approach from which the employees are entitled to furnish their issues and problems with the upper management to gain the effectiveness of their employees.

Conclusion

The McDonalds Corporation is known as the largest chain of Hamburger for the fast food restaurant. It has the capacity to serve nearly 68 million customers daily in 119 different countries of the world. McDonald’s line of products includes cheeseburgers, hamburger, French fries and other fast food items. The revenue recognition of the company is high as it generated net revenue amounting to US$ 28.10 billion in the year 2013.

References

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