Economic Factors Important to McDonalds Corporation This aspect of the

Economic factors important to mcdonalds corporation

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Economic Factors Important to McDonald’s Corporation This aspect of the PESTEL/PESTLE analysis pertains to the effects of economic conditions and trends on the remote or macro-environment of McDonald’s. Economic changes directly and indirectly influence business performance. The global economy, regional economies, and local economies influence McDonald’s industry environment through the following economic external factors: 1. Slow but stable growth of developed countries (opportunity) 2. Slowdown of the Chinese economy (threat) 3. Rapid growth of developing countries (opportunity) The slow but stable economic growth of developed countries is an opportunity for McDonald’s to grow and increase the stability of its restaurant chain business. The U.S. market remains the biggest contributor to the company’s revenues, but the business also benefits from the stable recovery and growth of European markets. On the other hand, the slowdown of the Chinese economy is considered a threat in this PESTEL/PESTLE analysis. This external factor is a strategic issue because the Chinese market is a major contributor to McDonald’s revenues. Nonetheless, the company has the opportunity to grow through expansion in high-growth developing markets, such as in Asia. In this aspect of the PESTEL/PESTLE analysis of McDonald’s, economic external factors mainly provide opportunities for business growth. Social/Sociocultural Factors Influencing McDonald’s Business Environment This aspect of the PESTEL/PESTLE analysis refers to the social conditions that support or limit McDonald’s business. Social trends influence consumer behaviors and, in turn, affect the remote or macro-environment of the
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business in terms of revenues. In this case of McDonald’s Corporation, the most significant sociocultural external factors are as follows: 1. Rising disposable incomes (opportunity) 2. Busy lifestyles in urban environments (opportunity) 3. Increasing cultural diversity (threat and opportunity) 4. Healthy lifestyle trend (threat & opportunity) Based on the external factor of rising disposable incomes, McDonald’s has the opportunity to grow based on the increasing tendency of consumers to buy fast food instead of cooking at home. This tendency is also linked to busy lifestyles in urban environments. These lifestyles increase consumers’ likelihood of dining in restaurants like McDonald’s instead of cooking food at home. On the other hand, the increasing cultural diversity is perceived a threat and an opportunity in the context of this PESTEL/PESTLE analysis. For example, this sociocultural external factor creates a diverse set of consumer preferences based on various local and regional markets that McDonald’s must account for in product development. Inability to do so can reduce the company profits. The fast food business has the opportunity to increase its flexibility in product design to satisfy consumers’ preferences in different markets around the world. Furthermore, the healthy lifestyles trend is a
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