DESIGN THINKING & INNOVATION
(MBBA208L)
PESTLE ANALYSIS (McDonald’s)
PREPARED BY
Ayush : M23BBAU0428
Devansh dev : M23BBAU0304
Ayush Bhardwaj : M23BBAU0132
UNDER THE SUPERVISION OF PROF. VIJAY PRAKASH MISHRA
School Of Management Bennett University Greater Noida, Uttar Pradesh, India
(February 2025)
PESTLE ANALYSIS
Of McDonald’s
1. Political
Government Regulations: McDonald's must comply with various national and
local regulations. These can include food safety standards, labour laws, and
corporate taxes. Political stability in different countries also influences
McDonald's ability to operate efficiently.
Global Expansion: McDonald's operates in over 100 countries, and political
climate can affect its market entry strategy, tariffs, or trade barriers that could
limit growth or increase costs in new markets.
Lobbying & Advocacy: McDonald's must navigate political pressures related
to health concerns, such as lobbying efforts to address concerns about obesity
and nutrition.
2. Economic
Economic Recession: Economic downturns reduce disposable income, which
can impact McDonald’s sales, especially in developed markets. However,
McDonald's often benefits from offering affordable meal options, which may
see growth during recessions.
Currency Exchange Rates: As McDonald's operates globally, fluctuations in
exchange rates can impact its profitability. Stronger currencies (like the US
dollar) may reduce international revenue when converted back.
Inflation & Costs of Goods: Rising costs of ingredients (e.g., beef, chicken,
and wheat) or labour can affect profitability. McDonald's must adjust its pricing
strategies to maintain profitability while keeping its offerings affordable.
3. Social
Consumer Preferences: Increasing health consciousness and demand for
organic, vegetarian, and healthier options influence McDonald's menu
evolution. McDonald’s has introduced healthier menu options like salads, fruit,
and reduced-calorie choices.
Cultural Trends: In some markets, fast food has become a part of lifestyle,
while in others, consumers may demand more locally adapted foods.
McDonald's adapts its menu to cater to regional tastes and preferences.
Demographics: McDonald’s targets families, young people, and busy
professionals. Their convenience and affordable offerings resonate with this
wide demographic group.
4. Technological
Digital Transformation: McDonald's has invested in technology to improve
customer experience, such as self-service kiosks, mobile apps for ordering, and
delivery platforms. This enables faster service and convenience.
Automation & Robotics: The company has been exploring automation in
kitchens, including robotic cooking and delivery systems to increase efficiency
and reduce labour costs.
Data & Personalization: Using data analytics to personalize offers,
McDonald’s can optimize marketing campaigns and understand customer
behaviour better.
5. Legal
Food Safety Regulations: McDonald's must comply with health and safety
standards in every country it operates in. Compliance with these standards is
essential to maintain brand reputation and avoid legal issues.
Labor Laws: McDonald’s faces strict labour laws related to minimum wages,
working hours, and employee benefits, which can vary from country to country.
Legal disputes regarding labour can affect operations and public image.
Intellectual Property: McDonald's also must protect its intellectual property,
such as its branding, menu items, and the use of proprietary technology for its
drive-thru and mobile ordering systems.
6. Environmental
Sustainability Concerns: McDonald's faces growing pressure to minimize its
environmental footprint. This includes sourcing sustainable materials, reducing
waste, and cutting down on emissions. The company has taken steps toward
sourcing more sustainable ingredients (e.g., cage-free eggs, sustainable beef)
and reducing plastic waste in packaging.
Climate Change: Climate change impacts the supply chain, particularly in
agriculture. McDonald's is affected by climate variability, which could disrupt
the supply of key ingredients.
Waste Management: Fast food restaurants generate significant waste,
including packaging and food waste. McDonald’s has been focusing on
reducing, recycling, and using eco-friendly packaging in response to
environmental concerns.
