The business began in 1940, with a restaurant opened by brothers Dick and Mac McDonald In San Bernardino, California. Their Introduction of the “Speed Service System” in 1948 established the principles of the modern fast-food restaurant The original mascot of McDonald’s was a man with a chef’s hat on top off hamburger shaped head whose name was “speed,” Speed was eventually replaced with Ronald McDonald in 1963. The present corporation dates its founding to the opening of a franchised restaurant by Ray Crock, in Des Plainness, Illinois on April 15, 1955 , the ninth McDonald’s restaurant overall.
Crock later purchased the McDonald brothers’ equity in the company and led its worldwide expansion and the company became listed on the public stock markets in 1965. With the expansion of McDonald’s into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics,and irresponsibility. 2. 0 Profile of selected organization McDonald’s Corporation is the world’s largest chain of fast food restaurants, serving nearly 47 million customers daily through more than 31. 00 restaurants In 119 countries worldwide. McDonald’s sells various fast food items and soft drinks including, burgers, chicken, salads, fries, and ice cream. Many McDonald’s restaurants have Included a playground for children and advertising geared toward children, and some have been redesigned in a more ‘natural’ style, with a particular emphasis on comfort: introducing lounge areas and fire places, and eliminating hard lactic chairs and tables. Each McDonald’s restaurant is operated by a franchisee, an affiliate, or the corporation itself.
The corporations’ revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald’s revenues grew 27% over the three years ending in 2007 to $22. Billion, and 9% growth in operating income to $3. 9 billion. 3. 0 a) PEST factory analysis Political factors that affect the McDonald’s are Global market, Deferent political infrastructures, Consumer taxation. Economic factors that affect the McDonald’s are Market leader, Very high target market, Low cost and more income.
Working within many social group, Increase employments. Technologies that affect the McDonald’s are Advanced technology development, Quality standard. 4. 0 Application of PEST analysis to selected organization 4. 1 Political Factors The operations of McDonald’s are affected by the government policies on the regulations of fast food operation. Currently government are controlling the marketing of fast food restaurant because of health concern such as cardiovascular ND cholesterol issue and obesity among the young and children in the country.
Governments also control the license given for open the fast food restaurant and other business regulation need to follow such as for a franchise business. Good relationship with government in giving mutual benefits such as employment and tax is a must for the company to succeed in any foreign market. McDonald’s should also protect its workers by ensuring all the hiring, compensation, training or repatriation is according to Malaysian Labor Law as stipulated. 4. 2 Economic Factors
As a business entity, McDonald’s need to face a lot of economic variables outside its company or its macro environment. Dealing with international sourcing for its material McDonald’s should be aware on the global supply and currencies exchange. Remember, McDonald’s import most of its raw material such as beef and potatoes due to local market cannot supply in abundant to meet the demand of its product. Any upside of currencies especially dollar will be impacting its cost of purchase.
Working on the local country, McDonald’s must face government regulations on tax of refit where it gains from the operation and other tax such as entertainment and restaurant service tax. Each country may have different scale or types of tax available and McDonald’s should follow the regulation if it wants to continue the operation. As a franchise, McDonald’s should also pay certain percentage of the revenue to the parent company in United States. The economic condition and growth of the country also is an important indicator to the demand of products that McDonald’s offered.
As the food priced slightly above normal foods, not many people will have the income angel to consume the products. Moreover if the economy is bad and income participate is affected, the demand of McDonald’s product will certainly going down. On the other hand the good economy also means disposable income is more and people can spend more on more expensive food at fast food restaurant. 4. 3 Social Factors The changing lifestyles of Malaysia due to development of Malaysian economy should more expensive outlet such as fast food restaurant, they have higher expectation.
They want to have quality in services and more conveniences that can differentiate en restaurant from another. Young urban consumers want technology in their life and facilities such as credit card payment, wireless internet, cozy and relaxing ambient place, and other attraction for their hangout and eating. All these needs should also be taken into consideration. There is not much difference between cultural and the purchase of products in a single country but for different countries cultural sensitivity should be upheld.
For example in India people (Hindu) do not take beef, Muslim countries do not take pork, German like beers, Finnish like fish type of DOD menu, Chinese like to associate food with something good (for example prosperity), Asian like rice and Americans eat in big-sized menu. So far McDonald’s has shown good efforts in localization of its menu to suit local taste but it should constantly survey and learn about local culture to better understand and design the best product for them. 4. 4 Technology Factors For a fast food restaurant, technology does not give a very high impact on the company and it is not a significant macro environment variables.
