Mcdonald's Pest Analysis

3380 Words14 Pages
The foundation of McDonald’s, a well-known brand name in fast food industry, dates back to 1940 when the McDonald brothers, Dick and Mac, opened a drive-in restaurant in San Bernardino, California. They came up with an idea of using an assembly line process to serve more customers in the same amount of time. In 1948, that idea turned out to be a success as the potato chips were replaced with the world famous French fries of McDonald’s. The real person behind the company’s history, however, is Ray Kroc (picture) (Fast Food Restaurant 2015). Thanks to Kroc’s open mind by focusing investment on advertisement, McDonald’s experienced a tremendous growth between the period of 1960s and 1970s. In 1962, McDonald's introduced its now world-famous Golden…show more content…
External environmental analysis (PEST)
Besides looking at a business’ internal resources and industry factors, it is necessary to understand the external environment factors that may have a profound impact on a business’ performance and activities in the long term. The external environment analysis (PEST) is the framework which best suits those needs. PEST stands for Political, Economic, Social and Technological. The PEST analysis on McDonald’s can help identify great opportunities or significant threats concerning the changes in the business environment.
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Instead, the competition is so high that McDonald’s is under pressure of maintaining the market share and customer retention rate. Such pressure is caused by the strong growth and quick expansion of its major competitors. In recent years, the company’s customer satisfaction ratings are below average while in 2014, it came last in ranking out of 21 popular U.S burger chains (Statista 2013). In addition to its big competitors, McDonald’s runs the risk of losing shares from smaller indirect competitors such as local restaurants, substitutes, fine-dining restaurants,
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