Pest Analysis of Mcdonald

Topics: Fast food, Hamburger, Fast food restaurant Pages: 7 (2122 words) Published: March 20, 2013
MKT 204 Principle of Marketing 2
Individual Assignment
Fast food industry Swot Analysis

Name: Ting Ze Kai
ID: I11008551
Section: 5K1

Table of Contents

Company Background| 3|
PEST Analysis | 4-9|
4Ps Strategies| 10-11|
References| 12-13|
Appendix| 14|

Company Background

McDonald is a largest chain of hamburger fast food restaurants in the world. Approximately 68 million customers in 119 countries daily are served. The birth of McDonald began with Raymond Albert Kroc. He found two brothers (Richard and Maurice McDonald) who run a hamburger restaurant and acquired the franchising right from them to run McDonald’s restaurant. In 1955, McDonald’s Corporation was founded by Ray Kroc and opened the first restaurant in Des Plaines, Illinois. In 1980, GOLDEN ARHCES RESTAURANTS SDN BHD gets the license to operate McDonald’s restaurant in Malaysia from McDonald’s Corporation USA in 1980. The first restaurant McDonald’s Malaysia opened at Jalan Bukit Bintang, Kuala Lumpur. Now, it has more than 200 restaurants operated in Malaysia.

PEST Analysis- McDonald

Political * Raising retirement age * Healthy Issue * Taxation| Economic * Exchange currencies * Economic growth * Interest rate| Social * Seek to better quality * Technology with teenagers

| Technology
* Online advertising * Mobile CRM * New technology


Raising retirement age
According to the V.SHANKAR GANESH and EUNICE AU (2012), they stated that the retirement age for the public sector has already been raised to 60 by government. It can be a huge impact for the company. Normally, company paid high salary for the old workers which contain high skill and experience. For saving cost, company will recruit new worker which paid low salary to cover worker near retirement age. But, the retirement age has been increase and old worker still with high salary. It will lead the cost of labour increasing to the company.

Healthy Issue
According to the Audrey Edwards (2012), he stated that 35 major food and beverage(F&B) producer and fast food has been asked by the government to reduce the sugar and salt content in their product. It implies government will start to enhance the standard of requirement of the food and request fast food company emphasis on more healthy food. Therefore company should readjustment the standard of their food to reach the government requirement. It might affect the taste of their product and losing their customers. Taxation

Prime Minister Dato Seri Najib in Budget 2012 announced franchise fee is now tax deductible in Malaysia. Those fees for franchise business they paid are allowable for tax deduction (NBC, 2011). It is good news for those franchise companies. Normally, a rise in corporation tax has the same effect as increase cost. Company will pass some of this tax on to consumer with higher price. Whereas, franchise business can use those fees they paid to deduce the tax from company. Therefore, the cost will be decrease and they can provide more value meal for their customer. Furthermore, they have more capital to find a new market such as hot drinks market, healthy food market and so on


Exchange currencies
According to the The Star (2012), it mentioned that the ringgit climbed 3.7% to 3.0598, the biggest gain since the third quarter of 2010. A head of treasury at Bangkok Bank Bhd said that the currency is on a strengthening trend and could test 3.03 to the dollar in the near term (The Star, 2012). It means that the exchange currency maintains at the high level and it will be increasing in the following. McDonald always imports most of its raw material such as beef and potatoes due to local market cannot supply in abundant to meet the demand of its products. Therefore, the strengthening of ringgit makes company cost of purchase decrease. Then, company is able to lower their product price and diversify their...
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