Pestle Analysis

Topics: Marketing, Fast food, Economics Pages: 8 (2473 words) Published: May 23, 2011
PESTLE analysis
to explain company's international strategy for
I.                  INTRODUCTION
Globalization has made the globe considerably smaller.  States lines have turned into practically a divider separating certain regions of a massive unitary community.  Businesses are the one that are highly affected by this occurrence.  The virtual closeness of states has made trade and commerce an international event.  Together with these advances, the key standards of business are similarly taken into account.  The discussions in this paper shall involve an analysis of the international expansion strategy utilized by a multinational company.  In this case, the situation surrounding McDonald’s will be taken into consideration.  The following annotations and propositions employed in the following discussions are to be supported by claims on journals and academic pieces that address international expansion strategies and international marketing theories.  

II.               BACKGROUND
The modest beginnings of McDonald’s in Illinois turned out to be among the main brand names in the international scene.  It has been synonymous to what is widely-accepted the fast-food concept. The company operates over thirty one thousand stores all over the world to date. It was one of the first to perfect the concept of fast service in the food industry in its early days of operations in 1955. Given that the products of the company are mainly western in character, its operations has also expanded to the Asian region. The first McDonald’s store operated in Hong Kong in 1975.  The first shop operated at Paterson Street in Causeway Bay.  Up to this data, the functions of McDonald’s in Hong Kong covers over two hundred restaurant chains spread in the whole of Hong Kong alone.  In the rest of the globe, it operates thousands of store franchises that functions autonomously.  

Pestle is an analysis of the external macro environment in which a business operates. According to  (2008), pestle stands for political, economic, social, technology, and environmental factors.  
A.       Political Factors
The international operations of McDonald’s are highly influenced by the individual state policies enforced by each government. (2001, 705) For instance, there are certain groups in Europe and the United States that clamor for state actions pertaining to the health implications of eating fast food. (2005) They have indicated that harmful elements like cholesterol and adverse effects like obesity are attributable to consuming fast food products. On the other hand, the company is controlled by the individual policies and regulations of operations. Specific markets focus on different areas of concern such as that of health, worker protection, and environment. All these elements are seen in the government control of the licensing of the restaurants in the respective states. For instance, there is an impending legal dispute in the McDonald’s franchise in India where certain infringement of rights and violation of religious laws pertaining to the contents of the food. The existence of meat in their menus in India is apparently offensive to the Hindu religion in the said market. There are also other studies that points to the infringement of McDonald’s Stores with reference to the existing employment laws in the target market. Like any business venture, these McDonald’s stores have to contend with the issues of employment procedures as well as their tax obligations so as to succeed in the foreign market.       

B.       Economic Factors
Organisations in the fast food industry are not excused from any disputes and troubles. Specifically, they do have their individual concerns involving economic factors.  Branches and franchises of fast food chains like McDonald’s has the tendency to experience hardship in instances where the economy of the respective states is hit by inflation and changes in the...
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