External Environment

Political Factors:

Economic Factors:

The policies of governments affect

business of McDonalds in various
ways; in how their products are
produced, promoted, and sold.

The difference exists in countries

in different stages of economic
development has an influence
specially, in India.

Worlds largest democracy

4th Largest Economy in of the

World

Fairly stable governments

Entry & Exits in sectors

controlled by Govt.

Low Purchasing Power. The

McAloo Tikki (INR 25.00) is one
of the examples
Currency Exchange Rate
Fluctuation is Stable.

External Environment
Socio-Cultural Factors:
Socio-cultural Demographic trends
will also affect businesses.
Eating out market growing @ 6%
Per Year
Local taste preference
Significant Vegetarian population
Religious Prohibition against beef
consumption.

20 major languages, 800+

dialects
50% population literate

Technological Factors:
Thesystematic substitution of
equipment for people and
positioning of technology have
helped each franchise to be of
thesame high standard.
Television advertising
Better inventory system
Use of modern technology
Use of better distribution chain
Research And Development
Department

External Environment
Environmental Factors:

Legal Factors:

It is very important for

McDonalds to consider the
physical terrain and climate in
the appraisal.
The climatic conditions can
affect products in foreign
market.
Being environment friendly is
also another important factor.
Environmental groups force to
reduce use of plastic bags
and Styrofoam packing to
reduce pollution

Legal forces are highly important

as they cover the main aspects of
the company.
Operating hours,
Business registration,
Taxation Law
Labour and employment laws
Quality & Environment
certification (such as ISO)

Porters Five Force Analysis

The entry of new competition to the market:

The barriers to entry are quite highfor new entrants,

Economies of scale
High cost of investment is required
Supply Chain

The threat of substitutes or replacement products:

A substitute product is one that can be used as an alternative to a
companys own.
Pizzas
Local kebab and
Fast food houses.

Porters Five Force Analysis

The bargaining power of buyers
Fairly low risk for McDonalds as consumers have little control over
Switching cost is low

The bargaining power of suppliers

McDonalds has a great deal of influence over their suppliers, due to the scale
of McDonalds operations
The threats from suppliers are low.

The rivalry between firms of the same

sector
High Rivalry in the industry Among McDonalds and KFC. However, in certain
markets, McDonalds will face competition from established domestic fast-food
outlets.

Strategic Group Mapping