Strategic Management

External Analysis for McD

Presented By:
Imroz Farooq
Subramaniakrishnan K.
Prasaath P
Anurag Tripathi
 PESTLEEDGC

Political
1. Increasing international trade agreements
2. Govt. guidelines for food industry
3. Public health policies

Economic
1. Growth and depreciation of a country’s economy

Social
1. Health lifestyle
2. Busy lifestyle in urban areas

Technological
1. Increasing sales through online food orders
2. Automation
Environmental
1. Change in climatic conditions
2. Reducing carbon footprint

Legal
1. Rising legal minimum wages
2. Animal welfare

Ethical
1. CSR
2. Working conditions and human rights

Demographic
1. Large young population, average age in India is 27 years

Geographical
1. No beef and pork burgers
2. Vegetarian menu
 Porter’s 5 Force Model

•Competition: High from outlets like Burger King, KFC, local outlets

•Potential of new entrants: Moderate, since they have a huge network

and established business

•Power of Suppliers: Low since large number of supplies

•Power of Customer: High, since they have other options to choose from
giving product at lesser prices

•Threat of Substitutes: Moderate (Subway and Dominos)

 External Factor Analysis (EFE)
Opportunities WEIGHT RATING WEIGHTED SCORE
Low cost menu that will attract 0.14 3 0.42
customers
Freebies and Discounts 0.1 3 0.3
Growth of fast food industry 0.08 2 0.16
Lesser average age in India 0.1 2 0.2
Globalization and westernization 0.08 1 0.08
1.16
Threats WEIGHT RATING WEIGHTED SCORE
Joint Ventures 0.1 3 0.3
Resistance against non-veg food 0.04 1 0.04
Low cost by competitors 0.16 4 0.64
Health and quality issues 0.14 3 0.42
Environmental issues 0.06 2 0.12
Total 1 2.68
 Competitive Profile Matrix
McD Burger King Stoner
Critical Success Weight Score Weighted Score Weighted Score Weighted
Factor Score Score Score
Marketing 0.1 4 0.4 4 0.4 2 0.2
Brand 0.25 4 1 3 0.75 3 0.75
Reputation
Location 0.15 3 0.45 3 0.45 3 0.45
Product Quality 0.1 3 0.3 4 0.4 3 0.3
Customer 0.2 4 0.8 4 0.8 3 0.6
Service
Customer 0.1 4 0.4 3 0.3 1 0.1
Loyalty
Product Range 0.1 3 0.3 4 0.4 2 0.2
TOTAL SCORE 3.65 3.50 2.60