Marketing Management Assignment

Group 4 – Environmental Factors

Case Study of McDonald’s Corp.

Company Background
McDonald’s Corporation start from a single drive-in restaurant in San Bernardino,
California in 1948. In 1991, McDonald’s contribute $13 billion USD of the $93 billion USD
fast-food industry, operating 12,400 restaurants in 59 countries [ CITATION Svo95 \l 1033 ].
This giant including company-owned restaurants, franchises, and join ventures. For the
assignment, our group will elaborate the Environmental Factors in conjunction with
McDonald’s business in Indonesia.

Method Used
Business environment includes internal (Micro Environment) and external (Macro
Environment) affecting the organization. Macro environment can be analyzed using the
PESTEL analysis that stands for Political, Economical, Social, Technological, Environmental,
and Legal environment.

Political and Legals in McDonald’s Corp.

The first thing every business has to consider and analyzed when they want to enter
a certain market is the political stability of particular country they want to invest their money
in. An unstable political situation can lead to different problem for business continuity.
After making sure the political environment is good for investment, every business
has to consider government’s rules and regulations. In Indonesia, the government has an
underlying regulation from Ministry of Tourism and Creative Economy about the standard of
restaurant business, Ministry of Health also has a regulation for this particular business,
moreover the organization also need to make sure they have the right legal document.
Because the main issue of controlling food business is health issue.
Having their business in Indonesia that commonly understand as a Muslim country,
McDonald’s also has to care the customer’s belief on it. They have to checked and follow a
certain procedure by Majelis Ulama Indonesia (MUI) for a Halal Certification.
 The other thing McDonald’s need to cater is about the employee laws that applied.
Every employee need to have their social support program (BPJS TK & KS), paid in at least
stated minimum wages, and many other things need to be considered.

Economical Factors in McDonald’s Corp.

Economical environment is one of the vital issue for the business. If the particular
market do not have a buying power, McDonald’s will not consider to enter that kind of
market. McDonald’s also need to understand consumer psychology and levels and
distribution of income, savings, debt, and credit.
Consumer psychology talk about spending patterns. McDonald’s has a good research
on Indonesian market. Indonesian usually celebrate birthday and they like to spend money
in this kind of party, thus McDonald’s try to accommodate this and spare some space in their
restaurant to throw a birthday party for children, they even provide their mascots as clowns.

Marketers also need to distinguish income patterns, (1) very low income, (2) mostly
low incomes, (3) very low incomes, (4) low, medium high incomes, (5) mostly medium
incomes. Using the research data, McDonald’s try to grab as many customers as they can, so
they variety products in different pricing from the cheapest Rp 5,000 french friest to mouth-
watering Rp 50,000 burgers
Sociocultural Environment
Marketers need to be aware that sociocultural environment defines what the
particular market view and how it relates around them. The easiest example is how
McDonald’s applied rice menu in Indonesia and most Asia countries, they even applied a
very distinct menu such as Nasi Uduk and Sambal Matah. It is a smart move because by
trying to make a daily menu as their special menu, McDonald’s slowly blur their self from a
foreign brand to more a domestic and culturally close to the market.

Technological environments
Due to the rapid developments of technology, McDonald’s need to cater theirself so
they can catch up and get the market from the help of technology. Thus, they start to
develop their app, so the consumer can easily get promotion, updates, and ordering their
products. They also accommodate their consumer that came to their store with free internet
access.

Natural environments