QUESTION ONE [30] Read the case study below and answer the questions that follow. You remember sitting in the back seat, bouncing around, waiting to see those familiar Golden Arches come into view. You couldnt wait for your Happy Meal because it truly was the source of your joy. And then, once the nuggets were clamoring in your stomach, youd immediately rip into the toy, hoping it wasnt that dumb one all your friends had. McDonalds is still a magical place for children. But adults? Not so much. The growing desire to be and eat healthy doesnt mix well with McDonalds offerings. This fast-food joint, located all over the world, is as well-known as it is ostracized. But why is that? Like any other restaurant, McDonalds must comply with health and hygiene regulations. If their food doesnt abide by a certain code, they would be shut down. Their employees must also adhere to all food and health laws while working in any given location. Fast food shops are feeling governmental pressure because of the high amounts of sodium and sugar pumped into their menu. Sugar and sodium are linked to many common health diseases like type 2 diabetes, hypertension, and heart disease. Consuming too much of these foods can lead to obesity, stroke, and heart attack. As a countermeasure, McDonalds is now offering new healthy addition to pre-existing food choices. For instance, you can now add additional protein to their fruit smoothies. Adding alternatives is one way to respond to changing public health agreements, but it could also increase their operating costs too. McDonalds is also affected by the government tensions between countries. For instance, the United States relationship with the United Kingdom has been strained as of late. And communication with Russia may be questionable. Even though they have restaurants located all over the world, McDonalds is an American company. Complications amongst governmental parties could shift current trade agreements, creating a hostile environment for McDonalds to function overseas. Its not only the United States economy that affects McDonalds success. The economy of each country they operate in ultimately affects their results. They must decide whether its a smarter decision to purchase raw materials locally or to ship them in. The number of tariffs for imported resources and foreign incorporation taxes plays a vital role in this decision. In 2008, McDonalds took a financial hit from the economic recession. Disposable income was at an all-time low while people scrambled to find new jobs. Since then, McDonalds brand image has taken a hit due to an increase in health consciousness among consumers. Many fast-food restaurants are adding healthy options to their menu while trying to shed their junk food image. But its hard and expensive to change the opinions of the public. Additionally, McDonalds should factor in the unemployment rate of each location theyre in. The company is known for its high turnover rate, meaning they hire and lose workers on a consistent basis. Its a known joke that McDonalds is always hiring but this can be a glimmer of hope for locations with high rates of unemployment. Consumers obsessively scrutinize what theyre putting into their bodies. Were seeing a rise in low-carb and low-sugar diets. People are jumping on the intermediate fasting bandwagon. Why? Because theyre seeking ways to strengthen their bodies without sacrificing health. Unfortunately, McDonalds menu doesnt comply with these demands, making them as a less desirable option for health-conscious adults. McDonalds is trying though. You can swap out high sugar ingredients in their drinks for a low-calorie alternative. And, as mentioned above, theyve recently come out with high-protein smoothies. However, consumers are still complaining about the high sugar content in these drinks. Overseas, fries and hamburgers dont cut it. People in Asian countries, for example, are used to eating their local cuisine. Although hamburgers and fries can be nice to have once in a while, it might not be the first-choice option for international audiences. While McDonalds has offered localized menu options in countries like Japan and Canada an opportunity they should take advantage of more often it can be a costly endeavour for the company too. McDonalds needs to shed its unhealthy image to move forward with the growing food trends. It wont be easy. But its necessary if they want to survive among other fast-food companies who are reshaping their menu for their customers. McDonalds has recently upgraded their menus with flashy television screens hanging from the ceiling behind their cashiers. They also use their website to showcase nutritional information. In some locations, you can order your food online, allowing you to stroll in and grab your meal without waiting in line. Theyve also remodelled their stores as a means to rebrand their image. Many McDonalds now have a new set of paint, chairs, and tables to match their fancy flat screen menu displays. They also provide free Wi-Fi to encourage more customers to order and stay. But, as the old joke continues, their ice cream machine is still down more than its ever up. McDonalds is also active on social media. They use Facebook and Instagram ads to nab their customers attention with their new or returning offerings, like their summer hit, the McCafe Vanilla Chai Frappuccino. Although McDonalds is incredibly well-known (and needs a little introduction), not capitalizing on social technology will only give their competition the advantage. Adapted from Frue,2018 Conduct a PESTLE analysis of McDonalds. You are required to discuss the key factors that may affect its business with the use of appropriate examples from the case study above.