General environment refers to factors that influence a business but they are beyond the control by the business. These factors affect business operations and performance. Among these factors are demographic factors and political or legal segment. Demographic segment relates to population size, age structure, geographical and income distribution and ethnic matrix. While, political segment entails; laws like antitrust and taxations, regulations on how businesses are conducted and interventions of governments and politicians in business activities (Hitt M, 2019).
In Macdonald demographic segment is analyzed in details since the company is multinational and its success in the global markets depends on several factors in the population. One the population size enables a company to have an estimate of the number of potential clients. If the population size that can consume a certain product is too small, then venturing in such a market is risky. Two, the income distribution within the population enables a company to know which economic class to target. Three, the ethnic mix is important as it determines the product a company can sell to a given population. Take an example of the MacDonald’s Indian market, the larger population is composed of people who hold to Hindu and Islamic beliefs (Kannan S, 2014). This makes the Macdonald to design products that appeals to their culture. For instance, the Macdonald does not offer products with beef and port in that market.
The political or legal segment is concerned with how governments influence firms through laws and legislations. The organizations try to understand how they can remain competitive in presence of those regulations. Organizations study political or legal happenings in order to know how they seize opportunities and deal with threats that come with laws. For example, in India the government protects local businesses from being affected by the foreign companies. This makes foreign companies to meet strict entry barriers. To overcome this barrier MacDonald’s works in partnership with local business people, whereby they form partnership in order to be able to conduct the business (Kannan S, 2014).
The two main forces of competition for Macdonald are threat of substitute products and threat of new entrants. The presence of natural and healthy products that can be used instead of fast foods is becoming adopted in several cultures. This is making clients to shift from MacDonald’s. To overcome this challenge Macdonald now offers cuisines from all cultures that are healthy. As cuisines that are healthy are accepted from one region to another, Macdonald now customizes their cuisines to fit to local preferences. For example, in Indian market what is served is spicy menu to satisfy the local tastes (Kannan S, 2014).
The fast food industry is saturated and new firms still find new ways of entry through differentiation, use of technology, low cost of production, among other ways. For example, when Covid19 became a threat and lockdowns were imposed in many nations, new firms entered the industry using online platforms. The consumers ordered foods on this platform and they were being delivered on their doorsteps. To overcome this challenge Macdonald came up with “My Macdonald App” that allows consumers to place an order that is delivered to their places (McDonald's, 2021). Also, the company partnered with local delivery companies to facilitate delivering of ordered foods to client’s locations.
In Macdonald demographic segment is analyzed in details since the company is multinational and its success in the global markets depends on several factors in the population. One the population size enables a company to have an estimate of the number of potential clients. If the population size that can consume a certain product is too small, then venturing in such a market is risky. Two, the income distribution within the population enables a company to know which economic class to target. Three, the ethnic mix is important as it determines the product a company can sell to a given population. Take an example of the MacDonald’s Indian market, the larger population is composed of people who hold to Hindu and Islamic beliefs (Kannan S, 2014). This makes the Macdonald to design products that appeals to their culture. For instance, the Macdonald does not offer products with beef and port in that market.
The political or legal segment is concerned with how governments influence firms through laws and legislations. The organizations try to understand how they can remain competitive in presence of those regulations. Organizations study political or legal happenings in order to know how they seize opportunities and deal with threats that come with laws. For example, in India the government protects local businesses from being affected by the foreign companies. This makes foreign companies to meet strict entry barriers. To overcome this barrier MacDonald’s works in partnership with local business people, whereby they form partnership in order to be able to conduct the business (Kannan S, 2014).
The two main forces of competition for Macdonald are threat of substitute products and threat of new entrants. The presence of natural and healthy products that can be used instead of fast foods is becoming adopted in several cultures. This is making clients to shift from MacDonald’s. To overcome this challenge Macdonald now offers cuisines from all cultures that are healthy. As cuisines that are healthy are accepted from one region to another, Macdonald now customizes their cuisines to fit to local preferences. For example, in Indian market what is served is spicy menu to satisfy the local tastes (Kannan S, 2014).
The fast food industry is saturated and new firms still find new ways of entry through differentiation, use of technology, low cost of production, among other ways. For example, when Covid19 became a threat and lockdowns were imposed in many nations, new firms entered the industry using online platforms. The consumers ordered foods on this platform and they were being delivered on their doorsteps. To overcome this challenge Macdonald came up with “My Macdonald App” that allows consumers to place an order that is delivered to their places (McDonald's, 2021). Also, the company partnered with local delivery companies to facilitate delivering of ordered foods to client’s locations.
