The PEST analysis is considered as one of the major strategic analysis of an organization and organizations usually stress a lot on PEST analysis in order to gain success in both the short and the long run. In the similar manner it can be said that the PEST analysis is more related to the Macro-environment that is surrounding an organization and it plays an important role in the decision making process (Paul 2006). Similarly, it is also used in the Strategic Analysis Report (SAR) of an organization. The PEST analysis of McDonalds is given below:
Political: The political aspect of PEST is comprised of all the political elements that are faced by an organization. Usually, they include the employment law, trading policies, taxation, etc. India is quite rich as far as the political structure and policies are concerned that is the reason why international organizations face difficulties when they are entering in India. In the similar manner it can be said that India is a nationalist country that is the reason why they create difficulties for international entrants (Watson 1997). However, there are certain other factors like consumer taxation, different political infrastructures and the scenario of the global market.
Economic: The economic factor incorporates the economic elements that are prevailing in the country in which an organization is operating. Indian economy is growing day by day that is the reason why international organizations are entering in this country especially the preferences of the citizens of India are changing drastically and they are moving towards international fast food chains. However, the economic element of PEST analysis includes factors like inflation, interest rates, exchange rates, economic growth, stages of business cycles, etc. The economic factors for McDonalds in India are the target market is extremely high and the operational cost is extremely low that is the reason why international organizations opt for India.
Social: The socio and the cultural factors incorporate elements like branding, demographics, lifestyle changes, health and welfare. However, the social factors that are associated with McDonalds in India are the suppliers and the workforce of the organization is fragmented and they are diversified. In the similar manner McDonalds have to face the pressure of different social and ethnic groups that are prevalent in the socio culture environment of India. However, the favourable element for McDonalds is that people of India will get employment through this organization and this would be favourable for both McDonalds and the local citizens of India.
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