Environmental scan for McDonalds Company Term Paper

Environmental scan for McDonalds Company - Term Paper Example Environmental scan for McDonalds Company This paper seeks to conduct environmental scan for McDonald’s Company and General Motors Company. One of the organization’s internal environmental factors is its human resource strategy that has a specialized training program for its personnel. The company makes significant investments into this initiative to develop a strong human resource base for efficiency and effectiveness towards a quality driven competitive advantage. The company also has acculturated quality production that has established its admiration among consumers who are satisfied with the organization’s products. Similarly, the organization, in its management and operations, is dynamic and flexible to different cultural needs across its diversified market. As a result, the company is able to meet its customers’ needs and expected utility. The organization also operates under strict food safety policy in which raw materials are only accepted into production processes if they meet safety standards (Marketing, 2012). A number of challenges also characterize its internal environment. The company f or example faces a high employee turnover leading to more investment in recruiting and training new employees. Such a high turnover rate also destabilizes implementation of policies and organizational culture that has to be continually reinforced. The organization’s profitability has also been unstable and therefore unpredictable. This means that long-term financial plans cannot be established with certainty because it is difficult to obtain a reliable forecast of the organization’s profitability (Marketing, 2012). External environment External environment refers to factors that emanates from outside the organization and which the organization has no power to control. McDonald’s external environment includes political factors, economic factors, technological elements, socio-cultural aspects, physical environment, and competition among other factors. Political factors define to rules and regulations that control the organization in its operational localities. Bei ng an international organization, McDonald’s is subjected to different local laws and international regulations that shape its operations. As a result, the management should be informed of the laws and political systems in regions where the company’s branches operate. It should also be flexible to adjust to any changes in regional laws that will affect its subsidiaries (Vrontis and Pavlou, 2008). The organization’s economic environment defines demand for its products and trends in consumers’ spending habits. It is therefore susceptible to general economic trends such as recessions, periods within which the consumer’s economic potentials are constrained leading to low demand. Economic recovery periods however improve demand towards higher profitability levels. The company, through its subsidiaries operates under different economic potentials across regions. This affects pricing strategy of the company’s products and defines profitability acro ss different regions. Successful international venture however indicates the company’s success in implementing technology towards communication and coordination of its activities across geographical barriers. Application of technology also explains the organization’s standardization in its subsidiaries such as the franchises. Similarly, social and physical environmental factors are variables across the company’