Firstly, These all affect the ability of

Firstly, I will discuss the external factors which could influence McDonalds and Oxfam; the factors I will discuss are political, economic, social, technological, legal and environmental.

External factors are circumstances or situations outside the business that impact the business.  These factors include social, political, technological, environmental, legal and economic issues. Political factors are factors which involve the governmental activities.

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An example of a political factor which may influence a business is the minimum wage enforced by the government. The minimum wage enforced in Britain by the British Government may be lower or higher than the minimum wage enforced by the Spanish Government in Spain. This could potentially mean that a McDonald’s employee in Britain earns than a McDonald’s employee in Spain.  This potential wage problem is usually not encountered by national fast food restaurants like burger king which does not have employees in more than one country. Another example of a political factor that may influence McDonald’s business dealings is the tax system imposed by the government on businesses.

If the tax system operative in Britain is different from the one in America, it becomes challenging for an American company like McDonalds to compete with a British food company like subway.Economic factors are factors which relate to changes such as costs and prices of goods, interest rates, wage rates, exchange rates and the rate of inflation. These all affect the ability of businesses to generate profits and need close monitoring. An example of an economic factor which would influence McDonalds is exchange rates, because if the exchange rates go up, because of Brexit or economic. Recession worse-off, than McDonalds would have to charge more but keep their customers happy.

Also, if the exchange rates go down, then they would charge less which could bring more customers. Another example of an economic factor is the price of goods, if a certain material has gone up in value, and then they would charge more. This would affect McDonalds because they would have to change their prices, to the value their goods have gone up or down in but keep their customers happy. Social factors are factors which are things that affect lifestyle, such as religion, wealth or family. It is important for businesses to be aware of these factors as they change because it is a very important component in proper marketing. An example of social factor which influences McDonalds is a newsletter which could contain exclusive offers, this is because they are interacting with the customers and making them feel more part of something, but they are still advertising their company to get more recognition from people. Another example of a social factor is McDonald’s social media platforms; they can advertise their company on social media which will enable them to get more recognition, this means that they can get more customers. This will have a positive influence on McDonalds as it generates the company’s popularity.

 Technological factors are factors which Influence or impact an organisation’s operations related to the equipment’s used within its business operation   An example of a technological factor which influences McDonalds could possibly be their website; given that people order off other companies like Uber eats every day to get their food. If the app then closes, the Company would lose a lot of their income as people would not be able to buy their food online; this would have a negative impact on McDonalds. Another example of a technological factor which impacts McDonald’s is the advancement in the ingredients equipment.

Over the past 100 years, there has been a demand in food making has seen a dramatic change due to advancements in manufacturing equipment.  However, because of the nature of popular food companies such as McDonalds, technological factors hardly have a major impact on their activities. Legal factors are factors that concern the way the law influences a company’s operations.

  These factors include health and safety, equal opportunities, advertising standards, consumer rights and laws, product labelling and product safety. Businesses need to know what is and what is not legal to trade successfully. If an organisation trades globally, this could be complicated because each country has its own set of rules and regulations. An example of a legal factor which influences McDonalds could be the employment law that every business is expected to abide. The employment law dictates how a company’s employees should be treated. This could potentially impact McDonalds negatively because minimum wage laws can limit the various employment possibilities a company can offer. Another example of a legal factor which influences McDonalds are discrimination laws. These laws are regulations which businesses have to abide by and it protects people from discrimination (race, sex, gender reassignment, disability, religion or belief, sexual orientation, marriage or civil partnership, pregnancy and maternity).

This also has a potential negative impact on McDonalds because it makes firing employees more difficult. Environmental factors are factors relating to how diverse types of the physical environment features impact a company’s dealings.  Examples are consumer health, climate change, the availability of energy, or any direct consequences of these things.

An example of an environmental factor which influences McDonalds is climate change. This has a positive impact on McDonalds because customers would request a high demand of beverages suitable for a weather e.g. winter.

Customers would want to buy coffee in the breakfast menu at McDonald’s to keep them warm. Since companies are expected to cut down on energy use because of climate change, a business outlet like McDonalds could see a reduction in production or improvisation in harnessing energy, which may have a negative impact on the company’s operations.


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