Chick-fil-A: PESTLE Analysis
Chick-fil-A: PESTLE Analysis Free Essay
Methodology
To find out whether the decision to start operating within Canada is a good choice for Chick-fil-A, it is significant to find out in what way this county differs from the USA. PESTLE analysis is the best approach to satisfy this need since it provides an opportunity to reveal what factors of the external marketing environment affect the company:
· P – Political. The influence of government and politics on the restaurant sphere and foreign trade would be discussed. Attention would also be paid to policies and laws that can restrict the operations of Chick-fil-A.
· E – Economic. The profitability of the restaurant business depends on the income of the population, the economic growth of the country, and associated elements that affect the management of demand and the way people spend their incomes.
· S – Social. The diversity of the population and its attitudes influence the prosperity of the business.
· T – Technological. Marketing and management can be influenced by the development of new production, distribution, and communication approaches.
· L – Legal. Each country has its trade regulations, and they cannot be ignored.
· E – Environmental. A business has to be managed ethically and sustainably to appeal to clients.
Based on the obtained information, it would be possible to identify those threats and weaknesses that are to be addressed before launching a new restaurant.
Findings
Political
Canada is a powerful country, which means that it has a good opportunity to develop healthy international relations. Being a member of the United Nations, it receives a chance to ensure that it is focused on peace and security, thus expressing no threat to other nations (Frue 2018). Given this, Chick-fil-A can be not afraid of facing hostile treatment, which can be supported by the fact that another American fast food restaurant chain, McDonald’s, has successfully expanded throughout this country. In addition to that, Canada practices democracy and has a stable political situation. Given this, Chick-fil-A is not likely to be adversely affected.
Canada has rather liberal international trade policies, so the company should not be afraid of facing issues due to foreign trade and exchange restrictions. Ordinary goods do not even require import licenses, which allows American restaurants to develop in Canada without any critical complications. Both countries have friendly relationships, which provides them with an opportunity to benefit each other. The only barrier that raises concerns is the agricultural business and farmers. However, they do not have any significant influence on the operations of Chick-fil-A. Current policies encourage Canada’s population to buy healthy foods. Given this, some restaurants, including McDonald’s, are required to reveal the number of calories in their offerings. Nevertheless, it is not a limitation for the development of the restaurant business but a requirement that has to be met for legally right operations.
Economic
Canada is among the top economies of the world, which proves that it can provide a stable environment for the development of Chick-fil-A. Moreover, it has signed a free trade agreement with the USA, which means that these countries agreed to support each other, and the business is not likely to face any critical obstacles (The Heritage Foundation 2018). A highly developed mixed economy also ensures that the privately-owned Chick-fil-A would not be a stranger among state-owned enterprises. What is more significant, the restaurant is expected to deal with only $11,400, which is extremely cheap in comparison to other restaurants since McDonald’s pays about $1 – $2 million for a startup with a $45,000 franchise fee and almost the same is for Taco Bell (Peterson 2018). In addition to that, Chick-fil-A would have an opportunity to minimize costs associated with the transportation of ingredients since it is going to purchase them locally, even though the same menu as in the USA would be offered. Such opportunity is obtained due to the availability of similar products in the USA and Canada. Finally, it is vital to consider the fact that the targeted country continues to experience economic growth, which allows its population to spend money not only on the most vital purchases but also on those things that appeal to them such as fast food (The Heritage Foundation 2018). Because of this, there would be no complications associated with the lack of clients.
Social
Canada is a large country, and even though its population is not rather dense, it is very diverse. A flexible immigration system encourages skilled workers to come to the country (The Heritage Foundation 2018). Before finding a well-paid job and developing a stable position, many of them prefer eating in fast food restaurants since this option is affordable. In addition to that, foreigners who have different traditional cuisines are often afraid to try something new and require some time to get used to new foods. However, fast food is the same all over the world, which makes it a favorable option.
Canada is also focused on education. As a result, numerous students come to the country for studying (Frue 2018). Many of them have to pay for their education or obtain a limited scholarship. In addition to the lack of free time and willingness to cook, this fact makes them prefer eating in fast food restaurants. To support this point, it can be stated that a majority of the Canadian population is represented by low- and middle-class individuals who can afford fast food regularly unlike healthy products that are rather costly. Nevertheless, Canada, just like many other developed countries, encourages its population to prefer healthy foods. As a result, even McDonald’s offers some salads, which allows it to appeal diverse needs of its clients.
Technological
The country is among the leaders in technology and science development, which affects its food industry. For instance, the online presence of various companies is considered to be almost obligatory since it enhances clients’ ability to find information about them and their offerings (Frue 2018). Many restaurants also provide an opportunity to deliver purchases ordered online to customers’ homes. Lots of people appreciate this option and use it regularly. In addition to that, some restaurants, including McDonald’s, make it possible for their clients to use self-ordering kiosks. As a result, people decide what they want to eat and pay for the order without standing in a long queue. Given this, it is possible to reduce personnel’s load and make clients’ experiences more pleasant. In addition to that, it is possible to use big screens in the restaurant to reveal its menu and make it easy to see. Some special offerings, new products, and the most popular dishes can be advertised in such a way.
Legal
The country protects its population and develops regulations that have to be thoroughly considered by Chick-fil-A. For instance, the employee’s hours of work are concretized to ensure that people are not overloaded and can perform their duties appropriately. Children are not allowed to work full day since it affects their ability to accomplish compulsory education. Moreover, they are not knowledgeable enough to make sure that their rights are not violated. Hence, parental agreement and work permits are obligatory for the youngest. A provision of full-time and part-time options, as well as schedules that can be altered according to the employees’ demands, are recommended. Such an approach is used by McDonald’s, and it benefits this restaurant chain significantly.
All employees in Canada have to receive at least a minimum wage, which ensures that companies do not pay just as much as they want. It is vital to allow them to have sick days and vacations as well. Dismissal regulations are also present, but they do not differ much from the US (Finkelstein 2018). Moreover, discrimination should affect neither hiring processes nor employees’ duties. It is also important to consider the fact that Canada offers various options for doing business, which allows Chick-fil-A to operate within it without making any significant alterations.
Environmental
Canada cares for human rights and prohibits discrimination. Hence, its restaurants have to consider the needs of diverse populations, which can be ensured by offering a wide range of products that can be consumed not only by adults but also by children (Finkelstein 2018). For instance, McDonald’s offers carrot sticks instead of fries in its Happy Meal. In addition to that, there are some options for vegetarians, which benefits the population.
The country encourages environmentally friendly practices. Because of this, the packages should be recyclable, and the use of polyethylene has to be limited. The majority of fast food restaurants use paper packages for their products, which means that they are less likely to harm nature. In addition to that, it is significant to consider their shapes since some animals may stuck in them. Air, water, and earth pollution also have to be addressed by restaurants. The wastes should be properly utilized to ensure environmental safety. Cooperation with the waste-disposal organizations may be needed because of this. However, no specific restrictions that create challenges for the development of the fast food industry exist in the country. Hence, it can be stated that Canada’s environment is appropriate for Chick-fil-A.
Conclusions
Canada offers a favorable environment for Chick-fil-A to develop and expand globally. It allows the company to operate within familiar legal regulations, thus offering a stable political and economic situation. The country has a diverse population, which is a good start for globalization since Chick-fil-A can find out how to appeal to various needs and demands of its targeted markets. Nevertheless, particular areas require special attention from Chick-fil-A. For instance, it has to use advanced technology to appeal to clients and compete with other fast food restaurants.
Recommendations
Based on the discussed information, the following recommendations can be developed for Chick-fil-A if it expands within Canada:
· To be politically neutral to avoid problems caused by governmental or public dissatisfaction.
· To purchase local ingredients to avoid transportation costs and possible fees and complications that may occur at the border.
· To offer a diverse menu, thus ensuring that all clients can find something to their liking.
· To develop affordable prices to become competitive.
· To use big screens to show menu and emphasize specific offerings.
· To be present online (consider both personal website and social media).
· To use self-ordering kiosks in case of numerous clients instead of hiring more personnel.
· To follow Canada’s regulations considering employees’ work (focus on minimum and maximum hours and wages, vacations, and days off).
· To use environmentally friendly packages and cooperate with waste-disposal organizations.