Juan Ignacio Wurst


Task 1) Mc Donalds? PEST Analysis in emerging markets. E.g. Argentina


When we talk about Business Analysis, a usefull tool to understand how an organization operates is

the PEST Analysis, previosly knwon as ETPS Analysis according its author, Francis Aguilar, who in

1967 released the novel “Scanning the Business Environment“.

This is an “analysis of the politcal, economic, social and technological factors in the external

environment of an organisation“ (Jurevicius, 2013) used to identify possible problems, needs,

failures as well as opportunities that might affect the companies.

What I?m proposed to achieve with this notes is a practical example of the possible external

influences that a hugh and well knwon company like Mc Donalds may have in a risky and volatile

environment like the emerging markets. In this case, the information was collected only for one

country: Argentina.


-Government inestability. Elections due in October 2019. Candidates haven?t presented a formal

proposal yet. High level of uncertainty

-High level of corruption: a) Lately ex-president Cristina Kirschner was involved in various

scandals and was called to defend herself in court.

Rumors confirmed she will be a next candidate.

b) „Panama-Papers“: many companies where involved in misconduct linked with some members of

the government.

-Tax policy: a) Since 01/01/2019 all companies who pays dividends and increase their shares need

to pay 7% extra-taxes.

b)Individuals must pay 10% of extra taxes due their revenues in stock market.

-Tarifs: Because of the high inflation (2018: 40% year-to-year), was settled that Utilities companies

are allowed to increase the prices.

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-Education law: still good, with free university education.

-Data protection law: there?s no an explicit law who cares about specifications of the contents in the



– Growth Rates: Economists project -1,5% ungrowth

-Inflation: 2018: 40% year-to-year. 3 Months 2019: 7,5% accumulated.

-High level labor costs: unions are strong and aware about inflation. In average unions propose 35%

increase of the salary (negotiations still open)

-Unemployment: 2018: 10% (but great increase of public employment year-to-year 35%)

-Monetary Policy: higly restrictive. Interest rate average 58%.

-Downward stock market trend: S&P MERVAL -9,9% 2018

Juan Ignacio Wurst


-High level of consumers? disposable income in sector Beverages and Foods


-High Education level in the main cities

-Possitive attitudes toward imported goods and services

-Lifestyle: Mc Donald is popular and conected with a sensation of happyness.

-Buying habits: a)it?s cheap and the cafeteria extension in stores captured the essential of the

culture: locals stay long when eating o drinking a sundae or coffee.

b) Hence, take away, is not the core business.

-Population growth 3% in 2018 year-to-year


-Many displaces had been developed to orden in stores

-New systems were settled by the delivery: nowadays it?s faster.

-Free WiFI in all stores

-Good online marketing campaigns

Conclusions :

According the information, Argentina is not the best place to invest in this moment. Because of its

political and economic crisis (ungrowth, inflation and corruption) is really difficult for companies to

increase their profits. Particulary, for Mc Donalds, who survive to many crisis in this country could

be an opportunity that consumers didn?t change their habits.

How ever PEST tool can be usefull for some managers who are not aware about the current

situation in Argentina, it?s not enough. This analysis must be complemented with other tools and

analysis. Business Analysis should consider to gather internal and external information such as

SWOT Analysis, Monitoring processes and other financial indicators like ratios to track how is the

performance of the firm due the political, economic and social circumstances.


Argentinas? Central Bank B.C.R.A. (2019). Statistics. [online]. Available at:

(Accesed 01/04/19)

Instituto de Estadisticas y censos I.N.D.E.C. (2019). [online]. Available at:

Juan Ignacio Wurst


(Accesed 01/04/19)

Jurevicius, O. (2013). ‘PEST & PESTEL Analysis‘. Strategic Management Insight, 12 February

[online]. Available at:

(Accesed 01/04/19)

Trading View Charts (2019). ?S&P MERVAL Argentina Index?. [online]. Available at:

(Accesed 01/04/19)

Weberience LLC. (2019). ?PESTLE Analysis? [online]. Available at:

(Accesed 01/04/19)


Task 2) Within the above article the CFO of Wolters Kluwer is quoted as saying that

uncertainty is good for business. To what extent do you agree with this statement?

I personally think that the statement of CFO of Wolters Kluwer is accepted nowadays. Uncertainty

is part of our life. Of course it extends into business. External and Internal (within the firms)

variables impacts in business. Firms need to confront uncertainty in the best way and challange

uncertainty with strategic resources, such as good products and services and a top-disruptive

management team as well. According to Georg Ludviksson, CEO of Meninga “ Firstly, we diversify

our income source by pursuing business in many different countries and regions. Secondly, we maintain a

substantial cash buffer to be able to withstand shocks. Thirdly, we stay agile and able to quickly adjust to

new business realities, and fourth and finally, we show leadership by keeping calm and not overreacting,

even when things are changing all around you“ (Forbes, 2019, Alison Coleman).

But it looks like uncertainty is so abstract. In order to try the understand this concept, scientists tried

to find other explanations to define it. In finance, for example, take place as risk an d how affect to

interest rate. According to Gallagher & Andrew (1999:31-32) risk in lending can be seen as default

risk, liquidity risk and maturity risk. Economists study the choise of firms and consumers under

uncertainty „by considering a setting in which alternatives with uncertain outcomes are describable

by means of objectively known probabilities defined on an abstract set of possible outcomes“. Mas-

Collel et al (1995:167-168).

That?s why in social sciences is really common to prepare scenario planning and to use statistical

knwoledge to measure uncertainty by model building, estimating and predicting. More further

uncertainty can be found in data. Econometricians use the regression model analysis in order to

measure the variation between two or more variables,in which the error term or disturbance implies

all that variation that the model cannot explain itself. „This variation probably comes from sources

such as omitted influences, measurement error, incorrect functional form, or purely random and

totally unpredictable occurrences“ (Studenmund 2006:10).

Juan Ignacio Wurst



Forbes (2019). Why Uncertainty Means Just One Thing To Entrepreneurs: Opportunity. Alison

Coleman. Available at:


(Accesed 01/04/19)

Gallagher, T. and Andrew, J. (1999) ?Financial Management. Principles and Practice?. Part One the

World of Finance, pp. 31-32. Prentice Hall. Upper Saddle River, New Jersey 07458.

Mas-Collel, A. Whinston, M. and Green, J. (1995) Microeconomic Theory . New York Oxford

University Press.

Studenmund A.H. (2006) ? Using Econometrics . A practical guide?(5th ed.). Part I: The basic

regression model, pp. 10. Pearson International Edition.

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