E-Business Applications for McDonald's: Advantages and Challenges

This report discusses the advantages and challenges of McDonald's adoption of E-business applications, including the use of online platforms to attract more customers and minimize operation costs. It also recommends measures to safeguard the security of the company's systems and improve transaction efficiency.

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E-Business Applications
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Contents
Introduction.................................................................................................................................................2
Report.......................................................................................................................................................... 3
Recommendation and conclusion................................................................................................................7
References...................................................................................................................................................9

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Introduction.
McDonald is an international operator and franchisor of quick-service restaurant offering
food items like soft drinks, breakfast menu, coffee and other beverages (Edward 2010, P. 68).
This restaurant was started in 1940 in California, United States. By 30th June 2017, McDonald
had more than 30000 branches worldwide. This restaurant offers products according to the
culture of the region in which it is situated (Hussein 2010, p. 48). During the year 2017, it was
rated the tenth largest brand worldwide outdoing its immediate competitor Starbucks with over
$20 billion. McDonald is one of the highest contributors to the government revenue with over
$10 billion per year. This is because of the many innovations which they have introduced
including selling their products online hence attracting a large number of people. This online
business has made their customers buy products whenever they want without necessarily visiting
the stores. McDonald argued that it should be classified as a food retailer because many of its
products are pre-packaged and sold to its customers in form of a supermarket rather than a
restaurant. This enabled them to pay 10% on its profits instead of 18% taxed on restaurants
(Kshema 2016, p. 37). McDonald not only compete for cheap and quality products but also to be
the leading source of media so that their customers can buy products whenever they want
through any platforms appropriate for them.
Report.
To enhance customer experience and also to survive in the competitive environment, this
company has been undertaking extensive research to identify the changes in consumer
perceptions. With the recent adoption of technology, McDonalds has realized that there is an

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opportunity for the company to venture in E-business in order to attract more customers.
According to Clair & Andrew (2018, p.79), E-business entails the sharing of information through
online platforms. To succeed in this form of business, McDonalds has partnered with various
organizations to come up with EatUber which enables its customers to access the products
irrespective of their geographical locations.
According to Stephen (2012, p. 94), Operation strategies play an important role in
achieving organization’s goals. Managers of McDonald have worked tirelessly in making their
products fast available to their customers at a low price but get profit by reducing the cost of
production and expanding worldwide. The aim of this restaurant is not only to become the
biggest fast-food chain but also the finest (Achyut 2016, p. 78). The innovation of online shops
has made many companies to shift from brick and mortar strategy to using online platforms to
conduct their businesses. These are business serving their customers in a building unlike online.
Though most companies have developed a mixed reaction about these online shops McDonald
has maintained in operating both hence maintaining their customers (Clair & Andrew 2018,
p.79). This is because there are customers who prefer online shopping because they say it’s
faster, saves money and more informative. Others say shopping in stores is better because there
is physical interaction with the products and returns are easy. Therefore management at
McDonalds has come with a way in which they combine the internet with their in stores sales to
give customers their best in the world.
Though this technology has brought many positive changes within the business, brick
and mortar business also have some advantages over them. One of these is that in bricks and
mortar there are multiple methods of payment where customers can use cash, cards unlike online

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where one only uses cards. According to Achyut (2016, p. 76), businesses with multiple modes
of payment are able to generate more sales than those with only one. Another advantage of brick
and mortar is that there are high chances of customer’s interactions hence creating a business
network. Employers also have direct contact with the customers and this helps in getting
opinions about the products they are offering from their mouths.
Online business has also enabled the company to minimize its operation costs (Clair &
Andrew 2018, p. 80). Since many people are getting the information about the products and
request the same through the media, the company don’t waste their time and resources to serve
long queues or organizing campaign to create awareness. It has also helped the business in
cutting the cost of manpower (Mahesh 2010, p. 80). This is because most of the businesses are
done online and does not require a lot of workers. According to Nir (2010, p. 85) technology
have played a great role in business expansion and growth. It is through technology in which
McDonalds has thrilled in many regions.
On the other hand, technology has made operations at McDonald more effective and
efficient. For example, the introduction of the stock control database system has enabled the
management to avoid making unnecessary stocks and also keeping stock up to date (Peng &
Yijun 2014, p. 56). This system has also made ordering of new stock easier and helped
management in knowing which product is moving faster than the other. This is important
because it enhances customer satisfaction for they are able to get what they need without delay.
According to Lip-Sam & Lim (2011, p. 37), customers satisfaction is the one of the most
important factors for business success. The new technology has also enabled them to gain new
ideas on how to operate the business. Through online business, McDonalds has gained good

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brand image across the world hence making it the fastest food supply with quality products at
fair prices.
Though online business is seen as the most effective way of operation, it can also be a
threat to a company. This is whereby intruders hack company systems to know their operations
and also give misleading information to their customers (Hyma 2015, p. 25). Hacking is common
in business and therefore managers should come with innovative ways in which to prevent their
systems. Though this is common to many organizations, McDonalds has introduced security
measures to prevent their systems from being hacked (Joseph 2010, P. 45). One of these ways is
installation of a web application firewall. This application filters all hacking attempts and also
prevents all unwanted information from going through. They also use strong passwords to their
computers and keeps changing them frequently. According to Stephen (2012, p. 93), security is
very important in a business because it prevents leaking important information to the
competitors.
According to the video provided, technology has taken its roots across the world and
most people today are exposed to cell phones and other media platforms. McDonalds has taken
an advantage of this technology and invented various ways of operations to ensure it keeps
customers loyalty and also maintain its market share (Clair & Andrew 2018, p. 79). For example,
it has developed a platform whereby customers give their views about their products and also ask
questions in regards to them. From the views, the managers are able to predict customers’ needs
and come up with ways of implementing them. Through this platform, customers also rate the
products and this helps the managers know if they are meeting their expectations. According to

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Kshema (2016, p. 37), it is good to give customers space to express their views and this enables a
company to improve on its products.
Due to the steep competition between McDonald and other industries like Starbucks, this
retail shop have engaged into various operational activities which not only enable them to
produce quality products but also unique at fair prices (Heshan 2010, p.67). For example, the
management has purchased modern fryers which fries chips in the shortest time possible. They
have also allocated professional staffs to operate them to ensure they produce quality products.
They also get most of their products ready from the headquarters and this has enabled them to
maintain the same quality in all stores. This has also reduced production and storage costs. To
ensure that they keep their systems updated to avoid failing their customers, they have
maintained a good relationship with their suppliers who take the shortest time in delivering.
According to Jing (2014, p. 79), establishing a good relation among the workers and other
stakeholders is a crucial because it enables a company to attain a competitive advantage.
At first, McDonald was reluctant in embracing this online business but adapted slowly
due to many advantages associated with it. This retail shop first operated as a brick and mortar
where customers had to visit the stores (Jaehun 2015, p. 55). It believed that physical
presentation was better than online because customers had direct interactions with the products.
After they introduced the online business they were able to increase their sales by more than 10%
and this pushed managers to come up with innovative ways of making this technology a success.
They improved on their systems where customers find it easy logging in whenever they want to
buy products. This is because customers like reliable online platforms and may shift to other

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industries with fast speed. According to Pejic (2018, p.40), creativity and innovation are key
factors to high productivity.
Recommendation and conclusion.
Although McDonald is among the leading companies in the fast food industry, it should
not be reluctant in improving in its business operations because of the upcoming competitors.
Adapting this online business not only makes their products known worldwide but also make
work easier for the customers because they are able to get products whenever they want at
whatever place. This also enables them to retain customers who like switching off to the newest
technology and feel going to the stores is a waste of time and money. To make this online
business a success, managers should come up with measures to safeguard their security. They
should keep on updating their system to minimize the chances of being hacked. They should also
ensure there are passwords in all their computers to prevent the important information being
tampered with. The company should also improve on security measures in order to keep
information about their customers safe. This is because hackers can use this information to attack
customers which may bring bad reputation of the company. This can also reduce costs associated
with cybercrimes which affect the profits of the company.
McDonald should also improve on their systems to ensure that transactions run smoothly.
This enables work more efficient and serving many customers within the shortest time. It also
boosts the morale of customers and keeps them updated about the products. This also ensures
movement of information to the targeted people move faster. According to Pejic (2018, p.43),
any company wishing to do well in advertising its products online and make them known
worldwide should have an effective and updated systems.

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Though there is a smaller percentage of people who think that visiting store is better than
online, managers and employees of these stores should educate them on the importance of
buying online. They should explain to them that this would not only save their time but also
money which they could have invested in other things. They should also ask them what makes
them prefer physical buying other than online and through their opinions, managers should
improve on their online services. For the example, the managers should give a clear information
about a product in a way it leaves no doubts or questions to the recipient. Most customers prefer
brick and mortar stores because they think they get better information from store attendants than
online.
It is therefore concluded from both the article ‘the future of retail store-what does online
mean for bricks and mortar’ and video provided that online business has led to growth and
expansion of McDonald .It has also enabled it cover a wide range of customers and also
developed a good brand image due to its quick delivery of products.

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References
Achyut, T. (2016). Keep Calm and Carry On: A Crisis Communication Study of Cadbury
and McDonalds. Management & Marketing, 11(1), 76-98.
Clair, S & Andrew, S. (2018). Digital Disruption 'Syndromes' in a Hospital: Important
Considerations for the Quality and Safety of Patient Care during Rapid Digital Transformation.
Australian Health Review, 42(3), 78-80
Edward, C. T. (2010). Adopting E-Business in Small and Medium Enterprise. Communications
of the IIMA, 10(2), 67-98.
Heshan, S. (2010). Transferring Attributes of E-Commerce Systems into Business Benefits: A
Relationship Quality Perspective. Journal of Electronic Commerce Research, 11(2), 65-70
Hussein, F. (2010). A Fuzzy Logic Based Decision Support System for Business Situation
Assessment and E-Business Models Selection. Communications of the IIMA, 10(4), 45-50
Hyma, G. (2015). A Preliminary Study of First-Mover Advantage among E-Commerce
Companies in India. IUP Journal of Business Strategy, 12(3), 21-32
Jaehun, J. (2015). Roles of the Buyer's Trust in Seller in Posted-Price Model of Consumer to
Consumer E-Commerce. Journal of Theoretical and Applied Electronic Commerce Research,
10(3), 54-56
Jing, W. (2014). Opportunities and Challenges of International E-Commerce in the Pilot Areas
of China. International Journal of Marketing Studies, 6(6), 78-80
Joseph, O. C. (2010). E-Business Enabled ERP II Architecture. Communications of the IIMA,
10(1), 45-50

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Kshema, J. (2016). Digital Literacy Matters: Increasing Workforce Productivity through
Blended English Language Programs. Higher Learning Research Communications, 6(4), 34-45
Lip-sam, T & Lim, H. (2011). Estimating the Determinants of B2B E-Commerce Adoption
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Mahesh, G. (2010). The Enabling Role of E-Business Technologies in Strategic Operations
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Nir, K. (2010). Normative and Cognitive Institutions Affecting a Firm's E-
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Peng, Z & Yijun, X. R. (2014). How Investors Value Industrial Policies for E-Business Firms in
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Stephen, E. B. (2012). The Legal Environment of Romanian E-Commerce: A Critical Analysis
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