Improving Innovation Capabilities Assignment
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Added on 2019-12-28
Improving Innovation Capabilities Assignment
Added on 2019-12-28
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ImprovingOrganizationalInnovationCapabilities
EXECUTIVE SUMMARYIn globalized markets where there is hyper competitive environment, rapid technologicalchanges are occurring in order to bring innovation. In the present scenario, there is shorterproduct and technology lifecycle which is the major challenge that firms are facing. Thus, inorder to sustain their business in the long run, to have innovation in the offered products andservices is necessary as it will increase their lifecycle. Organizations which are having highinnovation capabilities are likely to stay in the market for longer duration with earning profits.This is the reason; maximum firms are paying increasing attention to innovation as it is the keydriver of competitiveness in the global economy. In the present report, there will be discussionon the firm, McDonald’s and the industry, to which it belongs, that is, fast food and restaurantsector. McDonald’s is the world’s largest chain of hamburger fast food restaurants that is servingaround 119 countries across the globe. Restaurant is having 68 million customers with havingmore than 36,000 outlets.McDonald’s has introduced numerous products over the years in order to main in thecompetition and to have competitive advantage over others by bringing innovation in its productsand services. These innovations made necessity for the firm to make several additions in theirmenu items so that it would be able to answer the critics and consumers with respect to theirhealth concerns. The existing innovation of restaurant has impacted its performance to a highextent. There are other trends also which would affect the fast food industry in 2016 and whichfirms in fast food sector are needed to keep in consideration while performing business. Theseare chef-driven fast casuals, micro cuisines, mindful dining, vegetables as the stars and digitaladvances. Thus, by the year 2020 and beyond, McDonald’s is having operational goals, that is,20% increase in energy efficiency of company-owned restaurants, enhancement in energyefficiency through restaurant standards and minimizing waste and increasing the amount of in-restaurant recycling to 50%.There is a gap identified in the existing innovation by McDonald’s and requiredinnovation in future. In order to fill it, firm is required to make strategies from now only so that itcan successfully reach in the year 2020 and beyond and can make attractive profits. Thus, it canbe concluded that to remain in the competition in the long run and to sustain businessproductively, innovation has become essential for the firms in fast food industry.
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Purpose of the report and structure..............................................................................................1THE ORGANIZATION AND INDUSTRY OVERVIEW.............................................................1The Organization and its Innovation History..............................................................................1The Organization’s existing Innovation Performance and Capabilities......................................2The Industry in 2016....................................................................................................................4THE FUTURE OF INDUSTRY BY 2020 AND BEYOND...........................................................5THE ORGANIZATIONS INNOVATION REQUIREMENTS BY 2020 AND BEYOND...........6CLOSING THE INNOVATION GAP............................................................................................7Building the Future Capabilities for the Organization................................................................7CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONPurpose of the report and structureIn globalized markets where there is hyper competitive environment, rapid technologicalchanges are occurring in order to bring innovation. In the present scenario, there is shorterproduct and technology lifecycle which is the major challenge that firms are facing. Thus, inorder to sustain their business in the long run, to have innovation in the offered products andservices is necessary as it will increase their lifecycle. Organizations which are having highinnovation capabilities are likely to stay in the market for longer duration with earning profits(Camisón, César and Ana Villar-López). This is the reason; maximum firms are payingincreasing attention to innovation as it is the key driver of competitiveness in the globaleconomy.In the present report, there will be discussion on the firm, McDonald’s and the industry,to which it belongs, that is, fast food and restaurant sector. Along with that, an overview oforganization and industry will be done with the innovation history of organization and existinginnovation performance and capabilities. In addition o this, performance of industry in the year2016 will be highlighted along with its future in 2020 and beyond. Apart from that,organization’s innovation requirements in 2020 and beyond will be analyzed. After that, theinnovation gap will be assessed in which innovation capabilities for the restaurant will be built. THE ORGANIZATION AND INDUSTRY OVERVIEWThe Organization and its Innovation HistoryMcDonald’s is the world’s largest chain of hamburger fast food restaurants that is servingaround 119 countries across the globe. Restaurant is having 68 million customers with havingmore than 36,000 outlets. It was found in United States in 1940 and began a barbeque restaurant.At present, the organization is either operated by franchisee, an affiliate or the corporation itself.The revenues which this restaurant earns are from the rent royalties and fees paid by thefranchisees (Crossan and Apaydin, 2010). As per the BBC report of 2012, McDonald’s annualrevenue was of $27.5 billion and profits of $5.5 billion. It was the world’s second largest privateemployer behind Wal-Mart in that year. Reason behind same is that it is having 1.9 millionemployees among which 1.5 million of those people who work for franchises. Earlier,McDonald’s was selling hamburgers, French fries, soft drinks, milkshakes, cheese burgers,1
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