Innovation and Entrepreneurship in Tourism and Hospitality

This report analyses the innovative planning and implementation of strategies that McDonalds made in recent years for expanding its profit. The key focus of the company was the introduction of kiosk machine and customising the menus. This initiative was taken to increase customer satisfaction and also to rebrand the identity of the company.

Running head: INNOVATION AND ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY
Innovation and entrepreneurship in tourism and hospitality
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1INNOVATION AND ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY
Executive summary
The subsequent report deals with the concept of creativity and innovation. The main focus is
made in the innovative planning and implementation of strategies that McDonalds made in
recent years for expanding its profit. The key focus of the company was the introduction of
kiosk machine and customising the menus. This initiative was taken to increase customer
satisfaction and also to rebrand the identity of the company. The report deals with
McDonalds initial stage of introducing the innovative technology and how it paved the ways
for the fast food industry.

2INNOVATION AND ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY
Table of Contents
Introduction................................................................................................................................3
Defining the challenge...............................................................................................................3
Exploring the situation...............................................................................................................3
Generation of idea......................................................................................................................4
Designing potential solutions.....................................................................................................5
Implementing solutions..............................................................................................................5
Conclusion..................................................................................................................................6
References..................................................................................................................................7

3INNOVATION AND ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY
Introduction
McDonalds is one of the leading fast food chain that has expanded across the globe.
This leading fast food chain has gone through a lot of changes over the period and have also
adapted itself with the advancing technologies. The company that has its headquarters in
United States has an expandable amount of popularity worldwide. In the following discussion
the establishment of innovative idea taken up by McDonalds will be analysed thoroughly.
Defining the challenge
In recent times the company has faced major challenge in keeping its reputable
position in the competitive market. In recent times, the introduction kiosk machines have
been an innovative step that the McDonalds took for enhancing the company’s hold over the
competitive market. In addition to this, there are inclusion of customised burgers in the menu
as well that was a step taken in the aspect of creativity and innovation.
Exploring the situation
McDonalds even though have enjoyed the leading position in the fast food industry,
suffered from tough competition with the emerging growth of the competitors in the market.
As a result of which the company had gone through several rebranding procedures in order to
satisfy the ever changing mentality of the consumers. It even has to bring innovation in its
strategies for keeping up with the competitive environment of the market. It is significant to
understand the fact that customer satisfaction is the key to success for any company or
organisation (Martínez & Del Bosque, 2013). Taking into account of this aspect McDonalds
took the initiative of satisfying their customers even more by simplifying their functioning.
This initiative was taken for increasing the number of customers and ultimately increasing the
success rate of the company. It has been observed that customers tend to get frustrated with
the long queues and leads them to be in dissatisfied state. However, McDonalds with the

4INNOVATION AND ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY
introduction of their kiosk machines are trying an innovative measure to discard this status of
customers. The self-service kiosk machines are quickly replacing the traditional cashier staff
members. One of the key advantage of kiosk machines are the accuracy of orders that most of
the times are misplaced and leaves a customers dissatisfied (Hui, Lee & Yu, 2015). However,
kiosk machines provide the customers the efficiency of choosing and creating their own
personalised orders without any hassle. It has been observed that since the introduction of the
self-service machines in McDonald’s the wait time is comparatively reduced from the prior
situations (Kim, Christodoulidou & Choo, 2013).
It is significant to know that creativity and innovation adds a unique factor that makes
the company stand out from the rest (Baden-Fuller & Haefliger, 2013). Similarly, McDonalds
adds a unique factor to it by establishing a customised menu that allows the customers to
personalise their own burger. This trend has opened up a scope for the company to increase
its sales and popularity to a greater extent. The concept of this customise burger stands
distinctive from the rest of the fast food chains that offers its customers their set up menus.
Although the other competitors add innovation to their menu by adding location based
changes in their menu. The idea of customising the burgers according to customer’s needs is
an innovative step that McDonalds took in boosting their sales to great height.
Generation of idea
McDonalds explored its market by analysing the competitors and identifying its
potential areas where they can flourish. It is observed that increasing the rate of customer
satisfaction is one of the significant approach in increasing the sales of the company (Sun &
Kim, 2013). This directly puts a positive impact on the success rate of the company as well.
Therefore, the idea of introducing the kiosk machine and customising the menu of burgers for
the customers where two innovative ideas that were taken up by the company to increase
customer satisfaction.

5INNOVATION AND ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY
Designing potential solutions
McDonalds started rolling out the kiosk machines since 2015 in United States
(Mourdoukoutas, 2018). Soon the introduction of self-servicing machines has been a hit and
the company aims to introduce this innovative replacement in 14000 outlets by the year 2020.
It is essential to understand that an innovative idea is guaranteed to be a success. Since it
could go wrong in so many ways and the company has to suffer the losses of it. Therefore, it
is always attempted that a small section of the innovative plan is rolled out first as an
initiative of an experiment. This is the step that McDonalds took by rolling out kiosk
machines in 2015 in its home country. This introduction was soon accepted by the consumers
across the nation and as a result of which the company is planning to expand this innovative
idea across its other outlets in the world (Hettich, 2017). The company further rolled out the
plan of introducing customised burgers menu that has been a success over the period.
Implementing solutions
The introduction of kiosk machine was first made in the year 2015 and as of now the
company aims to establish these self-service machines into its other outlets across the world.
The self-serving machines have been in trend since its invention and now the idea of
introducing these machines in the fast food chain would extensively reduce the prior
complications that customers had to face (Robertson, McDonald & Leckie, 2016). Consumers
no longer have to depend on a staff member of McDonalds instead could get access of
ordering the menu in a personalised way. This reduces the customer dissatisfaction in so
many ways and extensively accelerates the quick service initiative of the company. In order
to further enhance the sales of the company, McDonalds introduces customised burgers menu
that is one of the remarkable amendment made.

6INNOVATION AND ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY
Conclusion
Therefore from the above discussion it can be concluded that bringing in creative and
innovative ideas is not a singular process. Instead requires planning and analysis for its
success in the market. Furthermore, creativity and innovation are closely linked with each
other since the creative ideas only establishes innovative solutions. Therefore, McDonalds
with the introduction of kiosk machine and other measures takes a step towards creativity and
innovation and tries to reconstruct its brand worldwide. The company analysed its potential
areas of improvement and accordingly planned out creative and innovative ideas that would
benefit the company for a long term.

7INNOVATION AND ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY
References
Baden-Fuller, C., & Haefliger, S. (2013). Business models and technological innovation.
Long range planning, 46(6), 419-426.
Hettich, A. S. (2017). Friend or Foe? An Exploratory Analysis of Employees’ Attitudes
Towards Self-Service Technologies. In Beiträge zur Dienstleistungsforschung 2016
(pp. 187-212). Springer Gabler, Wiesbaden.
Hui, L. S., Lee, J., & Yu, R. (2015). U.S. Patent Application No. 14/683,457.
Kim, J., Christodoulidou, N., & Choo, Y. (2013). Factors influencing customer acceptance of
kiosks at quick service restaurants. Journal of Hospitality and Tourism Technology,
4(1), 40-63.
Martínez, P., & del Bosque, I. R. (2013). CSR and customer loyalty: The roles of trust,
customer identification with the company and satisfaction. International Journal of
Hospitality Management, 35, 89-99.
Mourdoukoutas, P. (2018). [online] Forbes.com. Available at:
https://www.forbes.com/sites/panosmourdoukoutas/2018/06/03/mcdonalds-is-getting-
rid-of-store-cashiers-as-walmart-brings-them-back/#142b0d604f98 [Accessed 11 Sep.
2018].
Robertson, N., McDonald, H., Leckie, C., & McQuilken, L. (2016). Examining customer
evaluations across different self-service technologies. Journal of Services Marketing,
30(1), 88-102.
Sun, K. A., & Kim, D. Y. (2013). Does customer satisfaction increase firm performance? An
application of American Customer Satisfaction Index (ACSI). International Journal of
Hospitality Management, 35, 68-77.