McDonald's Innovation Strategy in China

This assignment examines McDonald's strategic approach to the Chinese market, particularly emphasizing innovation and product development. It analyzes the opportunities presented by expanding operations in China while considering potential challenges. The analysis delves into the effectiveness of McDonald's current strategies and proposes recommendations for further growth through product innovation, such as incorporating Chinese flavors into their burger menu.

Running head: NEW PRODUCT MANAGEMENT
New Product Management
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Introduction
New products and innovations are essential for any business organization to enhance their
business and establish them as the leader in the contemporary market. Innovations and
development of new products opens new opportunities for the company to explore. This
assignment focuses on the company Mc Donald’s and two new products that could be introduced
by them in order to enhance their market opportunity and business, along with establishing
themselves in a leading position in the fast food and burger chain. This assignment highlights the
potential opportunities that could be exploited in order to launch the new products. The products
are evaluated and the product that will potentially take the company forward to a next stage is
discussed in this assignment.
Description of organization and the market it operates in
McDonald’s is one of the largest American fast food and hamburger chain. The restaurant
started in California and soon spread widely into various countries all around the world. Today
McDoanld’s operates in more than 100 countries, with more than 36900 outlets. The company is
established as one of the world’s largest fast food and burger chain (Cooper 2013). McDonald’s
operates in various countries and targets the young teenagers who are more attracted to the fast
foods and hamburgers. Moreover, along with the teenagers and youngsters, the adults are also
attracted towards the food of McDonald’s.
Potential opportunity
McDonald’s has been operating in various countries, with more than 36900 outlets all
over the world. However, the potential opportunity for the new products could be the Chinese
market (Gorham et al. 2016). According to a report, China looks forward towards to 2000 more

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McDonald’s outlets in the new few years (Mullen, 2017). This opportunity could be exploited to
enter the Chinese market with greater intensity and ensure that 2000 more McDonald’s could
come up in the next few years (Mullen, 2017). Since the people of China, have accepted the food
chain gladly, and awaits its expansion, hence this opportunity could be used to innovate various
products of McDonald’s.
Two new product concepts
The two new product concepts that could be innovated by McDonald’s are as follows:
1. Hamburger with Chinese flavours
The flavours of hamburger that are traditionally used by McDonald’s in their food chain could be
infused with Chinese flavours in order to innovate in fusion foods (Liljedal and Dahlén 2015).
With this new concept of fusion food, the Chinese market will be attracted to McDonald’s, thus
enhancing the business and making the expansion process a grand success (Fuller 2016).
2. Fusion dessert
The desserts that are available at McDonald’s are conventional American desserts, with
authentic American flavours (Jeon et al. 2016). However, these flavours could be infused with
authentic Chinese desserts almond jelly or egg custard tart, with the available dessert. These two
new products are likely to enhance the market and business of McDonald’s in China (Yu et al.
2014).
The development of new products has various phases. These phases include:
1. Phase 1: Identification of opportunity and selection

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The generation of new products are initiated with the development of needs in an ongoing
business (Crawford and Di Benedetto 2011). The various business operations such as
development of the new product suggestions, changes in the marketing plan as well as
development of new needs in the market are likely to trigger the development of new products.
2. Phase 2: Generation of the concept
The concept of the new product is developed from the needs of the customers. Thus, the
involvement of the customers in the generation of the concept of the new product is done
(Crawford and Di Benedetto 2011).
3. Phase 3: Evaluation of the concept
Once the company decides upon the need for the new product, the technical feasibility, economic
feasibility as well as the market feasibility is evaluated (Yan and Kull 2015). The competence of
the developing team has to be evaluated as well. For example, in this context, the chefs of
McDonald’s China should have the understanding and knowledge regarding the fusion foods and
develop them (Thornton et al. 2016).
4. Phase 4: Developing the technical and marketing tasks
Once the feasibility test is done, and the product is technically and managerially feasible, then
the development activities are considered (Crawford and Di Benedetto 2011). Prototype testing
is done as a part of evaluating the technical feasibility. The marketing of the new product along
with its packaging is considered.
5. Phase 5: Launch

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Finally, when all the initial phases are over, the product is marketed and launched successfully.
This phase is a critical one and determines the success of the products (Crawford and Di
Benedetto 2011).
Evaluation of the new products and choice of one that will take the company one step
ahead
The new products that are to be developed by McDonald’s are a perfect innovation for
the Chinese market. Since the burgers are, the main products of McDonald’s hence the
innovation of the hamburgers with Chinese flavours are chosen for that will take the company to
a next step ahead. McDonald’s has a previous record of incorporating the regional flavours in the
conventional hamburgers (Cummings and Worley 2014). Hence, this innovation will attract the
people of China towards this brand and expand the business of McDonald’s. This new product is
one of its kind and will establish McDonald’s as a leader in the Chinese market (Carden et al.
2017).
Recommendations
It is recommended that in the new product, that is to be launched by McDonald’s for the
Chinese market should be an authentic one. The chefs having the understanding and experience
of the fusion food should be hired, such that the mix of the Chinese flavours with the
conventional burgers of McDonald’s do not fall out of place.
Conclusion
Innovation is an essential activity that has to be taken up by any business organization in
order to gain a major position in the contemporary market. The opportunities that are obtained by

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the expansion of the McDonald’s stores in China, are effective for the growth of McDonald’s.
The innovation of the fusion food in the burgers with Chinese flavours should be incorporated in
order to develop a new product.

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References
Carden, L.L., Maldonado, T. and Boyd, R.O., 2017. Organizational resilience: A look at
McDonald’s in the fast food industry. Organizational Dynamics.
Cooper, R.G., 2013. New products: What separates the winners from the losers and what drives
success. PDMA handbook of new product development, pp.3-34.
Crawford, C. and Di Benedetto, A. 2011. New products management. Boston McGraw-Hill.
Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage
learning.
Fuller, G.W., 2016. New food product development: from concept to marketplace. CRC Press.
Gorham, L.M., Gibson, C. and Irlbeck, E., 2016. Making a case for McDonald's: a qualitative
case study examining the McDonald's" Our Food, Your Questions" campaign. Journal of
Applied Communications, 100(4), pp.17-33.
Jeon, H.J.J., Meiseberg, B., Dant, R.P. and Grünhagen, M., 2016. Cultural convergence in
emerging markets: The case of McDonald's in China and India. Journal of Small Business
Management, 54(2), pp.732-749.
Liljedal, K.T. and Dahlén, M., 2015. Consumers' response to other consumers' participation in
new product development. Journal of Marketing Communications, pp.1-13.
Mullen, J. (2017). China will get 2,000 more McDonald's restaurants in the next few years.
[online] CNNMoney. Available at: http://money.cnn.com/2017/08/08/investing/mcdonalds-
china-new-restaurants/index.html [Accessed 14 Aug. 2017].

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Thornton, L.E., Ball, K., Lamb, K.E., McCann, J., Parker, K. and Crawford, D.A., 2016. The
impact of a new McDonald's restaurant on eating behaviours and perceptions of local residents:
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Yu, B., Hao, S., Ahlstrom, D., Si, S. and Liang, D., 2014. Entrepreneurial firms’ network
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