Analyzing McDonald's Corporate Entrepreneurship and Innovation

This report provides an analysis of McDonald's corporate entrepreneurship and innovation strategy. It highlights the company's focus on innovation, driven by consumer insights and a commitment to high standards. The report examines McDonald's opportunity analysis plan, emphasizing the need for a thorough market assessment. It also discusses organizational elements like calculability, control, efficiency, and predictability, and recommends brainstorming and mind mapping to enhance creativity. The report concludes that while McDonald's has a strong history of innovation, it needs to adapt to current trends and customer preferences to maintain its competitive edge. Desklib provides access to similar solved assignments for students.

CORPORATE
ENTERPRENEURSHIP
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EXECUTIVE SUMMARY
Mc Donalds has always believed in developing innovative strategies, undertaking an
extensive product planning and produce products. The culture prevalent within the
organization and the kind of leadership style which is followed throughout the hierarchy is in
itself imbibed with innovation. The innovation strategy is based on the principle of starting
small and thinking big. The insight of consumers is the primary trigger for commencement of
the process of innovation and creativity. Maintaining highest standards is an absolute
requirement for the company. The opportunity analysis plan of Mc Donald firstly requires the
management to describe the idea and the level of competition existing in the market, followed
by an extensive assessment of national as well as global market in the context of specific
idea. The techniques of brainstorming, mind mapping and prototyping have been identified as
some of the ways for enhancing the current creative process of the company.
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Table of Contents
INTRODUCTION................................................................................................4
Brief Background of Mc Donald......................................................................4
Current Innovation Strategy..............................................................................5
Opportunity Analysis........................................................................................6
Organizational Elements...................................................................................6
Strategy for implementation of Plan ...............................................................8
Recommendations.............................................................................................8
CONCLUSION .......................................................................................................................9
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INTRODUCTION
Corporate Entrepreneurship is a formal term denoting the process of evolution of new
ideas as well as opportunities, which can be witnessed within business enterprises. In
consequence to this process the level of profitability as well as strategies is improved to a
great extent, thereby enabling the entities to improve their competitive position. The core of
this concept lies at the notion of innovation. This combination enables businesses to
undertake beneficial risks and move in a highly calculated manner. In pursuance to this
concept companies like Mc. Donald have the potential to make significant alteration in the
position of competition existing in the industry, and also develop an entirely new sector.
Brief Background of Mc Donald
Mc Donalds is a company which is serving approx. 50 million consumers all over the
world in more than 30,000 destinations. It is interesting to note that the primary focus of all
strategies developed by the company till date has been the end consumers. Moreover, the
process of innovation has always been a part of their operations, and in consequence to which
they have reflected a constant streak of innovation (Yu and Hang, 2010). It can be stated that
the entity has always believed in developing innovative strategies, undertaking an extensive
product planning and produce products. In consequence to which the effect of changing the
industry and gaining a competitive edge in the market could be produced. The ambition
which is foreseen by the company is to see beyond what is being sold, and deliver good food
through a creative and diversified team of people and stay committed to reduction of their
footprint (Martinez, 2013).
In the past years, the company has clearly established its eye for potential
opportunities and the key to occupy a high position in its industry. In pursuance to the same it
has been observed that the culture prevalent within the organization and the kind of
leadership style which is followed throughout the hierarchy is in itself imbibed with
innovation (Our Ambition – Mc Donalds, 2017). This is the medium through which the
company has been defining standards for the industry, since the time of its inception.
However, there still lies scope in Mc Donalds, which the management has failed to explore
till date.
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Current Innovation Strategy
The innovation strategy of the company is driven from the idea of thinking bigger
even at the time of starting small, but scaling at a higher pace. As stated earlier the key to
success of Mc Donalds can be given to all the employees who have been associated with its
operations (Martín-de Castro, López-Sáez and Delgado-Verde, 2011). It has been noted that
the workforce within the organization is ingrained with the marketing principle of 5Ps –
people, price, promotion, product and place. Through application of this marketing principle,
the entity has been operating innovatively and has undertaken all customer oriented initiatives
(Anderson, Potočnik and Zhou, 2014). It is interesting to note that primary triggers for
commencement of the process of innovation and creativity are the demands of their
consumers. One of the important places of this entire chain is occupied by the franchisees,
who in essence are the operators of the business. One of the biggest challenges which the
management has been facing is to merge the thought process of diversified franchises with
organizational objectives, and it is not possible to function in a centralized manner. At this
place the company has applied its highly diversified and comprehensive strategies to evolve a
decentralized system of operating with the franchisees and encouraging innovation across the
entire chain (Afonso, Monteiro and Thompson, 2010). The only necessity or requirement
which the company has imposed on all is to abide by the highest quality of the products. This
reflects the fact that maintaining the highest standards is an absolute requirement for the
company. Further it has also been observed that the company has implemented a three-legged
principle, in pursuance to which it operates on the basis of complete trusts placed upon both
the suppliers and the franchises. The interaction with the supplier is extremely close, so as to
enable the production team to develop and enhance their products through application of the
newest of techniques (Kalyar, 011). Therefore, these stakeholders hold paramount importance
for the management of the company.
Opportunity Analysis
The management of Mc Donalds is highly efficient and has always been undertaking
the process of analyzing business opportunities in the market, in order to carve out specific
unsatisfied needs prevalent in the market. In pursuance to the same, knowledge and
experience has proved to be the key factors for enabling the entity to recognize and analyze
the opportunities in a timely manner (Urigiien, Eldar and Dragoty, 2012). This effective
usage of its resources and assets has enabled the company to target a niche market and realize
profits. The opportunity analysis plan of Mc Donald firstly requires the management to
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describe the idea and the level of competition existing in the market, followed by an
extensive assessment of national as well as global market in the context of specific idea. This
step prepares a basic platform for the company, on the basis of which an entire team is
developed for further evolving the viability of the business venture.
However, on analyzing the current status of the entity in the market, it is important to
note that the company has reached a level of stagnation over the past few years. Though the
company became a global empire with the innovative franchising model, but the same seems
to be a common trend being followed by many (Hawkins and Davis, 2012). Lately, the Mc
Donalds is lagging behind as it became complacent in its operations and did not make much
efforts to attract increasing number of customers on the basis of current trends. Some of the
attributes of customization, serving healthy and fresh food or ethical concerns are missing.
Hence, this is the area which needs to be explored by the company. It is important to mention
that this is a feasible opportunity, and the company can make high profits out of it.
Organizational Elements
The four major attributes which have integrated and strengthened relation of the
company with its primary stakeholders are calculability, control, efficiency and predictability.
The above mentioned four elements have been imbibed by the company at every level and
within every process of the company (Jones, 2010.). Efficiency is maintained with the
assistance of organizational policies and regulations which has ensured delivery of highly
efficient work. The element of Calculability is reflected in the portion size and cost being
offered through its products and services. In addition through this element the company has
also implemented this element through addressing the perception of time consumption which
is invested by consumers for availing the facilities of the company. In furtherance to the same
the services of home delivery or instant deliveries at store were launched (Colapinto and
Porlezza, 2012). One of the most innovative elements which the company has successfully
achieved is that of predictability, through which it has been ensured that same products and
services are offered at all the outlets. This has been successfully achieved through strict
implementation of corporate rules and the manner of dictating by the managers. Lastly, for
ensuring an effective control on all the process and human resources, technology has been
utilized in the most effective manner (Galizzi and Venturini, 2012).
In the event Mc Donalds implement these policies it shall transform the manner in
which these strategies are being utilized. The management would be required to develop
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entirely new strategies. For instance new strategoes shall be required to be developed for the
element of predictability (Howaldt, Kopp and Schwarz, 2015). The present model of
providing same product with same quality at all the stores shall be transformed, with
significant replacement of the products, and the manner the same are served.
Apart from the above mentioned organizational elements the company has also been
continuously enhancing the creativity levels which prevail within all the processes and
systems (Bigliardi and Galati, 2013). This has been accelerated through embracing diversity
and expecting creativity from the workforce. Further, it has been observed that a very tolerate
culture has been developed within the organization, in pursuance to which issues are always
tackled in the form of challenges (Dubina, Carayannis and Campbell, 2012). Recognition and
celebration are always preferred for further encouraging creativity. It is believed by the top
authorities that are under an obligation to present a model of creative behaviour, pursuant to
which they can expect creativity from the end of their employees. In order to introduce the
said significant changes the culture of organization is likely to act as the enabling factor. The
Participative leadership style shall enable the management to appraise their employees with
the process of change. This shall eliminate all the resistance which may arise from the end of
employees at all levels (Bain and Kleinknecht, 2016). Further, it is important highlight that
the organization has a trend of bringing innovation to their products, although at a small
level. In pursuance to the same, it can be stated that the management has often reflected the
trait of innovation champion in the past. Thus, the organizational culture has the potential to
successfully implement and sustain change in their present strategies.
Strategy for implementation of Plan
In order to implement this transforming plan, the management of Mc Donalds shall be
required to evaluate the strategic plan, and assess it from all the perspectives. Once this
assessment is undertaken a clear and holistic vision shall be developed for ascertainment of
specific goals and targets. In the next step, an effective and efficient team shall be developed
which understands the need of change as well as are appraised with all the technical
knowledge (Vitasek and Manrodt, 2012). An effective training shall be provided to appraise
them with specific goals and objectives. All the sources of finance shall be ascertained in
advance so as to be avoid any form of error. Followed by this the plan shall be implemented
under the supervision of higher management.
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Recommendations
It holds no doubt in stating that Mc Donalds has been operating and functioning in the
most innovative style. In pursuance to producing ideas of high quality current processes can
be further improvised through adoption of the technique of brainstorming. It is a process
wherein a team of people is led to undergo a session to interact with an extremely small
structure, with the designated aim of evolving high quality and creative thoughts (Teeple,
2016).
Secondly, the company can also utilize the strengths of the technique of mind
mapping, which can be characterized as an expansion of brainstorming. With the assistance
of this management can ascertain the manner in which the brain’s of their employees function
(Mujtaba and Patel, 2011). With the assistance of this tool the management of company shall
be enabled to proceed in a specific manner, and develop strategies which are in consonance
with the learning styles of the employees.
Lastly, prototyping is another recommendation which is a vital portion of the creative
process. The company may adopt the practice of rapid prototyping, which in essence shall
transform the thoughts and ideas into real models. With the assistance of this actual model,
practical flaws shall be highlighted existing in the original idea (Sawyer, 2011). This could be
one of the best models of ascertaining the areas of developmental needs and on the basis of
the same constant improvement can be assured.
CONCLUSION
Mc Donalds is one of the most successful business enterprises existing in the global
market, and has been operating on an effective model of delivering high quality products at a
cheap price. The key to this position of the company is a constant streak to innovate its
products and strategies, in order to satisfy the demands of consumers. The innovation council
and the organizational culture have enhanced the quality of products being delivered to the
market. However, there still lie certain lacunae which can be eliminated through adoption of
the technique of brainstorming and mind mapping. The process of prototyping is another tool
which shall enable the company to produce full proof strategies, and reduce the possibility of
errors.
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REFERENCES
Books and Journals
Afonso, Ó., Monteiro, S. and Thompson, M. J. R., 2010. A growth model for the quadruple
helix innovation theory.
Anderson, N., Potočnik, K. and Zhou, J., 2014. Innovation and creativity in organizations: A
state-of-the-science review, prospective commentary, and guiding framework. Journal
of Management. 40 (5). pp.1297-1333.
Bain, D. and Kleinknecht, A. eds., 2016. New concepts in innovation output measurement.
Springer.
Bigliardi, B. and Galati, F., 2013. Innovation trends in the food industry: the case of
functional foods. Trends in Food Science & Technology. 31 (2). pp. 118-129.
Colapinto, C. and Porlezza, C., 2012. Innovation in creative industries: from the quadruple
helix model to the systems theory. Journal of the Knowledge Economy. 3 (4). pp. 343-
353.
Dubina, I. N., Carayannis, E. G. and Campbell, D. F., 2012. Creativity economy and a crisis
of the economy? Coevolution of knowledge, innovation, and creativity, and of the
knowledge economy and knowledge society. Journal of the Knowledge Economy. 3
(1). pp. 1-24.
Galizzi, G. and Venturini, L. eds., 2012. Economics of innovation: the case of food industry.
Springer Science & Business Media.
Hawkins, R. and Davis, C.H., 2012. Innovation and experience goods: a critical appraisal of a
missing dimension in innovation theory. Prometheus. 30 (3). pp. 235-259.
Howaldt, J., Kopp, R. and Schwarz, M., 2015. On the theory of social innovations: Tarde's
neglected contribution to the development of a sociological innovation theory.
Jones, G. R., 2010. Organizational theory, design, and change.
Kalyar, M. N., 2011. Creativity, self-leadership and individual innovation. The journal of
commerce. 3 (3). p. 20.
Martín-de Castro, G., López-Sáez, P. and Delgado-Verde, M., 2011. Towards a knowledge-
based view of firm innovation. Theory and empirical research.Journal of Knowledge
Management. 15 (6). pp. 871-874.
Martinez, M. G. ed., 2013. Open innovation in the food and beverage industry. Elsevier.
Mujtaba, B. G. and Patel, B., 2011. McDonalds Success Strategy And Global Expansion
Through Customer And Brand Loyalty. Journal of Business Case Studies (JBCS). 3
(3). pp. 55-66.
Sawyer, R. K., 2011. Explaining creativity: The science of human innovation. Oxford
University Press.
Teeple, E. E., 2016. Look out McDonald’s, the" Wheel” is rolling. InProceedings of the 1979
Academy of Marketing Science (AMS) Annual Conference (pp. 380-380). Springer
International Publishing.
Urigiien, J. A., Eldar, Y. C. and Dragoty, P., 2012. Sampling at the rate of innovation: Theory
and applications. Compressed Sensing: Theory and Applications, p. 148.
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Vitasek, K. and Manrodt, K., 2012. Vested: How P&G, McDonald's, and Microsoft are
Redefining Winning in Business Relationships. Macmillan.
Yu, D. and Hang, C. C., 2010. A reflective review of disruptive innovation
theory. International Journal of Management Reviews. 12 (4). pp. 435-452.
Online
Our Ambition – Mc Donalds, 2017. [Online]. Available through:
<http://corporate.mcdonalds.com/mcd/our_company/our-ambition.html>. [Accessed on
11th February 2017].
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