Analysis of Digital Leadership in the Fast Food Industry Report

This report delves into the realm of digital leadership within the fast food industry, with a specific focus on McDonald's. It begins by examining the impact of Industry 4.0 on the sector, highlighting the integration of technologies like the Internet of Things and big data analytics to enhance customer experience and streamline operations. The report then analyzes McDonalds' strategic digital capabilities, including its online ordering systems, personalized drive-thru menus, takeaway options, self-service kiosks, digital menus, and the implementation of voice technology. Furthermore, it explores the role of digital leaders in navigating the complexities of the modern business landscape, discussing leadership theories like the contingency theory and situational theory. The report also examines the importance of innovation and automation in the fast-food sector, emphasizing the continuous evolution of digital strategies to meet changing consumer demands and maintain a competitive edge. This report provides valuable insights into the digital transformation of the fast-food industry, offering a comprehensive overview of the strategies and technologies that are shaping its future.

DIGITAL LEADERSHIP

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................3
Analysis and Implication.............................................................................................................3
TASK 2............................................................................................................................................5
The strategic digital capabilities of McDonalds..........................................................................5
TASK 3............................................................................................................................................7
The role of digital leaders............................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Fourth industrial revolution is commonly termed as “Industry 4.0”. The term was first
introduced in 2011 in Germany to identify the future German economic policy proposal; it was
based on high-tech strategies. Implementation of Industry 4.0 to its highest can be seen in
Germany especially in multinational technological companies likes General Electric, Mitsubishi
and Siemens. “Manufacturing and automation technology developers such as DMG Mori,
Wittenstein, Bosch, Rockwell, Omron, Schneider, Stäubli, Yaskawa, Krones, PSI and Software
AG already market many technologies and solutions as Industry 4.0” (p. 195).
Since 2011, the term Industry 4.0 is widely used not only in Germany and the field of its
origin(engineering) but also in economic and management domains across the globe. Industry
4.0 has a board spectrum that includes value chain based on technological concept cyber physical
system, the internet of Things and the internet of services, big data management, relationship
with consumers and so on (van Outvorst, Visker and de Waal, 2018).
Hospitality industry has massively contributed in UK economy from over centuries. Fast
food restaurant and pubs are in a heart of this business contributing billions of pounds as a
revenue every year. Traditionally people used to order by walking in a fast food restaurant or a
pub for eat in or take away. With the technological development, this sector has been reshaped.
Increased habit of Online shopping in UK has forced industry to redesign and innovate its style
of business function.
There were many problems faced by customers and business with traditional style. From
Limitation of space, queuing for an order, food preparation time and many more. With the
advancement in digital technology fast food industry is transforming such that efficient and
coherent service is provided with higher standard of food quality. This report gives classification
on strategic capabilities and role of digital leaders.

TASK 1
Analysis and Implication
One of the key components in industry 4.0 is the internet of Things and the internet of
service where a customer is more oriented in the use of internet and its application to its
maximum in order to find fast food restaurant and its menu near them online. Fast food
restaurants in UK has incorporated the use of internet in its leadership strategy using their own
website, App or via third party App and websites like Just Eat, Uber Eats and Deliveroo. This
allows customer to place order in real time and get notify about the time to get it delivered or
pick up and also for them to go and (Shah and Patki, 2020) dine in their allocated time of their
choice. Fast food chain like McDonald's, KFC, Burger king, Pizza Hutt and Dominos are key
user of this principle.
Kagermann et al. confirm that “Industry 4.0 represents nothing less than the fourth
industrial revolution, comprising 3D printing, Big data, Internet of Things, and Internet of
Services, i.e., all the ingredients needed to facilitate smart manufacturing and logistics
processes”. Data is an asset for any business and organization. Industry 4.0 emphasizes on
collection and storage of big data in a business for future and a real time analysis. Data is used to
analyze the customer (Jäckli and Meier, 2020) need and taste through Web-analytic. Fast food
industry has been able to use this big data in promoting its service and products using different
internet and social platform.
These data are used in social media platforms like Facebook, Twitter, Instagram etc and
digital media like YouTube, Google, TV as an advertisement campaign by fast food restaurant to
create more audience for the products and services provided. These big data create an artificial
intelligence with the combination of a technological advancement. For example, if anyone has
googled McDonalds in their browser it remembers and shows recommendation in other different
platforms like Facebook and YouTube. Fast food restaurant in UK has successfully incorporated
this principle in their digital leadership. However, there has been concern about the use of this
data is a lawfully way (Piccarozzi, Aquilani and Gatti, 2018).
Industry 4.0 is incomplete without innovation and automation of product and service a
“Smart factory concept”. Preuveneers et al. “These technological revolutions will transform

production and logistic processes into smart factory environments that will increase productivity
and efficiency”. Fast food industry in UK has gone rapid transformation in use of innovative
products to attract it customers (Eggers and Hollmann, 2018). Rapid changes have been made in
use of websites and mobile Apps by the companies to make sure it is accessible and available
easily to the customer. The likes of self-order services introduced by McDonalds in its store is
one example of it. It has not only helped to reduce queuing time to place an order but also
waiting time for the product. Fast Food restaurants do delivery services like Dominos Pizza and
Papa John's who use their own drivers for efficient and reliable service where customers are able
track the whole process thoroughly (Wang and et.al.,).
TASK 2
The strategic digital capabilities of McDonalds
Fast food ordering system-
Company has improved and advanced their methods to take orders as it is important to
play with the needs of market and meet up with the changes. Now people do not have togo and
wait in queues just to get their order. The method has totally changed because of advancement in
technology as now people can place order online through their official websites or they have tied
up with third party sites such as Zomato or Uber eats. This has helped company to generate more
revenue by bringing in more orders as it has gotten more convenient for the customers. This has
helped them enhanced their capabilities through digital aspects (Tanniru and Peral, 2021).
Personalized drive-thru menus-
The main focus of McDonalds is to improve the experience of both their employee as
well as customers. With this strategy they have been successful in retaining their customers. for
that they have invested in area of personalized tech startup Dynamic Yield which is around $300
million. That has helped them to enable the technology of AI in their drive thru machines so that
they can personalize their menu on the preferences of customer and other factors which involves
day and weather. With this form of acquisition company has gotten better in order to increase
their development in the area of technology. This has helped them to offer their customers an

experience which is more personalized. Currently the company is working on deploying the
restaurants in all of the drive-thru in UK.
Take away ordering system-
This strategy has been initiated by the company in order to save the time of their
customers who are in a hurry and cannot afford to waste their time. All the customer need to do
is place an order through their website and select the option takeaway instead of dine in. This
will be a go to meal for the customer as they won’t use the restaurant for dining in, they will just
wait for the parcel and take it away with them. Many of the customers prefers this method
because it does not consume time as the time which is taken in the preparation of meal is used by
customer in the period of travel to destination and as soon as the customer reaches the place he or
she will get the order ready which they can eat as their go to meal.
Self Service Kiosks-
McDonalds has used this method to increase their reach for a specific audience such as
teens or college students because they are the kind of audience who prefers the meal which is
offered through kiosks. The items that can be served through them is shakes, coffee, cold drinks
and ice cream etc. which can be easily served and is easily accessible to customers at low cost.
This has helped the company to keep their grasp in market of different areas and help them to get
more numbers in their revenue. This strategy has increased their capacity to serve more in rural
markets. In order to increase the flexibility through this method company has given them the
option to order via their phone and check in with the help of machine so that they can collect the
order easily. Apart from that if some of the customers still want to make it a experience of dine
in they can as some of the kiosks of McDonalds have table near them which is what makes them
different from others as they offer their customers different things which improves their
experience from their competitors. Due to the aspect of digital landscape people can connect to
the webpage of the company and get their deals from there.
Digital Menus-
In order to take orders online it was important that they come up with a digitized menu
which is easy to understand and can be accessible by all. This was done in such a way that it

even attracts the customers to buy out more of their items. But on the top of that by
implementing the advance field of technology and enabling AI in their culture it has been a rapid
development in the field that the orders of an individual are getting recorded and on the basis of
that they are getting a suggestion at the next time they order things which makes them feel
important. This has helped them to make their dealings with McDonalds better.
Other than this they have initiated digital menu in many different areas which is a part of
dynamic yield machine learning technology. This works on an approach which is to show the
items on the menu on the basis of time and weather which helps to influence the minds of people
to make a decision of buying out their goods.
Voice tech in drive thru-
McDonalds is taking the help of apprente company so that they can have agents who are
voice based. They are testing them on different locations so that they can take away their orders
in different languages and understand their accents without any errors so that it can be more
accurate and reliable for them. The reason for the adoption of this strategy is to reduce the level
of staff so that operating cost can be decreased and people will have to spend less amount of time
on waiting. The vision of this method is to offer items that are trending and offer the things
which is suitable as per the weather. After the order has begun it can also suggest them to add
some combo to make the meal complete. The management of company believes that with this
they will be able to improve the level of customer service, make the process of work efficient
and with enabling this strategy they will be able to put their employees in an area where they can
get more productivity from them (Sultan and Suhail, 2019).
TASK 3
The role of digital leaders
There are different styles and theories of leaders which is necessary to be played out by
them as maintain and competing in sector of hospitality is very difficult and complex due to high
level of competition. There are different theories of leadership such as
Contingency Theory-

This form of theory states that no style of leadership will be applicable to all and till they
start to work with different approach for different areas they won’t succeed. This theory states
that leader has to work with variables so that every situation can be easily worked on with the
right form of action. In order to make the leadership on digital platforms it is important to
understand its offering and compare it with the needs of people so that balance can be
maintained. This way they will be able to take decisions as per the demand of the situation
(Tareque and Islam, 2021).
Situational Theory-
Leaders who follow this form of leadership do not give importance to leaders who work
with different approach as they believe they are the best. It is important for the benefit of
company that they make decisions as per the need of the situation. It is up to them to assess the
viability of the situation as through it they will be able to achieve growth.
Transformational Theory-
In order for a leader to work with this form it is important that leader must possess
attributes such as charismatic, strategies and decisions that are inspiring and motivating their
employees to transform their skills in order to be better. It was the leaders of McDonalds who
understood the importance of digital aspects and were able to explain it to their members of team
which will help them to make changes in their perception and improve their performance. This
way they were able to work up to their potential and achieve their goals and objectives (Mihardjo
and Sasmoko, 2019).
Transactional Theory-
This theory of leadership is believed to be theory of exchange and theory of management
so that they can understand the aspect of supervision, teamwork and organization. Leaders who
follow this approach looks after different aspects and conclude them as actions for leadership
such as reward and punishment. This theory is used by many of the businesses and in many of
the companies it has worked successfully. This has also helped them to improve the level of
productivity of the business.
Behavioral Theory-

This form of leadership theory focuses on the behavior or action made by the leader
instead of the qualities possessed by them or their traits. This theory is considered effective when
leader who is assigned for the company is highly experienced which will state that he has skills
which are required to manage every concerned area. This theory also states that with the right
amount of skills learned an individual can easily be a leader that is good. This is the reason why
many companies such as McDonalds invest in this theory and pertain an individual on the basis
of steps given in it so that he or she can get outstanding results for the company.
Great Man Theory of Leadership-
This theory is believed to be oldest of them all and the perception of this theory is slight
different as they believe that people with the skills of leaders are born with it rather than get
trained for it. This theory works on a different approach and that is if the person who is ready to
lead and have the capacity to do that will have the traits in his personality, confidence, skills of
communication and behavior in social events. This is different because it is considered and
evaluated since their birth. It was the capabilities (Khanal,Budhathoki and Erbstein 2019) of
leaders of McDonalds that helped them to evolve their strategies and work with advance
measures so that they can offer the best level of satisfaction to their customers and stay ahead of
their competitors. This approach clearly determines that qualities of leader cannot be learned it is
with you since the beginning. Many of the former leaders of the company approve it as they are
not able to change any of their qualities. It is a discouraging factor for people who are attempting
to be leaders.
Trait theory of leadership-
The approach of the theory is same as the great man theory but the qualities that are
highlighted are different from it such as intelligence, taking responsibility of work or actions,
accountability, creative senses so that they can lead with creative measures. Although there is a
drawback to this form of leadership which makes the management thinks about choosing it
which is that this approach does not have those traits which help to get conclusion on the
operations. This theory can help the companies such as McDonalds to improve the other theories
implemented by them in their culture. This is because many of the knowledge this theory
pertains is from the support of research (Eggers and Hollmann, 2018).

It is up to the management of McDonalds to discuss and select a viable leader for them as
per the approach of digital and advanced aspects because the company is known for bringing and
serving with innovative changes in market and without a good leader it is not possible to do that.
The role of digital leaders has been essential for the company in achieving success and bringing
change in market.
Role of Digital Leaders
Digital leaders have to work with the help of digital assets of the business so that they can
work up to their goals. Leaders who are concerned with the dealings of digital measures have to
make sure that they are aware of their goals and design a structure that helps them to attain the
competitive advantage. The role of these leaders in the company is to explore that in what ways
technology can be used so that they can assess changes in their offerings and make it as per the
needs and wants of the customers. They work on this measure so that they can evolve the
working of the project. They have to make sure that they are able to take the help of new
technologies and improve the flow of work.
Digital Culture-
McDonalds has many departments which confuses the needs of this task and is not able
to complete it which is when digital leader is able to help them by providing all the tools required
to them (Eberl and Drews, 2021).
Increase productivity-
The role of digital leader is to drive the employees and help them when they are working
up with these tools. They make sure that there is no errors in the task and the employees are not
struggling while doing it (Della Corte, Del Gaudio and Sepe, 2019).
Improves satisfaction of customers-
McDonalds have many customers that are satisfied with their services offered over the
years but still in order to go on and create more customers in the market they have to offer more
convenience and better support that is where digital leaders helps and provide support to the
members of team (Creusen, Gall and Hackl, 2017).

The skills of digital leaders are different such as their role as they have changed the
whole process of communication in the company by building a strong network and now they
conduct virtual meetings for that. This has been helpful for the managers of the company who
are out of town for another business deal but can still connect to others to remain updated.
McDonalds has clearly observed that most of the revenue has slightly shifted from their digital
business streams instead of offline measures as people has adapted this change because of the
convenience it offers to them. The role of digital leaders has been different as they evolved the
mechanism and way that company works. It is because of them that the company has been able
to work with new and different approaches that has helped them to offer customers more
flexibility and convenient.
CONCLUSION
Industry 4.0 has changed fast food industry in UK drastically. Use of advance technology
incorporation with high skill human resource is visible in fast food industry. The change is
customer behavior from traditional to online shopping of food and its delivery to door step has
increased. However, the risk of misuse of data still remains in digitalization of the industry. It
has also been assessed that more satisfaction they offer to their customers more chances are that
they will be able to retain them.

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