Establishing System That Support Innovation: McDonalds Report

This report provides a detailed analysis of establishing an innovation system to support business development, specifically focusing on McDonald's. It begins by researching the context of a new system, including exploring system objectives, analyzing the current organizational structure, identifying gaps and barriers, researching current information, evaluating requirements for fostering innovation, and identifying key stakeholders. The report then delves into the generation of ideas and concepts, covering idea creation, evaluation, explanation of how ideas support innovation, testing, exploring, challenging, selecting, and refining ideas. Furthermore, it outlines the development of a plan, including analyzing the potential impact of the new system, consulting with stakeholders, developing an operational plan, developing a communication strategy, and evaluating coaching and training needs. Finally, the report discusses trialing the system, which involves developing and presenting a system proposal, determining context and parameters, monitoring and reviewing the trial, and opening the improvement process, concluding with a summary of the findings and recommendations.

Running head: ESTABLISH SYSTEM THAT SUPPORT INNOVATION
Establish System That Support Innovation
Name of the Student:
Name of the University:
Author Note:

2ESTABLISH SYSTEM THAT SUPPORT INNOVATION
Executive Summary:
The report gives an overview of establishing system that supports innovation. The discussion
in this report is about developing system that leads to innovation in McDonalds. The report
therefore researches the context of the new system. There is description of concepts and ideas
of the system mentioned in the report. Further, the report discusses on the development of a
plan for implementing the new system. Trial about the new system involving developing and
presenting a system proposal, determining the parameters and context, monitoring and
reviewing the trial and opening of the improvement process mentioned in the report
mentioned in the report.

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Table of Contents
Introduction................................................................................................................................4
1. Researching the Context of the New System.........................................................................4
b. Analyzing Current Organizational System.........................................................................4
c. Identifying any Gaps and Barriers......................................................................................5
d. Researching Current Information about Systems...............................................................6
e. Evaluate What is Required To Foster Innovation...............................................................6
f. Identifying the Key Stakeholders........................................................................................7
2. Generation of Ideas and Concepts..........................................................................................8
a. Creating Ideas.....................................................................................................................8
b. Evaluation of the Ideas.......................................................................................................9
c. Explaining how your ideas are supporting Innovation.......................................................9
d. Testing, Exploring and Challenging Ideas.......................................................................10
e. Selecting and Refining Ideas............................................................................................10
3. Developing a Plan................................................................................................................11
a. Analyze the Potential Impact of the New System............................................................11
b. Consulting with Stakeholders...........................................................................................12
c. Developing an Operational Plan.......................................................................................12
d. Developing a Communication Strategy............................................................................13
e. Evaluating Coaching and Training Needs........................................................................13
4. Trial The System..................................................................................................................14
a. Develop and Present a System Proposal...........................................................................14
b. Determining Context and Parameters...............................................................................14

4ESTABLISH SYSTEM THAT SUPPORT INNOVATION
c. Monitoring and Reviewing Trial......................................................................................14
d. Opening the Improvement Process...................................................................................14
Conclusion:...........................................................................................................................14
References:...............................................................................................................................14

5ESTABLISH SYSTEM THAT SUPPORT INNOVATION
Introduction
The report discusses about establishing system that support innovation. The
discussion in this report is about developing system that leads to innovation in McDonalds.
The report therefore researches the context of the new system that involves exploring its
objectives, analyzing the current organizational system , identification of any gaps and
barriers, researching the current information about the system , identifying the key
stakeholders and identification of the requirements for fostering innovation. The report
describes the concepts and ideas of the system. Further, there is also a discussion on the
development of a plan for implementing the new system. The report also describes about
trialing the system that involves developing and presenting a system proposal, determining
the parameters and context, monitoring and reviewing the trial and opening of the
improvement process.
1. Researching the Context of the New System
a. Exploring System Objectives
Richard and Maurice McDonald found McDonalds in the year 1940 in California as a
barbeque restaurant. The company used production line principles and later recognized the
business in the hamburger stand thereby becoming the world’s largest chain of restaurants
that is serving over 69 million customers in approximately 100 countries (Gough, McFadden
and McDonald 2013). The multi-year turnaround around effort of the burger chain focuses on
All-Day Breakfast promotion that is yet to become a fruitful choice. However, the company
can deliver sustained growth through several big changes that can be in the form of
innovation of the menu, renovation of its stores and digital order and delivery.
The company can opt for menu innovation by adding new customized items of its
burgers and sandwiches. The store renovation can also add up to an innovation for
McDonalds. This can happen through by bringing in a change in the existing yellow and red

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color along with the white metal chairs. The introduction of digital order and delivery system
will not only enable customers to pay through credit, debit, cash, android and apple pay and
place an order in the mobile service of the company.
b. Analyzing Current Organizational System
The organizational structure of McDonald’s underwent a reformation in the year 2015
for improving the global operations of the company. The organizational system of a company
is a means through which various components of the organization coordinates in order to
achieve the objectives of the business (Kane et. al 2015). However, the organizational
system of McDonalds enables market management based on level of performance. The
company also makes an effort to evolve by addressing emerging and current issues of the
market. The company in order to satisfy customers maintains its performance by rolling out
new products from time to time. Thus, the company has an organizational system that can
easily adapt to the changing environment of the business. The company therefore has an
organizational system that is divisional where each division is responsible for handling a
specific operational area. This type of organizational system not only supports organizational
flexibility and autonomy. Thus, the characteristics of the organizational system include:
1. Global hierarchy: The Company has a global hierarchy for covering its operations
on a worldwide level.
2. Performance based divisions: These divisions comprise of the unique feature in the
organizational system of McDonalds and the company used it a basis for its new divisions.
3. Function based Groups: This implies that for McDonalds have human resource
management group, legal group and a supply chain and franchising group under its corporate
operations.
c. Identifying any Gaps and Barriers
There are however, certain disadvantages of the organizational structure of
McDonald’s because the company tends to generalize strategies for the divisions that are

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performance based. This provides a limitation in flexibility (Akin et. al 2013). Therefore,
there are certain barriers and gaps that the company faces on a worldwide level:
 In United States, the company faced with a challenge of not being able to cope
with the shifts that it offers
 In China, the company faces some safety concerns with the food
 In India, the company faces several legal disputes that hindered it from getting
an advantage
 In Japan, there was a backlash from the consumers demanding for a cost cut.
 In Russia, the business of the company became a part of the geopolitics
 In Latin America, there were regional woes that hit the revenues of the
company.
 In Europe, the company’s laboratory was a victim of economic downturn
d. Researching Current Information about Systems
The current Information about the Systems is as follows (Zimmermann et.al 2015):
1. Introduction of New Items on the Menu: The Company can introduce a new menu
that will include three different sizes of the big Mac and add new some new innovative items
for its domestic stores based on the customer demand. The company can also bring in some
customizable burger and sandwich options that are more upscale.
2. Renovation of the Outlets: McDonalds can undertake renovation of the outlets
through changing the white metal chairs and its basic bold yellow and red colored structure.
Moreover, the company in order to become a progressive and modern burger company can
add self-service ordering kiosks and table service for its stores. This will enable the
employees in spending more time in front of the restaurant and help in food delivery to the
table thus offering traditional hospitality.
3. Digital Ordering and Delivery: Through digital ordering, the company can expand
the number of pay platform and mobile orders. The company should therefore, undertake

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means through which the customers can make payment through credit, cash, debit, android
pay and apple pay. The Company should also enable taking orders through mobile service.
The convenience will not only increase the number of orders but also increase its
profitability. To avail this service the company should also enhance its delivery service.
e. Evaluate What is Required To Foster Innovation
To foster Innovation the company should change the present menu with some
innovative ideas that will attract the customers and increase their demands. The menu should
not only be attractive but also be decently priced for attracting the consumers. Secondly, the
renovation in the old structure and the furniture of the outlets can be a good reason for
attracting people (Matt, Hess and Benlian 2015). The presence of self-service kiosk will also
ensure convenience in placing orders. Thirdly, the digital order facility will also allow
convenience in ordering and payment options thereby fostering innovation.
f. Identifying the Key Stakeholders
The key Stakeholders of McDonalds are as follows (Lawrence and Weber 2014):
1. Employee: One of the stakeholders of McDonalds is its employees considered as
internal stakeholders since they work inside the company and have the power to influence its
functions. Anyone working for McDonalds becomes a stakeholder who might be either a part
timer or full timer.
2. Customers: They are the external stakeholders who possess the interest of buying
products from McDonalds. Thus, every customer who is buying the products of the company
becomes its stakeholder even if they are occasional visitors.
3. Suppliers: They are the internal stakeholders who work with the company.
McDonalds depend on many suppliers for buying food and drinks for their stores. Thus,
suppliers play a vital role in running the company.
4. Government: They are the external stakeholders whose decisions influence the
company. The government takes an interest in McDonalds since they provide many

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opportunities for employment. The government also passes laws in the business interest of
the McDonalds.
5. Trade Unions: They are also the external stakeholders who work outside business.
These people ensure whether the rights of the workers including pay structure and work
conditions followed rightly. They are also responsible for accessing the risk of the
employees.
6. Communities: These are also the external stakeholders of the company. The
business of the company in a way depends on the community as they show interest in the
offerings on the company which helps in the easy running of the business.
2. Generation of Ideas and Concepts
a. Creating Ideas
The creation of ideas and concepts should be in a manner so that the company
receives the desired attention required (Peppard and Ward 2016). Therefore, the ideas for
improvising new menu, outlet renovation and introduction of digital order and delivery
should base on the following:
1. Starting Early: McDonalds should introduce the changes with a head start and not
wait for the reporters to write about the new system for innovation. To keep the conversation
going the company must have a rolling launch.
2. Introducing the New System to Influencers: The influencers include friendly
customers, prospects and bloggers who can be encouraged to avail the change in the system
and thereby put in their reviews
3. Briefing Industry Analyst: McDonalds must invest time for writing compelling
briefing requests to the analyst.

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4. Capturing the Social Space with Leaks: The Company should target the consumers
who are interested in the new system of the company through social media leakage of photos
and messages so that they can build interest among people.
5. Planning Something Unusual for Implementing the System: The Company can plan
to implement the new system through the creation of funny video or publish a survey that
supports how the new system with create the ground for innovation.
6. Involving the Partners: McDonald’s must include its partners who have a stake in
the company while implementing the new system
b. Evaluation of the Ideas
There evaluation process undertaken by a large company like McDonalds is
structured and done in a manner keeping in mind certain things (Ting 2013):
1. Those ideas chosen that will enable the innovation process of the company.
2. Complex ideas should get reviewed by experts in order to understand what is
necessary for their successful implementation.
3. The Company must deploy a middle manager for defending the idea to the
stakeholders, senior management and financial officers for getting a budgetary approval of
the idea.
4. The evaluation of the ideas done in a manner so that they are resource efficient
5. The ideas through identification of the implementation problems dealt with and
necessary actions taken to overcome them.
c. Explaining how your ideas are supporting Innovation
Business opportunity puts forward a possibility to the entrepreneur for successfully
filling an unsatisfied need. However, recognition of an opportunity depends on the
knowledge and experience of the employees (Holt 2013). In this regard, McDonalds seen to
make effective use of the knowledge base and maintain records of the industry analysis done

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previously for pointing market niches and new directions for exploiting profit. Thus, the new
system that creates an opportunity for innovation goes through careful assessment by the
means of an opportunity analysis plan. However, four sections of opportunity analysis are
follows:
 The introduction of innovative menu, outlet renovation and introduction of digital
technology in placing order and delivery can influence the company’s profit.
 The introduction of the system can affect the international and domestic market.
 Introducing the new system for innovation with the entrepreneur and the team
 Discussing the necessary steps for making the idea basis of business venture that is
viable
The ideas support innovation in McDonalds because the company offers its workers,
consumers and managers with calculability, efficiency, control and predictability (McDonald
2015). Thus, McDonald has considered as global capitalist organization responsible for
implementing systems that result in innovation.
d. Testing, Exploring and Challenging Ideas
This is a way of critically thinking about the assumptions and thereby testing them in
a systematic manner. However, a better alternative can be by simply asking people about
their needs and designing it through consultation (Heath and McDonald 2012). There is also a
better alternative to employ one or two young people in the implementation process. There
are also challenging assumptions that contradict the ideas put forward. The system ideas like
the innovation in menu, outlet renovation and introduction of digital technology for placing
order and delivery is solely based on assumptions that they might be quite well be accepted is
solely based on assumptions. Thus, validation of the assumptions is of utmost importance
before spending too much on a particular solution. Therefore, it is very necessary for
understanding the customer needs. Therefore, the new menu implemented by McDonald
needs acceptance by the customers in the presence of products of other competitive brands.
The outlet renovation also needs to provide the customers with an ambience that becomes

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acceptable. In addition to this, the digital technology for the order and delivery facility should
be convenient enough and acceptable to the customers (Aydeniz and Kirbulut 2014).
e. Selecting and Refining Ideas
The ideas should be refined and selected based on the following perspectives:
1. The Financial Perspective
The idea for system that results in innovation in McDonald should be refined and
selected keeping in mind the financial perspective that implies that they should bring in
business and ensure the profitability of the company (Fitzgerald et. al 2014).
2. The Customer Perspective
In this case, the system established for innovation should also be selected based on
customers perspective so that they are ensured greater convenience, lower prices and
solutions compared to their competitors (Châlons and Dufft 2017).
3. The Process Perspective
The system established for innovation also takes must take into account process
perspective which describes corporate synergies that is gained when multiple business unit
reap benefits through sharing of common processes like manufacturing, distribution, research
and purchase(Creswell and Poth 2017).
4. The Growth Perspective
While implementing the system ideas like menu innovation, outlet renovation and
digital technology McDonalds must consider the growth perspective of the company.