Contemporary Management Issues: McDonald's & AI Case Study BA

This case study examines McDonald's strategic shift towards integrating artificial intelligence (AI) into its business model, particularly through the Velocity Growth Plan and the acquisition of Dynamic Yield. It highlights the company's efforts to personalize customer experiences, improve automation, and leverage customer data. The report discusses the role and impact of AI in areas such as mobile ordering and catering to customer preferences. It also touches upon challenges like franchiser criticism and data privacy concerns. Ultimately, the case study reflects on McDonald's potential to lead in the era of AI through effective strategic management and strong leadership, despite the complexities of implementing new technologies across a vast network of restaurants.

Contemporary
Management Issues in
21th Century

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
Overview of company and their Artificial intelligence technology.............................................1
Four building block of strategy ...................................................................................................2
Role and impact of artificial intelligence.....................................................................................3
CONCLUSION ...............................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Artificial intelligence refers to simulation of human intelligence in machines which is
developed in such a way to think like human being and copy their actions. It is one of greatest
technology which becomes trend of market. This technology has changed overall business
functions of enterprise because it helps them to analyse the behaviour and preference of their
customers. All large organisation of world uses artificial intelligence in their business to achieve
great heights in their business. The application of artificial intelligence helps organisation to
operate their business along with advance machines and software which are not required to be
command and working in their own thinking. There are large number of benefits are present for
the usage of artificial intelligence and the feature of their decision making on past data of
customers helps them to attract the customer towards organisation. McDonald also one of
organisation which uses this technology in their business to make them more competitive in
market. This report provides description related to impact and role of artificial intelligence for
organisation and their strategies.
MAIN BODY
Overview of company and their Artificial intelligence technology
McDonald's is an American multinational food company which was founded by Richard
and Maurice McDonald's in year 1940. In their early days management of company provide
barbecue grill eatery services to their customers but later open different types of restaurants. As
per the record of 2019 the management of enterprise operates more than 37000 restaurants in
1230 countries of world which helps to make huge revenue. The strategist of enterprise are
always sop competitive which analyse the market and makes changes in organisation according
to need of demand (Dumas and Beinecke, 2018). There are different types of strategies are
develop by management which makes organisation more sophisticated for customers.
In the year 2017, the leaders of company adopted new strategy plan which was called
Velocity Growth programme. Under this programme, the management of organisation plan to
transform whole which model as per need of time and customer experience. New plan of
enterprise are having two objectives such as to provide services of home delivery and mobile
ordering with the helps of McDonald's mobile application. The other objectives is to restructure
of all restaurant of company and makes them more innovative and attractive for customers.
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In year 2018, the strategist of company collaborates with well known food delivery application
of US called UberEats and start delivery of online food to over 5000 locations of US and more
than 12000 locations worldwide. The online sale of company achieves effective growth and
becomes beneficial for organisation in terms of revenue creation. McDonald's plan to restructure
all their stores under which they try to install digital menus inside the stores and drive-through
areas, digital self-serve ordering kiosks inside the stores, and designated parking spots for the
curbside pickup of mobile orders. These features helps enterprise to attract large number of
customers which helps the management to increase their sale.
Acquisition of Dynamic yield is one of the changing factor for enterprise which
completely changed model of business. It is technology company which specialised in
personalising customer experience with help of machines and strengthen artificial intelligence.
This technology of Dynamic Yield helps to analyse the preference of customer with help of their
data and recommend them products of company. This approach of company positively impacts
sale of company product and also increases involvement of customer under organisation (Gul
and Bano, 2019).
Four building block of strategy
Strategy refers to set of actions developed by organisation for maintaining survival and growth in
market. It is valuable and effective approach of business which enables enterprise to develop
different types of strategies for achievement of goals and objectives of organisation. The
management of McDonald's also developed number of strategic plan for competitive advantage
and Velocity growth programme is also one of them.
There are generally two postures of strategy are present which is followed by enterprise such as
 Offensive :- conceding
 Defences :- Confrontation, competition and cooperation
Conceding :- It refers to concede the aspect which is initiate by opponent and believes to
be true. It is related to those approach under which company concede the force of their
opponents in market and not performing any efforts to overcome their competitors. The leaders
of McDonald's does not follow this approach because they always try to overcome their
competitors and Velocity growth plan is example of this approach.
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Confrontation :- It refers to those approach of organisation under which they directly
takes actions against their competitors to solve disputes or to focus on achievement of goals and
objectives.
Competition :- It is related to indirect actions against competitors by involving the third
party in competitive arena. The strategist of McDonald's always try to develop competitive
strategies to overcome their competitors. The competitive pricing policy of organisation is best
example of this.
Cooperation :- It refers to those approach of management under which they collaborates
with other parties of market for achievement of their goals and objectives. The collaboration of
McDonald's with UberEats reflects cooperative approach of leaders. This approach used by
company due to lack of resources such as technological expertise (Howie and Tauchert, 2019).
Role and impact of artificial intelligence
Acquiring of Dynamic yield is one of greatest decision of strategist of organisation which
helps company to transform the conventional model of business into modern day business.
Before applying artificial intelligence, the management of company are not fully able to cater the
preference of customers which in return to disables company to grab market opportunities. There
are different types of roles are played by artificial intelligence in McDonald's are given below:
Customer data management :- Data of customer is valuable aspect for enterprise which
can be use by company for their benefits. The management of McDonald's helps controls more
than 30000 restaurant worldwide which enables them huge customer data. Technology of
artificial intelligence helps company to manage this data online.
Improves automation :- Use of automation and machinery is primary need of any
business in this competitive and modern business. The acquirement of Dynamic yield enables the
organisation to use different types of technology and machinery which helps to make business
more simplifier. The use of automation in business also helps the business under aspect of
customer attraction.
Mobile ordering :- New technology which is used by McDonald's provides facility to
customers to place order of food with their mobile phone while sitting on their table in
restaurant. It is very important and attractive feature of company which reduces waiting time and
crowd on counter. It also helps to reduce efforts of customer and makes them feel comfortable in
restaurant.
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Cater customer preference :- There are different types of features are present under the
programme developed by Dynamic yield and analyses of customer data is one of them. This
software analyse past data of customers on basis of their previous orders and recommend them
food packages according to their preference and also on basis of climate (Ndlovu-Gatsheni,
2021).
The application of Velocity growth plan is one of the important and valuable decision of
organisation which enables enterprise to use artificial technology under restaurants of company
which helps to manage the work in effective manner. There are different types of impacts are
present which is important to be analysed so that effective judgement can be made to do so.
 The impact of company's renovation programme of restaurants leads to increase criticism
from franchiser. The management of company promise to compensate franchiser for
renovation up to 55%. There were different types of franchiser are present which reflects
that company does not support them financially which leads to creation of union.
 The data handling features of company creates many controversies for company in terms
of data breach and usage of personal data.
Yes any Behemoth can lead in era of artificial intelligence if strategic management of
company are having effective approach of business. As compare to management of McDonald's
business of company spread in large parts of world with their conventional business model under
which application of artificial intelligence is not easy to set in huge number of restaurants. The
effective approach and strong leadership of company makes possible to make food giant to lead
in era of artificial intelligence (Popkova and Gulzat, 2019).
CONCLUSION
It is concluded from this report it becomes possible for any established organisation to
implement new trends in their business if effective efforts and approach can be used in
organisation. This report concludes description related to impact and role of artificial intelligence
for organisation and their strategies.
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REFERENCES
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Howie, G. and Tauchert, A., 2019. Gender, teaching and research in higher education:
Challenges for the 21st century. Routledge.
Ndlovu-Gatsheni, S.J., 2021. The cognitive empire, politics of knowledge and African
intellectual productions: reflections on struggles for epistemic freedom and resurgence
of decolonisation in the twenty-first century. Third World Quarterly, 42(5), pp.882-901.
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Popkova, E.G. and Gulzat, K., 2019, May. Technological revolution in the 21 st century: digital
society vs. artificial intelligence. In Institute of Scientific Communications
Conference (pp. 339-345). Springer, Cham.
Stromquist, N.P., 2022. Women’s Education in the 21st Century. Comparative education: The
dialectic of the global and the local, p.187.
van Kemenade, E. and Hardjono, T.W., 2018. Twenty-first century total quality management: the
emergence paradigm. The TQM Journal.
Woldeab, D. and Brothen, T., 2019. 21st century assessment: Online proctoring, test anxiety, and
student performance. International Journal of E-Learning & Distance Education, 34(1),
pp.1-10.
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