McDonald's and Disruptive Innovation in Australian Retail - HC3152

This report examines McDonald's disruptive innovation within the Australian retail sector, focusing on its current operations, and the application of disruptive innovation theory. It highlights McDonald's success factors in Australia, including franchising, international expansion, glocalisation, brand value, competitive pricing, free Wi-Fi, and a younger workforce. The report references academic literature to support its analysis of McDonald's disruptive strategies, particularly the concept of glocalisation, which allows multinational companies to adapt to local markets. The conclusion emphasizes that disruptive innovation is crucial for organizations in the fast-growing retail sector and that companies must adapt to changing customer needs to remain competitive. Desklib provides access to a wealth of similar reports and study resources for students.

MCDONALD’S
DISRUPTIVE INNOVATION…

INTRODUCTION
• MCDONALDS IS ONE OF THE WORLD’S LARGEST FAST FOOD CHAIN AND ALSO
ONE OF THE LARGEST IN AUSTRALIA.
• MCDONALD’S IS FORERUNNER AND PIONEER IN A LARGE NUMBER OF
BUSINESS INNOVATIONS THAT ARE LATER BEING ADOPTED BY MANY OF THE
OTHER COMPANIES ACROSS THE WORLD.
• IN AUSTRALIA DISRUPTIVE FORCES ARE THE FUTURE OF RETAIL AND EACH
COMPANY IS COMPETING WITH EACH OTHER TO BRING INNOVATIONS THAT
WILL ULTIMATELY DISRUPT THE RETAIL SECTOR AND BE AHEAD IN THE
COMPETITION.

CURRENT OPERATION OF THE SELECTED RETAIL
• MCDONALD’S IS THE WORLD’S LARGEST
RESTAURANT CHAIN IN TERMS OF REVENUE.
• CURRENTLY THE COMPANY IS OPERATING MORE
THAN 40000 RESTAURANTS THROUGHOUT THE
WORLD.
• THE MOST LUCRATIVE AND PROFIT MAKING
BUSINESS OF THE RESTAURANT CHAIN HAPPENS IN
USA AND MORE THAN 15000 OF THE COMPANY IS
LOCATED IN THIS PARTICULAR COUNTRY.
• IN 2017 THE GLOBAL REVENUE OF MCDONALD’S
WAS 22.82 BILLION U.S DOLLARS.

CURRENT OPERATION OF THE
SELECTED RETAIL
• THE RESTAURANT CHAIN HAS COME A LONG WAY
SINCE THEN IN THE COUNTRY PRESENTLY
HAVING MORE THAN 970 RESTAURANTS IN THE
COUNTRY AND EMPLOYING MORE THAN 1 LAKH
PEOPLE ACROSS THE VARIOUS LEVELS OF THE
ORGANIZATION.
• THE PRESENT NUMBER OF CUSTOMERS DAILY
WALKING IN THE VARIOUS RESTAURANTS OF
AUSTRALIA ARE PRESENTLY MORE THAN 2
MILLION DAILY AND THIS NUMBER IS INCREASING
QUITE HEAVILY WITH THE PASSING YEARS.

LITERATURE REVIEW
• ACCORDING TO CHRISTENSEN, RAYNOR AND MCDONALD (2015) THE THEORY
OF DISRUPTIVE INNOVATION IN BUSINESS THAT WAS INTRODUCED IN 1995,
HAS BEEN ACCEPTED BY MANY BUSINESS INNOVATORS AND IS REGARDED AS
A GUIDING LIGHT WHICH CHANGED THE COURSE OF BUSINESS PROCESS.
• ACCORDING TO PANTANO (2014) THE THREE MAIN AREAS WHERE FURTHER
ATTENTION MUST BE GIVEN IN THE FIELD OF DISRUPTIVE INNOVATION ARE
“THE INNOVATION MANAGEMENT APPROACHES IN RETAIL INDUSTRY, THE
DEGREE OF INNOVATION HETEROGENEITY, AND THE INNOVATION DRIVERS.
STARTING FROM THESE EVIDENCES.”

LITERATURE REVIEW
• CHRISTENSEN ET AL (2016) STATES “FOUNDATIONAL RESEARCH ON DISRUPTION HAS PRODUCED
EXTENSIVE CITATIONS AND PROVOKED VIBRANT DEBATES, BUT EMPIRICAL RESEARCH IN MANAGEMENT
HAS NOT KEPT PACE. SUCH INCONSISTENCIES WARRANT DEEPER REFLECTION AND PROVIDE THE
IMPETUS FOR EVALUATING RESEARCH ON DISRUPTIVE INNOVATION IN MANAGEMENT AND STRATEGY”.
• ROWLEY AND MCMURTREY (2016) POINTS OUT HOW MCDONALD’S HAS USED INNOVATION AND
SUSTAINABILITY IN ORDER TO REMAIN STEADFAST IN THE BUSINESS ALL OVER THE WORLD.
MCDONALD’S DISRUPTED THE RESTAURANT BUSINESS IN AUSTRALIA WHEN IT FIRST STARTED THE
RESTAURANT AND THE CONCEPT OF FAST FOOD AT A CORPORATE LEVEL WAS FIRST CONCEIVED IN THE
COUNTRY.
• KING AND BAATARTOGTOKH (2015) HAS WEIGHED THE VARIOUS USEFULNESS OF THE THEORY OF
DISRUPTIVE INNOVATION AND HOW IT IS RELEVANT IN THE RETAIL CONTEXT.

DISRUPTIVE INNOVATION BY MCDONALDS IN AUSTRALIA
• A FEW OF THE REASONS THAT MCDONALD’S HAS BEEN SUCCESSFUL IN
AUSTRALIA ARE FRANCHISING, INTERNATIONAL EXPANSION, GLOCALISATION,
BRAND VALUE, LOWER PRIZE MORE FOOD, FREE WI FI, YOUNGER
WORKFORCE.
• MCDONALD’S IS A MULTINATIONAL BRAND HOWEVER IT ADOPTS THE LOCAL
FLAVORS AND CUISINES IN ORDER TO ENTICE THE LOCAL POPULATION. THIS
IS ALSO KNOWN AS GLOCALISATION,
• THE CONCEPT OF GLOCALISATION IS ALSO ONE OF THE DISRUPTIVE
INNOVATION THAT HAS ALLOWED MANY MULTINATIONAL COMPANIES IN
BECOMING LOCALLY SUCCESSFUL.

CONCLUSION
• IT CAN BE CONCLUDED THAT DISRUPTIVE INNOVATION IS ONE OF THE MOST RELEVANT
AND EFFECTIVE THEORIES THAT HAS AFFECTED THE ORGANIZATIONS LATELY. WHETHER
OR NOT THE ORGANIZATION CAN IMPLEMENT AND ADOPT DISRUPTIVE INNOVATION
EFFECTIVELY IS DEPENDENT ON THE MANAGEMENT OF THE COMPANY
• INNOVATION IS THE ONLY WAY THROUGH WHICH DISRUPTION IS POSSIBLE IN THE FIELD
OF RETAIL. RETAIL SECTOR IS A FAST GROWING AND CHANGING SECTOR WHERE THE
REQUIREMENTS OF THE CUSTOMER IS ALSO CHANGING REGULARLY. THE COMPANIES
MUST KEEP UP WITH THE CHANGING NEEDS OF THE CUSTOMERS.

THANK YOU!