Comprehensive Report: Managing Innovation at McDonald's

This report provides an executive summary and comprehensive analysis of McDonald's innovation strategies. It examines the company's innovation plan, focusing on customer satisfaction and employee well-being. The report details McDonald's innovation audit, performance, and capabilities, highlighting its market research, new menu launches, and digital innovation. It also discusses the challenges faced during innovation implementation and the measures taken to overcome them. The report concludes with insights into how innovation helps McDonald's expand its growth, improve strategies, and enhance customer experience in the future. The company focuses on core competencies, capabilities, and operational goals to achieve its strategic vision and maintain its position as a segment leader in the fast-food industry.

MANAGING INNOVATION IN
BUSINESS

EXECUTIVE SUMMARY
Managing innovation is a key concern of an enterprise as it helps the firm in managing
flow of goods and services in accordance to consumer needs and wants. The report is focused on
evaluating innovation plan of McDonald's, one of the leading food provider across the UK. The
focus of firm is on serving consumer satisfaction regardless of profits and revenues. However,
from the study it has been found out the in early stages innovating making food services was
critical because it holds the risk of consumer acceptance. However, with positive consumer
repose, it has been derived that core capabilities of companies is dependent on staff satisfaction
for which the major focus of firm in on maximizing health and safety needs of employees.
On the other hand, as per past and first innovation capabilities of Mc Donald's, it has
been analysed that restaurant is a segment leader and experience long-standing growth due to
quality of food services. The aim of firm is to offer consumer centric food services, with the
helps of which company is efficiently able to make creativity in food services Apart from this, it
has been identified that the major focus of food business is on market research which helps the
enterprise in determining need of successful innovation.
This report will also discuss about the areas where McDonalds has implemented
innovation. also, what measures they have taken and what strategy was followed by them in
implementation. in this report it is also shown that how innovation has helped McDonalds in
enhancing their growth. also, it is discussed about how the need of innovation was identified.
moreover, about the problems that was faced by McDonalds while implementing innovation and
what actions was taken in order to overcome them is described.
The report will give a brief overview of how innovation will help McDonalds in
expanding their growth. Along with this, it is shown that how innovation in methods and process
will lead to developing products and services so that customer satisfaction can be increased.
McDonalds has also launched different menu that has helped them to attract large number of
customer. It has also helped them in customizing methods and reducing cost. At last it is
described that how innovation will help McDonalds in the future in improving their strategies.
The company will be able to reduce cost and expand in different markets. Also, innovation will
help in providing new experience to customers.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Company overview.....................................................................................................................1
Innovation audit..........................................................................................................................1
Innovation Performance and Capabilities...................................................................................2
Industry: Future Innovation.............................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Innovation is simply a new idea, device or method which can be used as application of
better solutions that helps in meeting requirements of market. Innovation is a crucial part of
business growth. Innovative ideas should be replicable without being too expensive and should
be helpful in fulfilling needs of people.
Innovation in organisation is important as it gives companies a status in market and also
provides a better communication to developing markets. Being innovative should always be a
part of companies approach. MC Donald are engaged in selling hamburgers, sandwiches, French
fries, wraps etc. They use innovative technique mechanism to sell product. Innovation audit is
used by Mc Donald to understand how effective is organisation to manage innovation
MAIN BODY
Company overview
Mac Donald restaurants are being opened in 120 countries and territories. MAC Donald
is headquartered at Oak brook Illinois. Mac Donald provide both counter service and drive
through service. It has many separate stations for placing, paying and picking up orders. Mac
Donald provides quality burgers, sandwiches, wraps, cold drink, French fries etc. It also contains
play grounds which are known as Mac Donald play place.
Mac Donald has been termed as largest private sector employer in world. Workers have a
huge benefit of working in healthy and safe working condition provided by mac Donald.
Television has played a huge role in advertising products of mac Donald. Mac Donald have use
every aspect of selling innovative products to consumer which has lead to large business growth
(Cox Pahnke and et.al., 2015). Mac Donald innovation includes various items like happy meal,
mac flurry, big mac, egg mac muffin etc. These innovations has helped them to make greater
profit.
Innovation audit
Mac Donald use innovative audit to know about how effective people are in managing
innovation. Mac Donald includes a procedure to know about management of innovation where
workers are asked anonymously to give their opinions on different aspect of management of
innovation such as ways ideas are generated. Five aspects of innovation management includes
prioritise, implementation, people, culture and organisation.
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By innovation audit Mac Donald also tries to understand current innovation process,
assessing capabilities before making any changes, effective utilization of human and financial
resources, benchmarking performance of workers against best practices, developing an action
plan for future development.
Mac Donald also analyse its innovation by looking at cost of failures, average time take
to react to market shifts or changes, number of ideas implemented. Innovation audit for mac
Donald is an important step of creating a customised solution for precise needs of consumer.
This audit develops a suitable set of metrics which helps in better addressing problems which
affect innovative performance of organisation and helps in obtaining some quantitative and
qualitative results by surveying all suitable people involved in innovation process. Innovation
audit helps to investigate the core capabilities of companies and improves practices, processes so
that Mc Donald can prosper more all over the world (Wang and et.al., 2015). It is also necessary
because many companies invest in huge amount to obtain profit and grow at large scale. There
should be consistent flow of ideas and innovation processes which consume less time. Opinions
of individuals are considered at different aspects and this helps in determination of loopholes in
the company. It also clarifies where Mc Donald is required to focus more to increase innovation
process. It mainly includes the stages like innovation strategy, idea generation, selection,
implementation and organisation. Main questions are structured and resolves out. Prioritisation is
given to main issues and these are classified into innovation which leads to outputs. Superior
management deals with innovation policy and handles innovation investment decisions. There
transparent and clear specification of complete business structure. Business environment is
completely monitored by Mc Donald management team. Finally, innovation strategy combines
all areas and make it effective (Gates and et.al., 2015).
Innovation Performance and Capabilities
Mc Donald tries to keep its promise and always tries their plans to clean up their supply
chain.
Innovation:
Consistency and innovation work together at Mc Donald. Being consistent with major
components doesn't mean that selling of the products or even in the manner it is delivered
remains the same. Franchises and innovation rooting from the customers have played a crucial
role in Mc Donald's making out off stagnation over the years. It added a 'drive- thru' when it
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faced a problem of customers getting off from cars wearing fatigues. Few products that were
introduces in the company after franchises were developed are Happy Meal, Filet-O-Fish, Big
Mac, Hot Apple Pie, Egg Mc Muffin and Mc Flurry. These products hold snack periods and
meal times of customers which allow profitability in the business. But it is the policy of Mc
Donald not to effect consumer experience after introducing fresh item. Another for its success is
its capability to weather storms (Tonkin and et.al., 2016). It has faced various weather
controversies and challenges. It has many lawsuits which has been directed at different issues
and has been addressed to huge amount of negative press. It prioritizes mainly on operational
goals. It has committed to attract breakfast customers. Over the last 2 years new innovative
products are targeting the on-go-breakfast eater like Mc Griddle product and there has been
improvement in the coffee beverages Mc Donald have been looking for new partners in various
areas and more workers tend to work from home or remotely has also influenced restaurants.
Matter of convenience arise from consumer's side. It has piloted in few Florida cities in 2
months. They have additional pilot locations. It has created new opportunities for innovation. It
has brought right products to market. A new food item can be launched and an individual can
develop a franchisee. This idea can be spread in the market. This process produced some bid
winners like Egg Mc Muffin breakfast sandwich, the Big Mac and kid-friendly (Romens and
et.al., 2015). As this company develops, Mc Donald has approached centralised innovation
approach. It will continue to add new items its domestic stores and there will be launching of
three different stores that would be classic Big Mac. It has introduced renovated restaurants with
bold red and yellow colours. It is committed to advanced and modern burger company where
employees like spend time in front of restaurants and offer food directly to tables and traditional
dining hospitality is considered. Innovative products should be easy to prepare, must be tasty and
inexpensive.
Capabilities
Mc Donald is a segment leader and experience long-standing growth within the fast food
industry. It s recognized due to its quality and service. It has provided the 'world's best quick
service restaurant experience' as it began to lose its strategic vision. It is one of the largest
corporations in the world. Its assets include goodwill, investments, miscellaneous as well as
equipment and net property (McDonald and Pyeritz, 2017). Tangible resources help in the
advancement of and expansion of Mc Donald. Financial, physical, human and organizational are
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some of its resources. Its core competency has embedded the entire group to develop and execute
to world class standards. Its more capabilities include point sales of data analytics and alignment
of marketers and software developers. It should be known pretty well. This is the primary sphere
of expertise where the collective learning is built on skills and knowledge results is differentiated
for the customers and this created competitive advantage in the market. Another capability is
brand management of the company. It has various trademarks that involves designs of buildings
as well as unique names of their menu names like Mc Chicken and Mc Double. Capabilities may
also be concerned with the strategy which matches with the firm resources that became unstable
and so more focus is there on formulating strategies (Costanza and et.al., 2017). Mc Donald aims
at translating operations and directions into capabilities. These operations provide precise
directions that conduct each and every activity. Operating manuals are referred to the course of
action where tasks convert into a routine. Standard fast food products are produced that allows
Mc Donald worldwide to operate. Company can articulate the processes as a part of capabilities
which can be considered as an idea of systematization. It capability is mainly implementing Mc
Donald's system and is followed by set of rules. These operating practices became part of every
employee which provides complete attention to training programs. Furthermore, areas of
capabilities include inbound logistics, managing the supply of materials and food to restaurants
properly through third party operators, quality development which collaborates with perfect
suppliers (Raine and et.al., 2016). It also involves long term marketing objectives which should
be SMART i.e. specific, measurable, achievable and time bound. Its targets should be
measurable and specific that could be attained within time limit. It uses SWOT analysis to
determine its strength and weaknesses. Autonomy is given to the franchises of company in
analysing marketing mix.
Industry: Future Innovation
Mc Donald has made digital innovation in 18 months. There has been no holistic
approach of the digital. In Silicon Valley, zaki was recruited to innovate customer journey in two
main regions namely: customer experience and customer engagement. Innovation has been done
at ordering systems or by building products. As they want their own future and skills switching is
done from agency reliance to bring it in house. Engagement of customer is very important for
Mc Donald. This can be done through proper shipping of products, social networking sites,
mobile apps for which customer have a reason to continue using this. It has reconciled corporate
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and start up teams. Whren it first started spreading in various markets its main aim was to alter
eating habits. Now there is absence of competitors on overseas. It is heavily saturated in foreign
market. It is becoming more competitive and adjusting accordingly. Thus, there is a constant
battle for autonomy (Costanza and et.al., 2017). It is now acquiring and capturing preferences of
local market and customs. Some allowed has been some flexibility in Mcdonald's international
countries. There is complete freedom to add delicacies in the menu in foreign market. It uses
combination of methods to control thousands of franchises in the system. Cultural approach
ensures the maximization of their potential in which there is no interruption of entire corporate
plan. It has long term plan that aims at technology and convenience and attempts to triumph the
heart of customers from competing quick-service restaurants. In coming years, it announced
mobile order and paid 20,000 restaurants at the end of 2017 and wanted to continue its growth
rate in delivery process. But its pace with meeting customer expectation has not been fulfilled. It
is focussing on convenience, value and creating meaningful improvements in quality. It also
deploys its acceleration in 'Experience of the Future' designed in U.S. that incorporates table
service and kiosk which focuses on functionality of mobile apps and perfection in modern and
exciting restaurant environment (Leberman and McDonald, 2016). In 2018 its new items would
include fresh beef burger that would attract customers and increment average spending per
customer.
Mc Donald also focuses on launching $1, $2, $3 menu that would look forward bringing
value-conscious-customers. These menus offer cost efficiencies and gives surety about healthy
margins. MIX by Sprite Tropic Berry drink would be served in various nations by 2018.
Impressive use of technology is used by Mc Donald which helps in customizations and
personalized marketing. These efforts help in company's re-franchising efforts and aims at
increasing its business and profitability till 2018. Customer experience are focussed and costs are
reduced that includes consumer-facing technology. Vegan Burger in Finland and Sweden are
some of the successful trials. It ensures that all customers should visit their restaurants and has
opened many branches in foreign countries (McDonald and Smith-Rowsey, 2016). It has many
strategies and planning for its branches. Velocity Growth Plan has been introduced in 2017.
Certain number of risks and uncertainties are involved in forward looking statements.
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CONCLUSION
Thus, it is concluded that Mc is leading company in the fast food industries. It has used
its opportunities, capabilities to open up branches in various other foreign countries. It has taken
advantage of digital technology and consumer expectation is its main preference. It has planned
many things for future innovations and various delicacies has been arranged for upcoming years.
Managing innovation is major concern for it and it focuses on cost and all types of strategies to
endorse changes.
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REFERENCES
Books and Journals
Cox Pahnke, and et.al., 2015. Exposed: Venture capital, competitor ties, and entrepreneurial
innovation. Academy of Management Journal. 58(5) pp.1334-1360.
Wang, S., and et.al., 2015. Toward a stabilized lattice framework and surface structure of
layered lithium-rich cathode materials with Ti modification. Physical Chemistry Chemical
Physics. 17(15). pp.10151-10159.
Gates, M., and et.al., 2015, March. NASA's Asteroid Redirect Mission concept development
summary. In Aerospace Conference, 2015 IEEE (pp. 1-13). IEEE.
Tonkin, E., and et.al., 2016. History and ethnicity. Routledge.
Romens, and et.al., 2015. Associations between early life stress and gene methylation in
children. Child development. 86(1). pp.303-309.
McDonald, J. and Pyeritz, R.E., 2017. Hereditary hemorrhagic telangiectasia.
Costanza, R., and et.al., 2017. Ecosystem Services.
Raine, R., and et.al., 2016. Challenges, solutions and future directions in the evaluation of
service innovations in health care and public health.
Costanza, R., and et.al., 2017. Ecosystem Services.
Leberman, S. and McDonald, L., 2016. The transfer of learning: Participants' perspectives of
adult education and training. Routledge.
McDonald, K. and Smith-Rowsey, D. eds., 2016. The Netflix effect: Technology and
entertainment in the 21st century. Bloomsbury Publishing USA.
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