Establishing System For Innovation In McDonalds

Analyzing Current Organizational System

Discuss about the Digital Crime and Digital Terrorism Systems.

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. 

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 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.

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.

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 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

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 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.

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.

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 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.

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.
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

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.

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 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.

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 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).

Researching Current Information about Systems

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).

1. 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).

1. 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).

1. 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. 

The impact of the menu innovation will draw in more customers to test and try out their newly innovative products thereby leading to an increase in the revenue. A change in the structure through renovation of outlets will attract customers, as there will be introduction of service kiosk where customers can place in their orders and wait for the employees to deliver the services (Taylor, Fritsch and Liederbach 2014). The company also provided digital innovations like mobile ordering and payment facilities. This system if employed with efficiency will enable customers with faster delivery of food as customers are able to pay ahead of schedule and time. Through these facilities, the customer pay facilities reduced. Moreover, the digital technology also enables the company to customize their own order.

While consulting the Stakeholders McDonald discovered three problems that marketers usually face in implementing the system:

1. The products introduced in the new menu might not be acceptable or liked by the consumers
2. The outlet renovation with self-service kiosk might not be convenient for customers who are not tech savvy
3. The digital transformation considered as a product strategy for some marketers in transformation of the company while others might consider it a marketing strategy that aims that focuses on moving customer engagement and advertising from a traditional approach to digital approach (Janowski 2015).
4. The stakeholders also pointed out that once there is understanding of the digital transformation marketers face issues in implementing the strategy.
5. Moreover, the stakeholders did not want to remain engaged on an ongoing basis therefore, their reaction became slow to the change movement, resulted in lack of agreement, lack of interest in investing in initiatives for digital transformation.

The operational plan for implementing digital transformation in McDonalds as follows(18):

1. Ensure that the key staffs and senior managers participate in bringing in the transformation
2. Input from the customers, advisors, partners and employees gathered at all levels.
3. There should be benchmarking and analyses of other markets.
4. The mission, vision and strategic goals of the company reviewed and revised.
5. Revising and reviewing of business product/service offering and models
6. Leveraging technologies for enhancing communication, collaboration and operational practices
7. Updating expectations of performance management for reflecting emphasis on digital transformation
8. Developing a plan for continuous innovation and learning

The digital technology for order and delivery services adopted by McDonalds will have an impact in every part of the business as it involves considering the ways of engagement of the customers, approach of the staffs in dealing with the projects, applying for leave, running for their annual reviews and even claiming expenses(Berman 2012). However, with buy-in from the employee even people who are investing in the digital transformation will struggle for reaping rewards.

However, internal communication adopted through the following means: 

1. Through email marketing systems
2. Communication through internal blog
3. By setting up message boards and groups for supporting communication across departments
4. Through the creation of quick polls and surveys

Collective coaching enables teams to be acquainted with new methods of working. To adapt with the new digital technology that McDonalds plans to implement requires considerable coaching that will instill the necessary skills to the employees in dealing with the technology without any sort of external help.  Through proper coaching the company can get promising results in terms of customer service and profitability. There are also training programs implemented by the HR representatives in order to adapt manager and teams in order to equip them with the necessary means for welcoming the change. This however, depends on the kind of training session implemented. The more the program is devoted to the new technology the more effective impact believed to have. These sessions also helps in personal development about the work ambience when it is becomes necessary to follow collaborative approaches.

Identifying the Key Stakeholders

The innovation that is taking place digitally is only the beginning. McDonald has made an announcement of a mobile application aligned with advanced geo fencing capabilities that will be able to determine the customers who are approaching the restaurant thereby ensuring fresh food. This application will also provide facilities for mobile payment and let customers get their food without having to wait in the queue.

Digital innovations can however not only take years but also months to deliver when applied across McDonalds varied geographies with multiple system of legacy. However, McDonald adopted the digital technology with scale and speed compared to its competitors. The company is presently building application network making using of Anypoint Platform. Therefore, the application system of McDonald helps in connecting the proprietary e-commerce systems and back end databases for creating a set of application programming interface (API) reused and applied for nutrition, orders, customer location and offers (Hess 2012). The API rapidly used for composing customer-facing application for social, web, mobile and kiosk based on restaurants.

McDonalds have done a great job by launching systems that led to innovations that lie within the context of simplification of the menu, renovating outlets and digitations. The change in menu however, helped the company to increase its sales by 1.7% in the first quarter. Though is quite early to determine the success of the company but McDonalds plans to roll out the digital experience on a worldwide scale. The company is also able to change the perception of the quality of food amongst its customers.

The digital strategy adopted by the company should be able to drive digital maturity thereby building skills for realizing the strategy. The process adopted should get encrusted among the employees who should be properly trained to deal with the technology.  The technologies and system adopted by McDonald should also provide enough convenience to the consumers.

Conclusion:

The report concludes by describing about trailing the established system that involves presenting and developing a system proposal, determining the parameters and context, monitoring and reviewing the trial and opening of the improvement process.  There is also discussion about a development plan for implementation of the new system. The report not only describes the ideas and concept of the system but also deals with extensive research of the new system implemented so that it ensures innovation in McDonalds

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