McDonald’s: Pioneering Digital Transformation

Introduction

The food retail industry has been transformed by digital technology, and one of the effects of this transformation is the introduction of self-service machines. When an invention makes a difficult and costly business or sector easier to use, more convenient, more accessible, and more affordable for a wider range of people. It is common for disruptive inventions to follow a pattern, which looks something like this: a product or service begins in a niche market, then moves upmarket and reshapes the industry. The term “disruptive innovation cycle” is used to characterize this progression. The phases of development are outlined in detail by the disruptive innovation cycle. The process is riskier and takes much more time than the conventional method; but, once the invention has been introduced into the market, market penetration is accelerated and the influence on current markets rises. The majority of breakthrough innovations are developed by independent inventors and businesspeople, rather than by companies that dominate their respective markets. Large companies almost seldom make early investments in potentially game-changing inventions because the returns on such investments are often not attractive enough.

1. The Case for Change

1.1 Revolutionary Inventions

Most revolutionary inventions are created by outsiders and entrepreneurs, not market-leading organizations. Game-changing innovations are seldom lucrative enough for large firms to invest in them initially (Akcam, 2020). McDonald’s has never been a firm that shies away from experimenting with new ideas in any capacity. McDonald’s has been at the vanguard of its industry for many decades in several ways, including the development of the very first true drive-through window and the practice of outsourcing. Both of these innovations were pioneered by McDonald’s. Throughout a considerable chunk of the 20th century, this included the creation of novel food products as well as the pursuit of operational excellence. However, what it implies these days is using artificial intelligence (AI), advanced analytics, and digital transformation (Ma, & Wang, 2021).

1.2 Transformation

Accenture identified 8% of organizations as having pursued innovation boldly and productively, and McDonald’s is one of those companies. This means that McDonald’s is considered to be one of those businesses. As a consequence of this, the revenue of these so-called “leading corporations” has climbed at a rate that is more than twice as quick as the rate at which it has increased for the businesses that placed in the bottom 25% of the study group. Even though the Coronavirus pandemic has led to extensive lockdowns and forced restaurant closures all over the world, the international franchise’s revenue and development have remained stable. This is the case even though the disease has prompted widespread lockdowns (Ma, & Wang, 2021).

2. Capture Insights

2.1 Approaches and Techniques

A representative for McDonald’s was quoted as saying, “One of the key objectives of our development plan, Accelerating the Arches, is concentrating on our digital presence to create faster, simpler, and more customized experiences for our customers.” This comment was made to Restaurant Dive. We are continually introducing Dynamic Yield technology to new areas around the world. This technology is increasing the overall quality of the customer experience at McDonald’s Drive Thrush and kiosks in a range of various nations and regions all over the world.

2.2 Digital technologies at McDonald’s

To put it another way, the technology of the drive-through lanes was successful, but the technology of suggestive marketing did not live up to the requirements that were set for it McDonald’s, a beloved burger chain, is investing heavily in digital transformation. Since then, they’ve created an internal digital transformation team to serve clients faster. The three-person team has expanded to 130 tech-savvy employees who utilize technology to reduce client wait times and enhance retail operations. McDonald’s launched as a fast-food restaurant in 1955 to serve customers rapidly. Orders are now taken online for a fast, tasty supper. McDonald’s service has improved thanks to the digital revolution. They achieve this through digital ordering kiosks, smartphone applications, and table service in certain places. Their machine learning-powered dynamic menu displays have cost hundreds of millions of dollars over the previous several years. Based on real-time data like time, weather, and consumer behaviour, an AI-powered touch-screen ordering system would provide each customer with a customized ordering experience. They added an AI speech recognition system to accept natural language commands. These measures reduced customer wait times by a minute and improved order accuracy and speed, according to Forbes. (Batchelor, 2011).

3. Make Fast Decisions

3.1 Awareness of Changes in Its Market

With its most recent acquisition, McDonald’s will have the ability to link supply and demand in a manner that has never been accomplished before. Although McDonald’s has been using analytics in its supply chain for quite some time now, this will be the first time it will be able to do so. This is something that has not been attempted in the past at all. If we are successful in exercising some degree of control over the amount of demand at the restaurant level, we will be able to lower the amount of waste that we generate and construct a supply chain that is more efficient throughout the entirety of the organization. This will allow us to reduce the amount of waste that we produce. According to Easterbrook, what they had not done was begin to connect the technologies and have the various aspects interact with each other. This was one of the things that they had not done. According to his argument, they did not accomplish this at all. “To effectively make the transition from mass marketing to mass personalization, what are the steps that need to be taken?” “What are the actions that need to be taken?” To do this, you will need to liberate the data that is held inside that ecosystem in such a way that it is advantageous to the client.

3.2 Decisions making process

McDonald’s is a well-known and well-loved chain of fast-food restaurants, but the corporation is also investing considerable investments in the digital transformation of its business. Since then, they have developed their very own in-house digital transformation team to continue working toward their goal of providing timely and efficient service to their customers. Their objective is to provide prompt and effective service to their customers. What started as a group of three people has grown into a group of more than one hundred and thirty tech-savvy experts who work behind the scenes to decrease the amount of time that customers are required to wait in line and to enhance the overall operations of each of their shops by utilizing technology. (Bachelor, 2011).

3.3 Artificial Intelligence System

Following this, the data from the whole McDonald’s supply chain could be cross-referenced, and the system could then offer suggestions for which goods would maximize both profit and customer delight while also making the most effective use of the available supplies. This would make it possible for McDonald’s to make the most of the resources they now have at their disposal. If they achieved this, McDonald’s would be able to get the most use out of their inventory while simultaneously increasing their sales to the point where they could reach their full potential in terms of revenue. If you could manage personalized ideas and supply chains in real-time for products that are either brand new or seasonal, you would be able to take advantage of a significant competitive advantage. This is a perfect illustration of a situation in which having such talent might prove to be beneficial. The new strategy is going to be of the highest significance in helping with the management of stock levels since it is much more difficult to predict the demand for various commodities in several different areas. This makes it particularly important that the strategy be implemented. In addition to this, it will be of tremendous aid in reducing the likelihood that there will be any shortages (Kane, 2016).

4. Acquire and Engage Talents

4.1 Approaches to Make Informed Decisions

When the word “metaverse” is used, people are referring to the “next level” virtual platforms that already exist as the “metaverse.” Individuals will be able to interact with one another as well as with companies such as McDonald’s in settings that are not only immersive but also permanent if they make use of these platforms, which will make it possible for them to do so. It should come as no surprise that McDonald’s is one of the many companies across the world that see it as the next big thing in marketing and as a method to enhance the whole experience they provide for their consumers. The restaurant sector has submitted patent applications, which suggests that it is actively working toward the objective of developing “virtual restaurants.” This implies that the industry has declared its desire to build “virtual restaurants” (Mohapatra, & Singh,2012).

4.2 Metaverse

McDonald’s has decided to use this approach as the overarching framework for the way the firm operates. In addition to this, it plans to sell virtual goods, which may include branded clothing and other items that customers can use to decorate their avatars or virtual dwellings in the metaverse. These items will be available for purchase shortly able to make purchases of these items directly from the website of the firm. This is a component of the strategy that they have devised to grow the number of customers that they serve. The company’s patent applications reveal that it is also interested in developing NFTs that would enable the digital items that it creates for the metaverse to be unique, limited edition, or one-of-a-kind. This would be possible due to the company’s interest in developing NFTs that would enable these characteristics. The fact that the corporation is interested in building NFTs that would allow these qualities makes this possibility a real possibility. This is something that could be done if the corporation were to commit to the research and development of NFTs that would make it possible for these functionalities. One possible way to see this is as evidence that the corporation is considering manufacturing collectors’ goods or individualized swag for promotional purposes. (Selbig, 1990).

5. Creating Digital Ready Cultures

5.1 Role of the Leader

At this time, the business has not included a digital strategy in its entire plan as an integral part of its operations (Jones 2014). McDonald’s is now integrating several digital solutions; however, the firm still has to educate its staff on how to make use of these technologies to raise productivity and improve the value that it gives to consumers (Peter & Olson 2010). The reporting formats that are offered by the various technologies employed by the organization must continue to be relevant to the operations that are presently being carried out in the company. These technologies are utilized by the organization. Self-service kiosks, for instance, which provide customers the ability to make their orders, need to be programmed with the appropriate menu items, prices, and the current time so that staff may interact with the technology in a manner that is relatively stress-free.

5.2 Key Attributes of Information System to Management

The strategy that McDonald’s has in place for its online business includes the following present dependencies, which are detailed in the following list. The organization needs to employ mobile applications that have a platform to handle the information that is acquired and delivered to the apps for use by consumers and workers. This platform is currently used by the company. In addition, the business depends on third-party payment and information system service providers to manage its solutions. This is the case even though it has an internal resource that is accountable for organizing the enhancements to the company’s IT infrastructure. Within the company, a new office has been established with a concentration on digital issues; the major responsibility of this office will be to handle the development of new initiatives. Additionally, it is predicted that this would be beneficial to the brand in the long run (Frost 2015).

6. Steer Collaboration

6.1 Initiatives

The process of making decisions may include the gathering of information, the establishment of shared objectives, the discovery of management options to choose a particular plan of action, and the subsequent implementation of the plan. Lastly, the process of making decisions may include the subsequent implementation of the plan. By going through this process, the management of the company will be able to choose the strategy that is going to be the most successful in terms of making the company more competitive and putting it into use. In addition, it is widely acknowledged that the act of deliberating and settling on a course of action is an essential component of effective strategic management. This is a result of the fact that the decision-making process enables the organization to arrive at an effective solution to a specific issue or problem (Granlund,2015).

6.2 Collaborative tools

The company needs to have the ability to make strategic choices on the company’s future for the company to be able to continually guarantee that the strength of the business is maintained. The capability of making wise judgments is one of the fundamental qualities that may be related to the success of the business in attaining its major goal and primary objective. This success may be directly linked to the success of the company. This solution is beneficial since there is a possibility that it will make the company more competitive and it will assist the firm in thriving in the present condition of the marketing environment (Campbell, Evans & Storehouse, 2002). However, disproven though choices are thought to be the single most important aspect of having strategic management, the process of making decisions is still considered to be a difficult job to deal with.

7.1 Attributes of a leader

Cameron (2012) suggests that in addition to adopting a democratic style of leadership, the executives at McDonald’s should also embrace a unique type of leadership known as situational leadership for the company to realize its strategic goals. It would be beneficial for the management team at McDonald’s to cultivate a global and charismatic style of leadership so that they may focus more of their attention on the internalization of the business and the expansion of existing markets. For McDonald’s to be successful in emerging areas, the upper management there has to design and execute a global leadership strategy. Only then can the corporation hope to compete effectively there. According to Wood and Brother (2008), a global leader should have prior industry experience, global strategic thinking, good forecasting ability, and flexibility, and should be highly sensitive to cultural diversity. Additionally, a global leader should be able to communicate effectively across cultural boundaries. In addition to this, they said that a successful global leader should be able to interact with people of different cultural backgrounds.

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