Innovation Case Study
Does McDonald’s taste good?
66 years of innovations that built the greatest ecconomy around it.
Why you think McDonald’s is still out there. It is just a burger shop in the neighbourhood. Why people are not fed up with eating it, even though it’s 66 years old.
Maybe we all have these questions. I am a design thinking student from NIFT. This is an attempt to understand innovation using Dublin’s 10 Innovation Model Framework. Using the framework, we are able to see that innovation is not one creative idea but a series of improvements within the organization that creates a business that stays innovative.
But now I am excited to share what I found.
A funny clown in red and yellow is not just about selling hamburgers. It is the biggest fast-food chain with 37,000 locations, in 115 countries. It is the fifth- largest real estate company in the world, with 150 billion in market cap. Innovation is not a one-time effort, It should be continuous. and Mcdonald’s knows it. From culinary to customer engagement there is innovation in every stage.
“To be successful, you must be Daring, be First and be Different.” -Ray Kroc
Doblin’s 10 types of innovation
Is a simple and innate framework. It is a useful tool to identify and enrich an innovation, or to analyze the competition.
The framework is organized into 3 color-coded classes such as Configuration, Offering, and Experience. Later which is again subclassified into 10 bits of innovation.
PROFIT MODEL — The Lodha of Burgers
Mcdonald’s is built not on a hamburger, but by owning the land it’s cooked. which provided them with 2 things, a steady upfront revenue stream. and a greater capital for expansion.
McDonald’s, which started with hotdogs and barbecue, is now the 5th largest real estate company in the world. About 82% of the company revenue is generated from Franchises. Referred to as the Sonneborne financial model of franchising is the ketchup that made billions to Mcdonald’s.
The same is followed by a lot more fastfood chains as their profit model.
Sonneborn proposed the idea when he found out such a great establishment like Mcdonald’s was facing financial issues. Later he analyzed the ledger, and how the current franchising system worked. and conveyed to Ray that he doesn’t understand which business he was in.
NETWORK — A Coca Cola alliance
Customers at Mcdonald’s, do enjoy a soft drink (Coca-Cola) along with their happy meals. Which generated mutual revenue for both the partners.
“When you’d ask Coca-Cola in which countries it had the biggest sales, it would say something like the United States, Japan, Germany and McDonald’s — and in that order. It was kind of funny but it was true.” (David, 2014).
McDonald’s and Coca-Cola shared the same mission to expand Globally. In 1955 Mcdonald’s company needed a beverage supplier. They leveraged the partnership as a capital investment.
STRUCTURE — The Hamburger University
Hamburger University is a training facility to direct potential restaurant managers, mid-managers, and owners or operators in the restaurant business. Founded in 1961, the university is Mcdonald’s farmhouse idea for talent hunt, where they acquire the right People.
The graduates from the university are more than Qualified to run a Mcdonald’s restaurant. Along with the huge expansion, finding the right people was a hectic task. University was an ideal solution.
PROCESS — It is literally fast
Mcdonald’s is one of the few fast-food chains that are genuinely true to their name tag. Through years of innovation, the restaurant has advanced a culinary where the order is delivered at lively.
The Drive-thru speed of Mcdonald’s is 273.29 seconds. where the vehicle line is also one of the highest.
With the heavy acceptance among the Customers, there was a rush to the restaurants, which forced McDonald’s to be faster than usual.
PRODUCT PERFORMANCE — the packaging
Mcdonald’s just like Apple believes in a minimal unboxing experience. Packaging is one bit where Mcdonald’s did put money for innovation. The newer vesions are distinguishing and functional.
Redesigning the packaging is part of broader brand innovation. With so much fresh and new at McDonald’s, the redesign made more sense.
PRODUCT SYSTEM
PlayPlaces & Parties is one of the initiatives to attract stressed-out parents. with a tagline “ fun for kids and stress-free for you. “ Mcdonald’s helps you with your Happy meals, Cake, decoration, and party favors.
McDonald’s Arch card is Mcdonald’s corporate way of saying thanks. Arch cards are gift cards for free fries at any McD restaurant. You can either gift these to your employees or customer as a gesture. or keep it for yourself for free fries.
Every Mcdonald’s restaurant offers FREE wi-fi in their premises for customers to stay connected.
As mentioned earlier, Mcdonald’s is not in the restaurant business but in Real estate. With online deliveries and Drive-thru, Using the plot lively is one concern, that made Mcdonald’s rent out the restaurant area for Parties and play places.
A bigger demography of Mcdonald’s are the Corporate workforce. Arch card created a stronger bond.
SERVICE — McDonald’s Guarantee
McDonald’s is the first fast-food chain to launch a policy guaranteeing free meals for dissatisfied customers.
Customers can ask for a free meal. If they are not satisfied with the food, delivery, friendly service, or an error-free drive-through order.
“We’re in the service business,’ and the guarantee is a natural extension of that heritage — to deliver value and 100 percent customer satisfaction,” ( Ray Kroc ).
The fast food giant does rely on customer satisfaction. The idea of Mcdonalds gurantee is to bring out a secured brand image.
CHANNEL — McDonald’s APP
McDonald’s APP was launched in 2015, to deliver their exclusive offers, and redeem the same at the cashier.
the app also showcases the menu, new products, new restaurants, nutritional info, and even the Happy meal toys of the month.
Billboards are expensive to install. and update regularly, A mobile app is innovative, handy and comparitively cheap.
BRAND — The working demography.
Mcdonald’s do represent a community that is fast and moving. Mcdonald’s serve those who live their life on a quick bite, and a coke.
The idea is concentrating on just a few items — burgers, fries, and beverages — which allowed them to focus on quality and quick service. for the ones who doesn’t like to wait.
CUSTOMER ENGAGEMENT — Hello Kiosks.
Mcdonald’s Kiosks is a digital way to order and pay for your meal. It is somewhat better and faster than a cashier at the front. They are faster, accurate, and easy to customize your meal.
Kiosks do bring out an impressive customer interaction, to the restaurant. They are part of McDonald’s modernization program named NXTGEN.
Kiosks give Mcdonald’s an image that the brand is looking so much forward in future.
To Conclude,
Mcdonald’s as an organization doesn’t grow on a single innovative idea. They cared about being innovative and functional in every bit of the business. Knowing where to innovate and introducing your innovation to the market is the key.
McDonald’s analyzed the patterns of innovation, adapted it, and evolved within the industry. The conscious and considerable choices they made are keeping them in the long run.
#salud
