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Managing Innovation Performance and Capabilities- McDonald's


  • Unit No: 8
  • Level: Undergraduate/College
  • Pages: 9 / Words 2341
  • Paper Type: Assignment
  • Course Code: BM627
  • Downloads: 662
Organization Selected : McDonald's


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 organization 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 organization to manage innovation


Company overview

Donald restaurants are being opened in 120 countries and territories. Donald is headquartered at Oak brook Illinois. Donald provide both counter service and drive-through service. It has many separate stations for placing, paying and picking up orders. Donald provides quality burgers, sandwiches, wraps, cold drink, French fries etc. It also contains play grounds which are known as Donald play place.

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 Donald. Television has played a huge role in advertising products of Donald. Donald have use every aspect of selling innovative products to consumer which has lead to large business growth (Cox Pahnke and et.al., 2015). Donald innovation includes various items like happy meal, flurry, big , egg muffin etc. These innovations has helped them to make greater profit.

Innovation audit

Donald use innovative audit to know about how effective people are in managing innovation. 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.

By innovation audit 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.

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 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.


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 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 , 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 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 . 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.


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 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 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.

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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.


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.


  • 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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