CASE STUDY

QUESTION:

1. Do you think the technologies enabled by McDonald is useful in their business? Why? (4M)

2. State any TWO (2) generic strategies that are applied by McDonald. (4M)

3. Illustrate the primary and support activities of McDonalds using Porter's Value Chain Model.

Mcdonald's Is Getting Even More Serious About Tech: Mcdonald's Aims To Become McData As Digital Strategy Takes Center Stage Companies evolve over the decades - they have to, in order to remain competitive. Often, technology becomes a key differentiator. And a motto for the quick-service restaurants (QSRs), for the marquee names such as Pizza Hut, however, Mcdonald's, the motto may be: Go digital or go home. "It's clear that our next chapter will be driven by our leadership in digital, as we build on our momentum and embed our digital capabilities through the customer experience," said Mcdonald's President and Chief Executive Officer Chris Kempczinski in the release that accompanied the burger giant's earnings results on 28th July, 2021. In the announcement, the firm said that year-to-date systemwide sales from digital channels across Mcdonald's top six markets were nearly $8 billion - a 70 percent increase versus the prior year. In the U.S., comparable sales were up nearly 15 percent on a two-year basis, and were up just under 26 percent from a year ago. The benefits of a robust and newly launched of the MyMcDonald rewards program on 8th July 2021, are underscored by the data. The company will house its digital, data analytics, marketing, restaurant development and operations components as one joint entity. Recent research has shown that loyalty program users spent almost twice as much on takeout monthly as their non-user counterparts, $200 compared to $104. Younger consumers, in particular, are looking at the Mcdonald's app as a principal point of engagement. The loyalty programs, according to commentary on the call, are driving digital adoption, shorter purchase cycles and greater frequency of visits. In this way, high tech and the omnichannel experience lead the way toward earnings growth, and toward a post-pandemic sales and earnings bump On the other hand, Mcdonald's has also acquired Silicon Valley-based company Apprente, which develops voice-enabled technology solutions to allow for faster and more accurate order taking at the restaurant chain's drive-thru locations, while there is future potential to incorporate it into mobile ordering and kiosks. Building technology infrastructure and digital capabilities has enabled rising expectations from the customers, while making it simpler and even more enjoyable for crew members to serve guests. In 2019, Mcdonald's and Al-powered "Personalisation Anywhere" platform Dynamic Yield announced their agreement to make and implement smart Drive Thru menus that customise themselves based on the time of the day, the weather, the current restaurant traffic, and trending menu items as well as individual customers' selections. It has now been deployed in over 8,000 restaurants in the US. The technology integrates all digital customer touch points, like self-order Kiosks and the Mcdonald's mobile app, in addition to the Drive Thru menus earlier in 2019. Customer are seeing a slew of coffee options when ordering in the morning and an assortment Mcflurry offers in the dead of summer. Besides,Mcdonald's invested in Plexure, a mobile app vendor, to advance the development of its own mobile app. In early 2021, Mcdonald's franchisees in three of the nation's largest cities - Chicago, Dallas and Houston - are using ultraviolet light technology to neutralize pathogens on restaurant surfaces and in the air. Franchise owners have partnered with Grand Haven, Michigan-based, UV Angel to take the added health and safety measure, according to Paul Byrne, UV Angel vice president of product. In total, UV Angel has installed 345 units of two varieties in the stores in Texas and Illinois. Under the partnership, the Mcdonald's locations have been equipped with proprietary ultraviolet light surface and air technology, allowing the fast food restaurants to neutralize bacteria, viruses and fungi around the clock. "While we have already taken significant steps to help ensure the safety of our employees and customers, we believe the addition of UV Angel technology is a true game- changer," Matt Kades, a Houston-area Mcdonald's owner-operator, said in the release. "We want the air inside our locations to be as safe as the air outside, and we are proud to be one of the first restaurants in the world to add this technology to our infection control arsenal." The censors are mounted at the ceiling level and continuously draw room air into a sealed chamber, where it is treated with UV-C light to destroy airborne pathogens. This engineering control system operates independent of the HVAC system for automated round-the-clock source-level environmental air treatment, based on systems the company has previously provided in hospitals to control the often deadly hospital-acquired infections. Tom Byrne, UV Angel CEO, said in the release, "While our company started in health care, the COVID-19 pandemic has accelerated the use of our technologies in many different industries looking to create measurably safer indoor environments for staff, customers, and families." The company works closely with Mcdonald's to make the added safety initiatives known to customers through in-store materials, social media advertising and both local and national marketing efforts. Sources: -PYMNT.com, "McDonald's Aims To Become McData As Digital Strategy Takes Center Stage", https://www.pymnts.com/earnings/2021/mcdonalds-digital-strategy-is-paying-dividends/, 28 July 2021; QSRWeb, "McDonald's franchisees install pathogen-control tech", https://www.qsrweb.com/articles/mcdonalds- franchisees-install-pathogen-control-tech/, 15 Jan 2021; Ben Sillitoe, "Mcdonalds Acquires Voice-enabled", https://www.essentialretail.comews/mcdonalds-acquires- voiceenabled/, 11 Sept 2019; Tech News, "McDonalds to Equip Drive Thru Menus with Al", https://www.thestar.com.my/tech/tech- news/2019/03/28/mcdonalds-to-equip-drive-thru-menus-with-al#kjUhm2rSpBFbTCZg.99, Thursday, 28 Mar 2019, 1:30 AM MYT.Value Chain Analysis for Manufacturing Firms Firm Infrastructure (general management, accounting, finance, strategic planning) Human Resource Management (recruiting, training, development) Technology Development (H & D, product and process improvement) Procurement (purchasing of raw materials, machines, supplies Inbound Operations Outbound Marketing Service Logistics Logistics 8: Sales (raw materials (machining, (warehousin (advertising, (installat- handling and assembling, g and promoting, ion, repair Support Activities warehousing) testing distribution pricing, parts) products) of finished channel . roducts relations Primary Activities