Digital Transformation In McDonald’s: Trends And Analysis

Introduction to McDonald’s

Outline the key strategic priorities:

McDonald’s Corporation, also known as McDonald’s, is one of the largest global fast-food chains founded in America in 1940, known for the best hamburgers or Big Macs and other mouth-watering delicacies like French fries and cheeseburgers soft drinks and desserts. Mcdonald’s has always been focused on innovations. The company has been focused on making new products and facilitating operational efficiency, embracing advanced analysis, artificial intelligence and digital transformation. The key priorities of the McDonalds for digital transformation are:

• McDonald’s has made its largest acquisition by acquiring a personalized tech start-up called the Dynamic Yield (Ramos, 2020).
• McDonald’s has also acquired a conversational AI application called the “Apprente,” used for multi-lingual, complex, multi-item and multi-accent conversational ordering (Thompson, Bonnet & Ye, 2020).

The external trends and changes that impacted McDonald’s can be divided into political, economic, social, technological, legal, and environmental analyses. The PESTLE analysis is done reviewing the current literatures in the form of company reports, policy documentations, white papers and journals. The papers are collected from the internet and the google scholar to determine appropriate knowledge on the current trends in the food retail chains.

• Primary Data collection:

Research conducted on the McDonald’s focuses on identifying the key digital transformations. The methodology for this study is the primary qualitative approach. Primary research is the methodology that directly translates to the data collection process. Here, the research requires the collection of the relevant samples of data by directly depending on existing data with relation to research contexts. Qualitative research handles the collection and analysis of non-numerical data for understanding complex concepts to generate ideas. The method for qualitative research is conducted using an interview with open-ended questions and a survey with five employees of the Mcdonalds (Roulston & Choi, 2018).. The interview aims to understand the perception of the participants. The open-ended interviews encourage the participants to actively listen and talk freely, gathering information that cannot be updated in any other way. The survey to be utilized in the research would be done on the sample size of five staff of the McDonalds store with collection of information from a pool of participants asking multiple questions. The interview helps in sharing the experiences of the candidates along with developing their personalities and knowledge.  

• Types of data collection

The data collection methodology used in this paper is a mixed methodology consisting of Primary qualitative and secondary thematic approaches. The procedure helps in mixing the research methodologies to understand the research topic. The primary qualitative approach helps directly collect non-numerical data to understand the research topic by conducting interview and a survey (Nassaji, 2020). The secondary thematic approach helps in using the primary data collected to further analyze the research topic.

• Types of individuals

The types of personnel on whom the research would be conducted are the managers of McDonald’s specifically the Chief Marketing and Digital Customer Experience Officer and the Chief Operations Officer in U.S.A. The McDonald’s CEOs are focused on technological advancement and transformation in recent days. Thus, the data for understanding the recent technological development areas will be collected and analyzed by the participating managers in the research. The managers help in motivating the employees to oversee the operations. The analysis is done from the data collected from the managers of McDonald’s.

External Trends and PESTLE Analysis

Digital transformation in McDonald’s is the foundation of best practices and efforts to improve customer experiences as their top priorities. Digital transformation occurs from integrating and implementing technology strategies to developing business areas. Based on the number of digitally facilitated and upgraded stores, McDonald’s allows transformation rapidly and sees significant returns from deploying digital solutions. Digital transformation and innovation directly reflect the growth strategies successfully leveraging their competitive advantages. The digital transformation helps in facilitating increased value, ensuring continued loyalty to their current customer tactically investing in the core “three D’s”: Drive-thru, Digital and Delivery (Hussain and Dawoud 2021).

Digital framework:

The digital transformation in Mcdonald’s growing competitive market emphasizes developing customer satisfaction. With its strategies to improve its business digitally, Mcdonald’s has made its biggest acquisition in the last 20 years, getting hold of a new personalization start-up technology company Dynamic Yield. The company has started specializing in drive-thru satisfaction. The dynamic yield technology creates drive-thru menus with additional items and trending services. The company is currently testing dynamic yield in several US and international markets (Taulli & Oni, 2019). The technology can be integrated into other digital solutions like self-servicing kiosks and mobile applications.

Technology is the foundation and critical factor of the growth plan of Mcdonald’s, enhancing “Customer Value” applied as the framework. The Customer Value frameworks is needed to be applied in the organization for helping the organization to manage so that customers would perceive the values from the product attributes, the related consequences of using digitally transformed solutions, and achieving their shared goals. The Customer Value proposition should be convincing, with McDonald’s identifying the measures to digitally enhance the customer experiences and describe the customer’s perception of values. The Customer value proposition can be utilized by proper assessment of the current offering of the markets, identifying the needs of the customers, developing the digital transformation meeting the need. The identified points are described according to pre-emptive value sharing.

Digital Innovation:

The survey is conducted gathering the responses from the five employees working on  McDonald, with 60% of the responses agreeing that the “Dynamic Yield” is a the most viable option. The customers would benefit from the AI-powered technology personalizing McDonald’s drive-thru machines and kiosks in real-time, based on their factors, experience, weather, and time (McDonald’s, 2019). The primary qualitative research done on the managers describes that the acquisition has capabilities to expand its abilities to increase its digital technologies and data for the future and create the latest solutions personalizing their customer’s experiences. The customer needs to create solutions focusing on customer engagement reaching new audiences, and driving increased sales using technology. The McDonald’s digital transformation with dynamic yields developing business responsibilities by improving digital ordering, payments, personalization, delivery, and loyalty in their global retail. The digital drive-thrus integrate decision-making technologies to improve customer values. The primary research describes that Dynamic Yield offers businesses dedicated management for optimizing the digital solutions implementing immersive workshops launching campaigns for development by tapping into customer value faster.

McDonald’s is acquiring the digital start-up to provide new digitally customized content and tailored menus to speed its digital transformation. Dynamic yield combines data management with analytics to enhance personalization and improve a fragment of its customer base, using decision-making engines to deploy machine learning and algorithms to create customer segments (Dynamic Yield, 2019). The personalization strategies for growth success reflect McDonald’s advertisement and marketing strategies. McDonald’s uses its AI-powered technologies to drive leadership, build momentum, and implement customer experiences. McDonald’s has realized that it can deliver better products, values, tests, and convenience for its customers. The guiding principles behind digital transformation are experiences for the future, delivery and digital technologies enhancing strategies for facilitating better hospitality, personalization and convenience. The relationship among the customers is enhanced and strengthened significantly. McDonald’s vision to personalized digitally enhanced customer experience by their improved drive, giving significant advantage by increasing focus business values and supporting the strategies and vision. The digital transformation with dynamic yield aims to support all the targeted touchpoints of the consumers. Automation is the leading foundation used for digital transformation for improving the supply chain of McDonald’s by better management of inventories and never running out of key products while needed for delivering. The dynamic yield has been developing values in self-servicing kiosks, acting as a two-way medium for personalizing delivery and advertisement with enhanced product personalization for the customers.

Trends Analysis

[Figure 1: Personalization Capabilities of McDonald’s, Source: McDonald’s, 2019]

Digital Framework:

Mcdonald’s has realized, studying their market, that voice is the leading mode of food ordering; thus, implementation of AI becomes necessary. The primary research shows how internal and external communication would play a founding role in the Disruptive Digital transformation strategies as the framework for the development. The digital disruption strategies allows to explain the changes that might occur through the introduction of newest digital trends, capabilities and services or changing the existing infrastructure to disrupt the business to adjust to the current positionality. Digital disruption directly reflects on the McDonald’s customer satisfaction helping the company to grow exponentially.

Digital Innovation:

Digital transformation is done by implementing tech acquisitions to re-invent fast-food experiences. McDonald’s has recently brought “Apprente,” a start-up developing conversational AI agents that automates voice-based ordering personalizing drive-thru in multiple regional languages. These drive-thrus are good fits for the business of McDonald’s, offering simpler, accurate and faster order taking. The “Apprente” technologies would be applied in kiosk ordering and mobile apps. The conversational AI is meant to lower the waiting times and allow retailers to operate, including smaller staff. The survey conducted on gathering the viable responses from the five employees working on  McDonald, with 60% of the responses agreeing that the “Apprente” is a the most viable option.

Apprente is aimed to form the McD tech labs that focus on improving the global technologies of McDonald’s, taking the culture of innovation as the first step (Fraser et al., 2021). The Apprente is designed to understand and converse with consumers for ordering food and items. McDonald’s acquired Apprente to integrate conversation voice technologies into the drive-thru, encouraging their rivals (Barrett, 2019). The primary research helps build the foundation for the need of Apprente used as the strategic tool of concept that allows developing strategic executions for supporting more active digital domain helping to reduce threats to opportunities leveraging digital opportunities for creating competitive advantages and enhancing operational performances. The Apprente would transform the value chains, patterns of trends and demands and create competitive pressure that positively impacts McDonald’s (McDonald’s, 2018). The primary research provides information that the Apprente allows to align the key communication activities among the organization with the value propositions and strategic balance abilities for longer-term sustainability building on key resources. Apprente helps Mcdonald’s understand the importance of automated conversations and how it reflects on value creation. Data is collected on how organizations implement Chatbots and AI-powered voice assistants to improve the supply chain and develop communication. The meetings were conducted among the managers of McDonald’s to understand current leadership strategies and develop deep passion and expertise for digital technologies to guide the organization towards its growth plan. Chatbots are the foundation of digital transformations for internal communications finding ways for amplifying information collection, dissemination and gathering. McDonald’s wants to use Apprente for conversing in multiple languages, develop a ready source for data, and increase the operational efficiency of food ordering.

The conversational AI helps build Agile architectures exploring the future realities according to growth strategies. The latest disruption with Apprente was necessary as the customers’ expectations have increased significantly with large datasets and complex information available to the customers in this digital society. The Apprente adheres to the digital transformational strategies realigns with the entire business planning model focusing on customer experiences. The application creates outcome-driven and high-valued technological initiatives. Apprente helps in developing complex voice-based multi-lingual multi-item and multi-accent conversational ordering. The application would expect to allow simpler solutions to order from drive-thru with incorporating it into mobile ordering applications and self-servicing kiosks.          

Digital Framework

The company has been focused on innovating competitive advantage for creating a faster, better and easier solution focusing and investing heavily on the three D’s of Delivery, drive-thru and digital. The company is innovating new sustainable and demandable products to a newer audience, like their introduction of McPlant, a plant-based burger popular among vegan customers (Utama et al., 2020). The drive-thrus are personalized by implementing ordering and ID technologies that identify current customers at the drive-thru screens and simplify the ordering and paying system. The company is creating parking spaces for express pickup and drive-thru experiences. The organization has also introduced a loyalty intervention called MyMcdonald’s, which provides personalization and increases customer value by making selective recommendations and rewards based on their previous orders.

Digital transformation in Mcdonald’s has been the key priority for preparing for workplace transformation and cultural transformation. With the latest technological advantages, the company tends to focus on the right practices focusing on digital, drive-thru and delivery, developing core menus with innovative items and marketing. The primary research done clearly shows the benefit of personalization of Drive-thrus by the implementation of contactless delivery and personalized menus, customer engagement and satisfaction improving their contactless channels. The company also needs conversational voice assistants in self-servicing kiosks to improve multi-lingual automated conversation, reducing the workforce needed. The company focuses on cross-functional collaboration and acquisitions to build a competitive advantage.  

Conclusion: 

McDonald’s is one of the largest global fast-food retailer companies globally. The organization continues its growth success strategy by implementing digital transformation that personalizes Dynamic Yield technology in the self-servicing kiosks and conversational bot called the “Apprente.” The dynamic yield helps with facilitating customer experience optimization, creating shared value. The Apprente helps with automating food-ordering conversation by implementing personalization. The paper guides through these digital transformations to draw recommendations for the development of McDonald’s in this competitive digital market.    

References:

Barrett, B. (2019). Mcdonald’s acquires apprente to double down on tech. Wired. https://www.wired.com/story/mcdonalds-acquires-apprente-voice-ai/ 

Dynamic Yield. (2019, March 25). Dynamic yield joins the mcdonald’s family. Dynamic Yield. https://www.dynamicyield.com/blog/dynamic-yield-joins-mcdonalds/ 

Fraser, A. (2021). ‘You can’t eat data’?: Moving beyond the misconfigured innovations of smart farming. Journal of Rural Studies. https://doi.org/10.1016/j.jrurstud.2021.06.010 

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McDonald’s. (2018). McDonald’s to acquire dynamic yield, will use Decision Technology to Increase Personalisation and Improve Customer Experience. Retrieved March 23, 2022, from https://corporate.mcdonalds.com/corpmcd/en-us/our-stories/article/ourstories.dynamic_yield_1164112100.html  

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