McDonald’s Strategic Plan, Digitalization

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Executive Summary

The world’s leading fast-food restaurant chain, McDonald’s, aims to retain and expand its customer base through digitalization. In order to achieve this result, the company is to develop both on-site and remote formats of consumer interaction. The installment of order kiosks and delivery systems will require the supplies of the necessary hardware and software. In addition, the personnel are to be trained digital literacy and corresponding competencies to use new solutions effectively. Finally, the benefits of the new framework are to be communicated to the stakeholders.

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Introduction, Company Background

McDonald’s is a fast-food restaurant chain with a name that is famous across the globe. The company originates from 1954 when its first restaurant appeared in the United States of America. Over the subsequent decades, McDonald’s fame and network grew rapidly, providing the company with a resounding international success. Currently, the company owns 36,000 locations in over 100 countries, which makes it one of the leading food and restaurant brands worldwide (McDonald’s, 2021). Throughout its existence, McDonald’s has remained loyal to its original vision and values. It provides millions of consumers with affordable and quality food while promoting local suppliers at each location and developing new recipes. The brand’s name and reputation are maintained by 210,000 direct employees and 1.9 million franchised workers. Thus, McDonald’s is a company with a long history and a strong vision that has a name in the global market.

Company Stakeholders

As far the key stakeholders are concerned, McDonald’s is a highly consumer-oriented company. The special role of customers in its operations is easily explained by the nature of the business that depends entirely on the public’s willingness to choose this brand for fast-food services. In addition, the normal functioning of each restaurant is unattainable without reliable suppliers, making them another entry on the list of the key stakeholders. Next, the role of employees, from management to front-line workers, is equally crucial in the restaurant industry. In terms of its global development, McDonalds utilizes a franchise network, as well. Finally, the diversity of the company’s locations makes it dependent on local regulators and authorities. Overall, the list of the key stakeholders for McDonalds is as follows:

  • Consumers
  • Suppliers
  • Employees
  • Franchise holders
  • Local authorities and regulators

Operational Goals and Expected Outcomes

McDonald’s relies on a specific strategic plan that outlines its operational goals and expected outcomes. Its current business philosophy is to retain existing customers, regain lost consumers, and convert casual visitors into loyal clients (McDonald’s, 2018). These are the key operational goals that focus on the continuous expansion of the customer base with regular visitors at its core complemented by new and returning consumers. The company plans to achieve them the nexus of experience and technology, introducing new digital methods of interaction with the key stakeholders, both on-site and through delivery. As such, McDonald’s expects this process to translate into the sustained revenue growth and better shareholder returns that will solidify the company’s position on the global market. In order to achieve these goals, the company will need to engage in a series of internal and external procedures that will help

Action Plan

Department Activity Tasks Person responsible Due Date
HR Staff digital literacy promotion Organize training courses for all workers to become familiar with the digital workspace Head of each local training center / HR department 2021/Q4
PR Community engagement Organize community outreach programs to raise and maintain local public’s awareness of the brand Head of PR at each location 2022/Q1
MARKETING Effective promotion campaign Evaluate the key values of the audience and find an effective means of new features’ presentation to the public Head of Marketing 2022/Q1
SUPPLIES Provision of equipment Select and purchase suitable kiosks, computers, and other equipment Head of Supplies 2022/Q1
IT Development of software Prepare the required applications and programs that can maintain the functioning of the new framework Head of IT 2022/Q1

Key Performance Indicators (KPIs)

KPA’s KPI’s
Staff Competency Digital literacy test results
Customer Service Customer satisfaction as per customer surveys
The number of new customers per month
The number of returning customers per month
Customer base growth per month
Digitalization of business The number of installed applications per month
The number of online deliveries per month
Financial performance Global comparable sales per year
Diluted earnings per share per year
Total shareholder return per year

Human Resource Requirement

The department of Human Resources will play a role of paramount importance in the envisaged process. First of all, reaching these goals is demanding in terms of the workers’ digital and communication competencies. Thus, it falls upon the HR department to organize the required training sessions that will help employees master the technology to be implemented by McDonald’s. Second, retaining existing customers while gaining new ones is possible through the better customer experience. Thus, the company’s HR units are to ensure that both external and internal communications are executed positively, contributing to the overall success of the operations.

Physical and Other Resource Requirement

Digitalization of the customer experience will require physical resources, as well. First of all, McDonald’s plans to continue the installment of order kiosks at its locations, making it necessary to maintain the purchases of this equipment. However, further digitalization of the customer interaction process will also require additional computers in McDonald’s restaurants. Furthermore, the aforementioned equipment needs to be reliable and capable of processing large array of data to avoid any technical difficulties that may affect consumers’ experience with the company’s electronic services. Finally, another key resource consist of the necessary software development, such as delivery applications and programs to operate the electronic framework.

Resource Conservation/Water Management Tactics

The proposed paradigm will help McDonald’s reduce its environmental impact, as well. While more customers can be encompassed with innovative digital solutions, it is possible that fewer people will be physically present at the restaurants. Thus, the load on McDonald’s water supply system will be lower, reducing its consumption. On the other hand, the impact of the solution on the use of electricity with more digital equipment being operated remains uncertain and requires further investigation. In this regard, McDonald’s emphasis on sustainability can be maintained and enhanced further through the use of recycled materials in packaging and reliance on the renewable energy.

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Budget/Cost Expectations

Evidently, the implementation of a large-scale digitalization process will affect the cost aspect of McDonald’s operations. It is estimated that the budget load will see a significant increase in the first months after the implementation of the plan. More specifically, purchasing the equipment, developing the software, and organizing extensive training sessions are projected to become costly endeavors for McDonald’s. Nevertheless, the situation is estimated to improve after a transition period of four to six months, as existing and potential customer become engaged with the new opportunities.

Key Responsibilities and Intellectual Property

The exact nature of the intellectual property responsibilities depends on the type of software and hardware McDonald’s will choose for the plan. It appears less costly to select the already existing solutions and adapt them to the company’s operational environment. This way, the expenses will be optimized, but a necessity to obtain legal rights for its use will arise. Developing brand new ideas will allow the company to avoid such issues, but the expenses will increase accordingly. The general format of digital kiosks has already been implemented by McDonald’s at some locations, meaning that the legal aspect has also been regulated.

Communication Plan

An effective communication plan is indispensable for this plan, as all key departments and workers should align in terms of the objectives. The top management of the company’s headquarters will explain the principles and goals of the plan in memos to regional managers and franchise holders. The latter will then process this information and adapt its points to each specific location, delegating the execution of the plan to the responsible units. HR, IT, and Supplies will work in close coordination to ensure that the plan’s particularities remain feasible from all perspectives during the preparation stage. Simultaneously, PR and Marketing will develop an effective strategy that will communicate the benefits of the new solutions to consumers.

Monitoring and Evaluation

The monitoring and evaluation of the plan’s execution will be executed at several levels, including regional management and headquarters. This process can be completed through the examination of the key performance indicators mentioned above. It is vital to evaluate the impact of the new plan on consumer engagement and expansion of the customer base. At the same time, financial performance in the short term can receive less attention, as it is bound to suffer from a costly endeavor. However, McDonald’s financial situation is already stable enough to allow for certain short-term losses for better returns in the near future.

Contingency Plan

Event Risk Ranking Probability of Occurrence Solution Person in charge Due Date
Failure to retain, regain, and convert customers High Moderate Halt the implementation of the digital plan and return to the previous mode of operation CEO Q2/2022
Failure to train workers to work with digital solutions High Low Organize additional training for current workers, seek new candidates with the required competencies Head of HR Q1/2022
Unavailability/insufficiency of hardware supplies High Low Seek alternative suppliers to meet the company’s demand / develop a way of integrating heterogeneous hardware into a single operational framework Head of Supplies / Head of IT Q1/2022

Conclusion

Overall, the implementation of a digitalized consumer interaction framework will help McDonald’s increase its efficiency. This plan aligns with the company’s key Retain-Regain-Convert strategy that emphasizes the importance of a loyal customer base for its growth. While the plan is likely to benefit McDonald’s, it will be demanding in terms of cooperation between various departments and locations. Thus, it will become the ultimate test of the organizational integrity, highlighting the success it can help to achieve.

Reference List

McDonald’s. (2018) 2018 notice of annual shareholders’ meeting and proxy statement

McDonald’s. (2021) About us

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BusinessEssay. (2022, September 19). McDonald’s Strategic Plan, Digitalization. Retrieved from https://business-essay.com/mcdonalds-strategic-plan-digitalization/

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"McDonald’s Strategic Plan, Digitalization." BusinessEssay, 19 Sept. 2022, business-essay.com/mcdonalds-strategic-plan-digitalization/.

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BusinessEssay. (2022) 'McDonald’s Strategic Plan, Digitalization'. 19 September.

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BusinessEssay. 2022. "McDonald’s Strategic Plan, Digitalization." September 19, 2022. https://business-essay.com/mcdonalds-strategic-plan-digitalization/.

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BusinessEssay. "McDonald’s Strategic Plan, Digitalization." September 19, 2022. https://business-essay.com/mcdonalds-strategic-plan-digitalization/.