McDonald's Part 1 Pre-Work - Spring 2024
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BA 100 - Case Analysis McDonald’s: Can a behemoth lead in the era of artificial intelligence. Part 1 Pre-Work
Step 1: The Facts
Summarize the key information from the case and the current situation.
WHO: Briefly describe the leaders in the case. What decision do they need to make? Chris Kempczinski
WHAT
is the decision that needs
to be made? What are the organizational goals McDonald’s is trying to achieve? The decision maker needs to devise a strategy for leveraging Dynamic Yield to enhance the company's business operations. Kempczinski must identify methods to integrate Dynamic Yield into McDonald's franchises, thereby boosting the company's revenue even further.
WHY
is this a decision that needs to be made? How do we know this? What led to the current situation?
Recent renovations, totaling billions of dollars, included the installation of self-ordering kiosks in McDonald’s franchises, leading to owner skepticism and concerns regarding their success. Despite prolonged implementation, these renovations have proven to be a worthwhile investment. McDonald’s is prioritizing consumer responsiveness and consideration, aiming to implement AI technology for feedback collection, product recommendations, one-to-one customer messaging, sales enhancement, and ultimately,
to enhance customer satisfaction and perception of being heard. This initiative stemmed
from McDonald’s acquisition of Dynamic Yield.
WHEN
does the decision need to
be made? Is it urgent? Why?
This business decision doesn't carry an immediate sense of urgency, as the current performance of the businesses is satisfactory. However, expediting the formulation of the secondary phase of the Velocity Growth Plan would be advantageous for the company. It would accelerate sales growth and enhance the overall quality of franchises and the company itself.
Step 2: In-Depth Analysis - Questions related to the case:
1.
Mobile ordering and more personalization are two trends in the fast-food industry. Download the McDonald’s app on your phone and evaluate the app’s features. a.
What features did you find most innovative or valuable?
The feature I found most innovative on the McDonalds app is the rewards and deals section as well as the points earning
tab. These are super valuable because you can earn points to get good deals on food that’s usually quite expensive.
b.
What set-up steps or features (if any) felt invasive to your privacy or caused a negative reaction?
A feature I felt was kind of invasive to the user is in the “more” section. It shows your recent orders, which McDonalds location you recently went to and a log of your favorite past food choices and purchases.
2.
What are specific ways that McDonald’s can use the data from Dynamic Yield to help achieve the objectives of their Velocity Growth Plan (i.e., improve the customer experience by 1) providing delivery and mobile ordering through the McDonald’s mobile app and 2) restructuring all the McDonald’s stores)? They can use data from dynamic yield to focus on enhancing personalization, optimize the menu to the customers demands, strategize store locations based on foot traffic, sales trends, and customer demographics all based off dynamic yield data. Also, McDonalds can use the data from Dynamic Yield to identify opportunities to improve operations across McDonalds stores.
3.
What concerns did McDonalds’ Franchisees have about the Velocity Growth Program. Some concerns McDonalds has with the Velocity Growth Program is customers objecting to McDonalds openly collecting data concerning their spending behaviors, potentially losing sales short term from the complexity of
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