McDonald’s Innovative Project Failure: Case Study McDonald’s is the world’s largest food chain for supplying burgers and other fast food options, when it comes to quality they definitely don’t hesitate to spend money and come up with new techniques. For the similar purpose, like for the satisfaction of their customers and the increase sales rate they tried to start a new project in year 2001 called as “INNOVATE”. The basic theme was globalization. Bringing different branches on a single platform, connecting all the restaurants and managing it through a single forum. The idea wasn’t a bad one. The project was big enough to cover 120 countries and 30,000 branches using intranet, providing all the necessary information about a particular …show more content…
Risk Management is a factor to be calculated if a project has to start, in case of this “Innovate” they must have had calculated some risk factors but those were far too small after the project went to its initial phase. Factors affecting Innovate 1. Scope Management: The scope of the project was not well defined right from the very beginning. From the first step it was very unusual, like for 120 different countries, having different infrastructure and IT networks, getting a real time data network was clearly not the suitable choice. Plus priorities must have been defined well. So I would say that the first reason is that Scope Management was not proper. 2. Cost and Investment Issues: A total cost of $1billion was defined to be the project cost, but before project even took off it spent like $170 million. Innovate was designed to allow McDonald's management, at some point in the near future, to see just how many billions of burger patties, buns and chicken nuggets were being consumed at any or all stores at any time of the day. For instance, they could see if the restaurant at South Cooper Street in Arlington, Texas, was handling customer orders at its cash registers within the three-minute service goal, and even if drive-through service was faltering as a result. But the troubles were far too many then they expected to be. On one side was this project and on the other side was the decreasing sales with going into loss for
Many types of risk are created – risk to the project, to the organization, to the employees involved and to the individuals supporting the change.
3. What aspects of McDonald’s management ensure that it was able to deliver a consistent
Additionally, it contained no effective way to audit the system to ensure data reliability. This goal being so ambitious, yet most facilities were meeting it and no one questioned it or asked themselves "how is every facility is hitting this goal?" This confirms the lack of an audit system to review the data. Finally, the failure
This paper provides a written analysis of the Innovation at International Foods (IFG) case study. The paper will provide an analysis of the issues that Josh Novak, the new team manager at IFG is facing with the existing staff. Josh has come for Glow-Foods which was a smaller company that has been purchased by IFG. Josh was retained due to the innovative ideas that produced significant growth at Glow-Foods by reaching the younger market. It has now become his job at IFG to do the same. However, as Josh is becoming more acclimated to the way things are done at IFG, he and his team are being bogged down with processes and procedures that are in place. The team does not believe that will be able to do the job they were hired
After the project is finished, the estimates of risk can be reviewed and compared to the events that actually took place. Did events occur that were unforeseen? What cues existed that may have allowed the team to predict these events? Was the project contingency sufficient to cover unforeseen risks? Even if nothing went wrong on this project, it is not proof that risk mitigation was a waste of money, but it is useful to compare the cost of avoiding risk versus the cost of unexpected events to understand how much it cost to avoid risk.
Sales have drop overall quarterly. In the long run implementing an efficient competitive edged will reverse the downward trend, leading the company to long term financial health.
There are three critical elements of disruption (these were first identified in the book, The Innovator’s Dilemma and are illustrated in the chart at right): ● A rate of improvement that customers can fully use or absorb. This is represented by the dotted line. ● A rate of improvement that goes beyond what customers can fully use or absorb. The pace of technological progress almost always outstrips the ability of customers in any given tier of the market to use it, in part because companies keep striving to make better products that they can sell for higher profit margins to their most demanding, high-end customers. This rate of improvement is shown by the two solid lines in the chart. ● A distinction between sustaining and disruptive innovation. A sustaining innovation targets those demanding, high-end customers with better performance than previously available, whether that performance is an incremental improvement or a breakFor Additional Information on how to know whether your idea has disruptive potential, go to: http://my.summary.com
McDonald’s has ‘enhanced the restaurant experience for customers worldwide and grown comparable * sales and customer visits in each in each’ year to 2011 (McDonald’s 2011, p. 10). This framework has also delivered strong results for the company’s shareholders. McDonald’s has exceeded its long-term ‘financial targets of average annual … sales growth of 3 to 5%; average annual operating income growth of 6 to 7%; and annual returns on incremental invested capital in the high teens every year since the Plan to Win was implemented’ (McDonald’s 2011, p. 10). Operating model: Our System partners The 2011 Annual Report goes on to describe the second factor: ‘the collaboration of Our System partners. From our worldclass franchisees, who are dedicated to running great restaurants and
First, I will identify and research with a successful global business strategy and provide basic background information. Of every single built up companies that have figured out how to bear the numerous difficulties time conveys to their way, one emerges: McDonald 's. To start with, with an establishment plan of action that permits its franchisee-individuals, administration and shareholders to share the dangers and prizes from the revelation and misuse of new business opportunities McDonald 's model has turned into the standard for other establishment associations. Second, by adjustment and advancement, thinking of crisp items and administrations to address the needs of a various purchaser market as molded by demographic, monetary and nearby elements around the globe.
Innovation is all about creativity and taking risks so by applying the risk management techniques all the creativity would not be allowed to grow in the innovators minds.
Construct a PESTEL analysis to show the competitive advantages that McDonalds has to stay and continue its operation in Hong Kong.
Lack of project management clarity: the planning activity had lot of material but lacked content, clear action items and lack of consensus on the milestones. The difficulties in the project only increased with time and a more performance driven style would have kept things on track if introduced early on.
Through the new technology that is being implemented through McDonalds corporations, new procedures on using this technology are being planned, organized, and controlled by the McDonalds managers.
Since McDonald’s is the most well know fast food chain in the world with a market cap of 69.35 billion, brand recognition is their biggest strength. The secret of McDonald’s success is its willingness to innovate and maintain consistency in the operation of its many outlets. In recent years McDonald’s has introduced Premium Salads, Snack Wraps, fresh Apple Dippers in the United States, and Corn Cups in China. Also, McDonald 's products are priced so low that economic conditions are almost insignificant.
Specialty Food and Beverage company (SF), which founded in 2004 in Denmark, mainly covers foods and beverage, restaurants and hotel area. Recent years, the company had faced several problems which lead SF to an embarrassing situation. This assignment will introduce SF’s current issues, analyze the decision and then discuss the solution way which chose by SF’s high level management team.