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1. #THREAT OF NEW ENTRANTS FOR MACDONALD FULL#
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McDonald’s is investing to ensure it is one-step ahead of the pace of change to make consumers lives easier and become the fastest fast food chain for the digital age.It gives a brief history and background followed by a strategic analysis of the company. The next quarter will see it growing McDonald’s Tech Labs in order to harness acquisitions and grow R&D.įor the most part, changes to the customer experience will be tangible but incremental, although McDonald’s is testing out even more dramatic steps, like robotic fryers. McDonald’s has promised to continue to invest in digital technology, although it will not necessarily be in acquisitions. In September, McDonald’s launched its Apply Thru initiative in which owners of Amazon Alexa or Google Assistant devices can begin job applications using standard “Alexa” and “OK Google” voice commands. Technology is not just about serving the customer, McDonald’s is also using AI to optimise its recruitment strategy. “And effectively as they start to place their order, the menu boards respond to that ordering process and therefore are more likely to suggest items a customer will want and less likely to show items that customers are less likely to want.”

#THREAT OF NEW ENTRANTS FOR MACDONALD FULL#

Dynamic Yield’s service is now in use in more than 9,500 US drive-thrus, with full roll-out to nearly every US restaurant with an outdoor digital menu board expected by the end of the year.Įasterbrook explained: “The beauty of this is there is nothing the customer has to adjust to, they almost don’t know this experience is happening for them as we’ve got dynamic digital menu boards. To prove this, the business has been rolling the new technology out. How McDonald’s shifted its outdoor strategy to focus on mass personalisation And we’d rather be a little bit ahead of the curve and spend the right amount that we think will drive future growth.” He noted: “Our belief is those who aren’t investing in technology, at some point will be behind and will need to catch up. McDonald’s chief financial officer Kevin Ozan assured those listening that this was all about “setting ourselves up for sustainable long-term growth”. Alexa, would you like fries with that?įast-forward to the brand’s latest quarterly earnings and McDonald’s tech investments dominated analysts question – specifically how can McDonald’s ensure these investments pay off? 3.01% increase expected buoyed by KFC’s investment in plant-based burgers. $1.28 bn expected while same-store sales: up 5% vs. In contrast, Yum Foods earnings were up by $1.31 bn vs. However, global same-store sales were up at 5.9% vs. McDonald’s global revenue was $5.4 bn this quarter compared to the $5.5 billion it expected.

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This, plus consumer trends towards healthier alternatives has meant that, although the giant is doing better than rivals in terms of revenue such as Yum Foods, which owns Taco Bell, Pizza Hut and KFC, it has dipped below analysts expectations. His comments reflect the fact that smaller fast food companies such as Five Guys are growing fast and adapting to changes in the fast food market. On a call to investors in July he admitted: “We were keenly aware that the pace of change inside McDonald’s being eclipsed by the pace of change outside our business.” The truth is that Easterbrook is making up for lost time. We were keenly aware that the pace of change inside McDonald’s was being eclipsed by the pace of change outside our business.

When rooted in this broader picture, it is clear McDonald’s investments fit squarely in each key accelerator. Second is ‘delivery’ and offering it to customers and lastly is ‘experience of the future’, which is about elevating the customer experience in the restaurants through technology.

Each has technology firmly at its centre.įirst is ‘digital’, which is about re-shaping McDonald’s interactions with the customer at every touchpoint. Within these there are three key accelerators McDonald’s looks to in order to drive growth and stick to its three goals. It contains three key pillars: retain – keeping current customers regain – recruiting lost customers and convert – attracting new customers. The turnaround strategy is part of his mission to create a McDonald’s of the future and ensure it doesn’t rest on its arches.

#THREAT OF NEW ENTRANTS FOR MACDONALD SERIES#

The series of acquisitions comes after CEO Steve Easterbrook laid out McDonald’s Velocity Growth Plan in 2017. It is already expanding its team by hiring engineers, data scientists and other tech experts to ensure that McDonald’s doubles down on its tech innovations through continued research and development. Tech Labs promises to be the hub of McDonald’s new tech empire. This purchase was combined with the creation of McD Tech Labs – a Silicon Valley-based tech hub headed up by Apprente’s co-founder Itamar Arel. If this wasn’t enough, in September it bought Apprente to bring voice technology to its drive-thrus.