Big Data Analytics in McDonald’s Strategy

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Table of Contents

McDonald’s Mission and Responsibilities
Limitation in Gaining Data for McDonald’s Decision-Making
McDonald’s Trend Analytics
Importance of Information Technologies in Strategic Planning
References

McDonald’s Mission and Responsibilities

McDonald’s is one of the most popular fast-food restaurant chains worldwide. The brand has won the love and loyalty of its customers and has united many of its employees, which is impossible without a clearly formulated mission. According to the company’s website, its mission is “to make delicious feel-good moments easy for everyone” (“Our mission and values,” n.d., para. 1).

By this statement, the organization means providing its customers with delicious food quickly, in a convenient location, and at an affordable price. McDonald’s also strives to unite and develop society and improve the visitors’ mood through its service. The activity is based on the company’s values:

Serve – focus on customers;
Inclusion – everyone can be McDonald’s client;
Integrity – company strives to do the right thing;
Family – organization wants to unite families providing happy moments;
Community – McDonald’s is a good neighbor that support society (“Our mission and values,” n.d.).

Companies’ missions evolve and change according to market trends and customer needs. McDonald’s started as a product-driven enterprise, which focused on the speed of service and taste of food, and the menu was limited by a small number of offers. Although the company was able to enter the market and attract attention, this format of work did not provide the growth necessary for prosperity. For this reason, McDonald’s began to collect and use data about customers and, thanks to it, became a global network.

This change affected the mission of the organization and its activity. The primary responsibility has evolved to respond to visitors’ demands and offer what they need – food, service, and convenience. Obligations before its customers create other responsibilities and duties for McDonald’s. For example, the company recognizes its responsibility to find quality and eco-friendly suppliers for both products and packages. A number of obligations also included taking care of animals, reducing waste, and taking care of nature as a whole. Thus, at the moment, McDonald’s is focused on its clients.

Limitation in Gaining Data for McDonald’s Decision-Making

Every company must develop strategies based on relevant data for their area. Analysis helps organizations get ahead of competitors, improve performance, and gain other benefits. For instance, companies may use such an approach as decision analysis (DA), which is an investigation of all available data that may influence the decision-making and taking actions to achieve the best outcome (“Decision analysis,” n.d.).

For the restaurant business, information is critical, and in the future, companies that cannot use it in their favor will be at a disadvantage. It is essential to consider that with the development of technologies, the amount of data, the availability of information, and customer requirements for services increase (Bolden et al., 2018). Paradoxically, the larger amount of data for analysis can also be a limitation, as it is challenging to analyze.

To develop the company, McDonald’s leadership makes essential decisions on the strategy. It is crucial for decision-making to understand customers’ needs, how profitable a specific department, its employees, whether its location and other parameters are successful. McDonald’s previously used average-based metrics to access its own activity, but the company faced certain limitations. Such a system created difficulties in comparing stores and regions since the metrics could be the same in developing and declining stores.

Moreover, this method had limited ability to combine data from different sources. Average-based metrics also could not present the data in a convenient form, that is, visualize them. As a result, the analysis did not provide information about the correlation between various factors and cause-and-effect relationships. An alternative approach was trend analytics, which helped to get away from the existing restrictions.

McDonald’s Trend Analytics

The choice of tools for analyzing data about the company’s activities and the customers’ needs is critical because it can affect the success of the analysis. As previously noted, McDonald’s has moved to trend analytics, which contributes to understanding the situation in various restaurants of the chain and to optimizing processes. For this approach, specialists use information over a certain period in the past to predict trends in the future.

This tool helps to collect various data from multiple databases, and in this way, all the important and influential information is included in the analysis. Another advantage of the method is the visualization of the obtained data, which contributes to identifying causal relationships for different phenomena. Such trend tracking improves the efficiency of the company and helps prepare for periods of demand, such as hot drinks in winter, cold and light snacks in summer. The trend analytics helped McDonald’s solve the problems of sale, supply, speed of work, production, and other matters.

As a result of decisions applied to company restaurants worldwide to improve the quality of work and standardize experience. However, it is worth noting that although establishments look very similar, they can differ, as an organization also takes into account local trends, features, and preferences. An example of a practical solution to the problem after analysis is an improvement of the drive-thru system. The problem for customers on cars was that the waiting time is too long for fast food – three minutes. The changes included improving the quality of speakers for communication with the operator, the menu board reduction and optimizing its design, and creating additional service lines. Thus, the company coped with the adverse experience of its clients and proved its loyalty to customers.

Importance of Information Technologies in Strategic Planning

Strategic planning is an integral part of any business necessary to determine the direction for development and the goals that the company seeks to achieve. The plan includes the mission, values, the vision of the organization. The strategic plan provides guidance to staff on how to act and respond to specific situations. The planning process involves a comprehensive analysis of the data and making decisions based on it about what tasks the company sets itself and when it wants to solve them (Vo, 2020). This process contributes to improving productivity, identifying weaknesses, increasing motivation, and other benefits.

As data becomes more critical, information technology (IT) is crucial in business development and strategic planning. According to Linton (n.d.), companies need to align an IT strategy and a business strategy to maximize the benefits of technology. IT significantly speeds up the procedure of analyzing the data required to draw up a strategic plan or adjust it.

Thanks to rapid analysis, companies quickly respond to market trends and change their strategy to address customer needs. Moreover, IT provides the opportunity to adapt the current business model to a more profitable one based on the data obtained. The benefits that IT provides for strategic planning make them indispensable for modern companies.

The McDonald’s restaurant chain also actively uses technology for its own development. Starting as a product-driven business, the company has changed its business model to a customer-oriented one, and therefore, it needs to collect and analyze a large amount of data about the needs of its visitors. Previously, an example of improving their drive-thru system was mentioned – a decision made based on data analysis. Recently, the company decided to introduce technologies more actively and to use artificial intelligence (AI).

In particular, AI will be able to change the menu of the restaurants depending on the time of day, weather, or even offer a personalized order (“You want AIs,” 2019). Such a measure is another step to a more individualized approach to customer service.

References

Animal health & welfare.(n.d.). McDonald’s. Web.

Bolden, D., Martin, M., Luther, A., & Hadlock, P. (2018). Feeding the algorithm: How restaurants use data to capture competitive advantage. Boston Consulting Group. Web.

Climate action. (n.d.). McDonald’s. Web.

Craig, W. (2018). The importance of having a mission-driven company.Forbes. Web.

Decision analysis (DA). (n.d.). Corporate Finance Institute. Web.

Jeble, S., Kumari, S., & Patil, Y. (2017). Role of big data in decision making.Operations and Supply Chain Management: An International Journal, 11(1), 36-44. Web.

Linton, I. (n.d.). Strategic uses of IT in business. Chron. Web.

Our history. (n.d.). McDonald’s. Web.

Our mission and values. (n.d.). McDonald’s. Web.

Packaging & waste. (n.d.). McDonald’s. Web.

Responsible sourcing.(n.d.). McDonald’s. Web.

Trefis Team (2017). Why McDonald’s is looking to track customer data.Forbes. Web.

Vo, E. (2020). What is strategic planning? The Hartford. Web.

You want AIs with that? McDonald’s buys into machine learning. (2019). BBC News. Web.

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