Innovation Management for McDonalds - Case Study Example

Innovation - McDonalds Student name Lecturer’s name Unit name Date Executive Summary The organization that I intend to work on is the McDonalds food chain. The three topics on innovation will include healthy food, the use of 100 per cent compostable packaging containers and getting rid of plastic utensils and use reusable flatware that auger well with the young generation. The Idea for the innovative product is the use of 100 per cent compostable packaging for their food and snacks. More and more people are getting sensitive about their environment. The containers that the food chain uses currently have only a top that is compostable, the bottom however is not. Environmental protection is a sensitive matter and McDonalds should take a keen interest on this. The innovation I intend to come up with involves the production of bags out bio plastic which allows the food stored inside them to remain fresh and at the same time be easily disposable after use. These bio bags can be put inside a compost heap together with other kitchen refuse. It is certainly something that McDonalds customers will like. Table of Contents Executive Summary 2 Introduction ‘Our mission is to be our customers' favorite place and way to eat & drink’ McDonalds is regarded as the largest fast food chain in the world, serving approximately 68 million people in over 119 countries all over the world, with over 36,000 outlets spread across these countries (Corporation Leadership Center, 2012). Most of the restaurants that are operated by the McDonalds offer both the counter service and the drive- through and in some cases the outdoor seating. The drive through, auto-McDonald and Mcdrive as it is commonly known in most cases has stations for placing, making payments and picking for the paid for orders. There are also other ways of delivery being employed by the company and more are expected to be introduced as they continue to do more innovation (Corporation Leadership Center, 2012). In the April of 2008, the chain made an announcement of their intention to try the use of biomass to manage their waste and cut environmental pollution by half. In this way, waste was collected from the various branches of the chain and then used to produce energy. It also announced its intention to expand the initiative to other areas all over the world (Corporation Leadership Center, 2012). McDonalds has over the past been criticized for their environmental record. Most of their packaging tools were being questioned by the environmentalists as having g an effect on consumers as well as the environment. It has attempted to come up with a number of ways to take corrective action to safeguard the environment (Corporation Leadership Center, 2012). This paper aims at looking the innovative ways in which the chain can better their environmental protection initiatives. The three innovations will include healthy food, the use of 100 per cent compostable packaging containers and getting rid of plastic utensils and use reusable flatware that auger well with the young generation (Abbie, Charles & Serdar, 2014). Innovation 1: Healthy food McDonalds has received lots of criticism on the state of health of their food. For instance, Phil Sokolof, a millionaire who suffered a heart attack at the age of 43 took a full page paid advertisement on a newspaper to accuse the chain for cooking food that is a threat to Americans’ health. They have been sued for misrepresentation of facts regarding the food that they offer, example is a case where in 2002, the vegetarian groups made up of Buddhists and the Hindu successfully managed to sue the chain for wrongly representing t heir French fries (Sharma 2014). McDonalds has made some positive strides but that is not enough, what they have done is only to focus on consumer education and not looking at the particulars of their menu. This is because; consumers are getting more sensitive about the food that they are served (Biller, 2014). The food chain should make sure that they food that they produce does not contribute to the already high number of obesity people in America. They should eliminate fatty foods and beef from their menu and also make sure that the ingredients they use are not in any way rich in cholesterol. Most importantly is to make sure that the consumer is given accurate information on the ingredients of any food they buy (Sharma 2014). Innovation 2: 100 per cent compostable packaging container The use of compostable food packaging materials is the latest and the most ideal method of packaging all types of food. As opposed to the traditional methods of food packaging that was disposed through the normal waste management system; the compostable packaging can be used and later disposed of in the compost system like any other organic matter where they will decompose completely. The Idea for the innovative product is the use of 100 per cent compostable packaging for their food and snacks. More and more people are getting sensitive about their environment. The containers that the food chain uses currently have only a top that is compostable, the bottom however is not. Environmental protection is a sensitive matter and McDonalds should take a keen interest on this (Biller, 2014). Source (Biller, 2014) The use of this type of packaging is important because it has positive contribution to environmental protection and at the same time gives an alternative to consumers who want to live an environmentally friendly life. Innovation 3: Getting rid of plastic utensils and use reusable flatware We all know that we have an obligation to reduce, reuse and recycle any plastic related material at all times. The McDonalds group knows this too. This is in spite of the fact that it could be time consuming. Looking at the codes, sorting through the utensils and finding the postage to send the plastic utensils for recycling in the right place can sometimes be a daunting task. McDonalds however, need to go an extra mile to achieve this (). In 2010, an individual average American citizen used over one thousand five hundred pounds of plastic waste and only half of these were recycled. There is however a growing concern about this and McDonalds need to take note. Fig: Recycling Rates of Selected Products, 2015 (Breene, 2013). The best way McDonalds will reduce the amount of plastic utensils in circulation is to stop using them at all. They need to make use of reusable bags when shopping and when packaging for sale. Most of the plastics however are reusable while some are recyclable (Tabasi, et al., 2015). Most of the available recycling programs may not accept Chinese utensils and ceramic plates. A sustainable way to do away with plastic utensils is simply donating to thrift stores, charities and other people in need. Those that can be recycled can be recycled as long as great care is taken not to harm the handlers (Breene, 2013). Idea for innovative product: The use of 100 per cent compostable packaging container The packaging for fast foods is said to take a huge proportion of the landfill space while at the same time having a huge toll on the effort to protect our forests. McDonalds churns out over 2billion burgers a year, each individually packaged in plastic papers which will normally be thrown into a paper bags translating to 75 of them in each second (Pérez Amaro, 2015). Disposed with other plastic waste and our garbage will be hazardous. The worst of it all is that they end up in the rubbish bin after only five minutes of being used. In seeking to reverse the trend, McDonalds need to make use of biodegradable packaging from grass paper, a concept that was developed by Andrew miller, a student at the University of the Arts grad school, which have decrease resistant properties (Brennan, 2016). McDonalds has had to answer so many questions on their environmental records. The company is aware that the public needs them to come up with more environmentally friendly packaging techniques. They have tried to employ campaigns to inform the public of their intention to go green but that is not enough (Brennan, 2016). The innovation will come at a time when environmentalists are questioning the sensitivity of the food chain in the environment. It will boost their corporate image and will spend less money on defending their actions from law suits and instead use the money to finance more research and innovations as well as improving their productivity for purposes of wealth maximization (Brennan, 2016). The designing of the compostable packaging bags Noticing that consumers would normally rip their bags open so as to be comfortable in eating, there is the need to take into consideration the comfort of the consumer and their interaction with the packaged food (Desai, 2014). The design of bag is such that folds in the bag keep the foodstuff inside the packaging separate without any need of having packaging in the interior. The external part of the package is made up recycled pulp paper and grease resistant grass paper lines the inner part of the bag (Breene, 2013). (Breene, 2013) Compostable packaging bags are made out of plant based materials that easily break down in the composing process and are majorly green or pale green. Unlike the plastic bags that do not break down in compost, the biodegradable materials will easily decompose with food remnants if put in a composed pit (Breene, 2013). Source: (Brennan, 2016) User involvement in innovation The key to any successful implementation of any change brought about by innovation is the ability to involve the stakeholders of the project. McDonalds is no stranger to innovations, they have done it since the entered the industry (Pérez Amaro, 2015). What they need to do is to find out whether the innovative strategies they plan to roll out will be received positively by the consumer. The introduction of compostable has to receive the backing of the consumer who is the perceived beneficiary of the innovation (Corporation Leadership Center, 2012). The most important thing for any organization that is conscious of its public reputation and has the mentality of the consumer in mind and must always maintain a constant communication with the consumer (Desai, 2014). For the case of the innovation in McDonalds, the chain must first seek the opinion of the consumer through the floatation of the proposal to the public domain in order to receive their views (Mohezar and Nor, 2014). The controversy on the public opinion however will usually be the consumers’ lack of the technical knowhow that can qualify them to give credible opinions. They can however do so through some other bodies concerned with environmental protection to voice their opinions on the innovation (Drucker, 2014). The chain will conduct surveys both online as well as through the print media to seek the opinion of the consumers on the matter. In a case where the majority shows their support for the innovation, then the chain can proceed with the innovation and if not, they can shelve the innovation depending on whether the pressure on them by the society groups will ease or not. Additionally, it is worth noting that in some cases the idea can be adopted with a few modifications that have been suggested by the customers and the members of the public (Mohezar and Nor, 2014). Fast integration- time, costs, resources The food chain must have an individual in charge of nurturing the innovation. The individual or a group he or she works with will be expected to draw up a structure of how the implementation one complete will be rolled out, keeping in mind the fact that most of the innovations come from the market, more so from the opinions of the consumers (Karamanlioglu and Robson, 2014). A strategy will be developed to have a roadmap that will see the successful development of the plan as well as share with the people how they see the innovations impacting positively on the organization. They will then work on the options on the table. When time comes for implementation and execution of the innovation, the departments concerned will run the project (Karamanlioglu and Robson, 2014). At the initial; stages of the innovation, the projects will be separated in order to receive more attention. The group leading the innovation implementation stage will at this point provide a road map for the future. The table below gives a summary of the projects integration time cost and the resources required running it. Task Period Resources Research and innovation 2 months $8 million dollars Concept Design 1 month $5 million dollars Detail Design 1 month $2 million dollars Prototype 1 month $ 1 million dollars Production and Assembly 2 months $30 million dollars Final Testing 1 month $2 million dollars Consumer education 1 month $2 million dollars A team will be set up to ensure that each and every developmental stage of the project is adequately taken care of in accordance to the specifications of the plan. Each team will have a leader that will regularly report to the project manager (Karamanlioglu and Robson, 2014). Prototyping and Testing Capabilities The need of prototyping is to create a connection between the evaluation of the opportunity and the need to commercialize it. The management of the chain will be expected to set up an innovation council that will oversee the successful roll out of the project. The testing of the innovation will be done in a giant warehouse owned by the chain to specifically test the innovations in the company (Hanratty, et al., 2012). Once the bags have been tested and proven commercially viable, the chain will form a partnership with restaurants in their vicinity to test whether the innovation will have positive results. Approximately one hundred restaurants will be selected and used for fast prototyping of the new packaging bags the food chain plans to implement. This will enable McDonalds to test all the systems and platforms in which the platform will be rolled out (Hanratty, et al., 2012). Cross functional management The setting up of an innovation based on the development of an environmentally friendly packaging will need the corporation of the various departments in McDonalds Company. No one function will claim to have more said than another for the project to be successfully implemented (Graham-Rowe, et al., 2015). The initial stages will require the production department to come up with a design of the project. The design will be taken to the marketing department who will carry out a market survey on the acceptability of the packaging bags (Graham-Rowe, et al., 2015). The finance department will also have to approve the budgetary requirements of the innovation. The transport department will also be called upon to do a bit of transport work. It is a multifunctional task that will require the input of everyone in the company (Donald, 2016). Conclusion Environmental protection is the way to go in the contemporary business environment. It is important that before McDonalds approves any innovation, it has to seek the guidance on the local environmental framework. The food chain’s packaging techniques are long overdue. The changes should be brought in as soon as possible. Environmental protection is the reason why McDonalds have lost so much money through their defenses in the law suits. The best strategy for them would be for them to do away with environmentally unfriendly packaging techniques that would appease their consumers. More innovations will be expected to come in the future to improve the technology from my proposal on the use of biodegradable materials that have often been accused of not being very fast in decomposition, to one where the packaging will decompose as fast as a leave. The emergence of such an innovation will obviously have an effect on the proposed packaging bag technology but obviously a positive effect on the company. Bibliography Abbie, G., Charles, N. & Serdar, D 2014, Open Innovation: New Product Development Essentials from the PDMA, John Wiley & Sons, Boston. Biller, K 2014, First fully compostable and recyclable paper cup, Focus on Powder Coatings, Vol. 2014, Issue. 12, pp. 4–5. doi: 10.1016/s1364-5439(14)70309-0. Breene, S 2013, ‘How to recycle anything (the sustainable way)’. 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