FINAL PROJECT E-Business 20/21

By Cristina Bascuñana León and Aleksandra Prażuch

Contenido
1. Introduction ...................................................................................................................... 2
2. Assessing features of digital commerce ............................................................................. 3
3. Assessing business models ................................................................................................ 3
4. Assessing Revenue Models ................................................................................................ 4
5. Assessing social digital commerce ..................................................................................... 4
6. Assessing new technology adoption .................................................................................. 5
7. Understanding Business Environment ............................................................................... 6
8. Identifying touchpoints ..................................................................................................... 6
9. Scanning/Analyzing the environment ................................................................................ 6
10. Assessing disintermediation and re-intermediation ....................................................... 7
11. Assessing Marketing Alternatives .................................................................................. 8
12. Analyzing digital channel strategies ............................................................................... 8
13. Gaining from platforms ................................................................................................. 8
14. Considering a process for defining a strategy ................................................................. 9
15. Conducting portfolio analysis ...................................................................................... 10
16. Considering a staged model......................................................................................... 10
17. Assessing competitive threats ..................................................................................... 11
18. Defining a vision .......................................................................................................... 11
19. Defining strategic objectives & strategies .................................................................... 11
20. Analyzing and selecting strategies ............................................................................... 12
21. Conclusions ................................................................................................................. 12
 1. Introduction
In this document we are going to be talking about Mcdonalds.
Mcdonalds is an American franchise dedicated to fast food that was founded in 1940
by Richard and Maurice Mcdonalds in San Bernardino, California. 1

Located all around the world, the franchise offers products such as hamburgers,
nuggets, drinks, and desserts, that according to Statista webpage, made the golden M
company had a 21.08 billion dollars as their volume of sales.

Their business model is based in the distribution of their products through the
restaurants where the cost structure consists of the employee salaries, facility
construction costs, raw materials procurement, and marketing costs.

The revenues are generated at the restaurants owned by the company itself and those
owned by its franchise holders.

Figure 1: Mcdonald's Business Model Canvas

Nevertheless, we need to have in mind that there are competitors in this field, for
example, we have KFC, Burger King, Subway, Starbucks, Pizza Hut, Domino’s, etcetera.

Since it is a franchise that operates all around the world there must be some
development challenges like the US changes in dining habits, that Mcdonald’s confront

1
Mcdonalds - Wikipedia The free Encyclopedia: https://en.wikipedia.org/wiki/McDonald%27s

2
Mcdonalds Business Model canvas: https://www.finchandbeak.com/1072/the-mcdonalds-business-model-
canvas.htm
 giving the customer the possibility to customize their hamburgers, or the food safety
concerns in China.

2. Assessing features of digital commerce

We can also talk about the different features of the digital commerce, how they
impact in our companies like:

Omnipresence affects to the profitability of the company, but also on the customers
that every time that they are searching for a fast way solution to their hunger
problems are going to buy McDonald’s.

Global reach impacts on their offered products the most, for example, In Japan, during
the spring they have limited edition products based on the cherry blossom, in Spain,
they offered different ice-creams than, for example, in Poland.

Universal standards will affect the population and also to profitability since if the
company has a webpage that is fully running on internet the population can
investigate their products on the market and be able to know them before ordering.

Richness will be affecting the population and profitability since the company it is going
to advertise their products on different media, so people is going to be able to hear
over and over again about the company, their products and slogans, so the more the
population hear it the more people is going to consume it.

Interactivity affects the population and also the profitability, since people would be
able to rank their products and restaurants through surveys or submitting them
through social media to contact with someone from the company in case of problems.

Density of information this would be probably affect more to the customer’s side
since they are going to be able to decide if they want to buy food from the restaurant
after reading the information or not.

Personalization/Adaptation affects the offered products since through that surveys

and reclamations made on social media the company is going to be able to know about
customer’s liking and be able to adjust to them, just like the cases we said before with
US.

Social technology affects to the customers that with the use of applications on their
mobile phones, that sometimes they receive offers, or with advertisements on tv and
on social media.

3. Assessing business models

When we are referring to which type of electronic commerce McDonald’s conducts,

we are going to think directly in a B2C e-commerce, and due to this we can be able to
know how suitable an internet business model for our company could be, for instance,
portals are being used right now to present the products to the clients, internet shops,
 nowadays, are being successfully used in some countries, a pro of this would be, for
example, if you want to eat their food but don’t want to go outside of your house you
just need your phone and order from it.

But we can also find cons, like not having your own company for delivery, depending
on a third party for this service, during the pandemic this was a huge problem that
actually made this franchise to be closed until the end of the restrictions in my
country.

Content providers are not suitable for our business since it does not provide services
as podcasting or streaming.

Neither would be suitable for the business transaction brokers, market creator or
community suppliers.

4. Assessing Revenue Models

We can also focus on the revenue models such as:

Ad model is one of the most suitable for McDonald’s, with this they can be known all
around the world, they make cross promotions with another important brands and
they are also able to try and generate a better reputation for themselves with it,
making people to want to go back.

Sales model is also suitable since they work selling products to customers.

Subscription model is not suitable since McDonald’s does not sell anything that need
to have a subscription for it to be able to buy or consume their products.

Free model/Freemium is not suitable for McDonald’s since everything that, for
example, they offer on their apps or webpages it is free to use, you only pay to obtain
the food.

Transaction paid model is not suitable since McDonald’s would be, at most, be able to
sell their products online for delivery, but they are not taking fees for the transaction,
that would be PayPal or any other online transaction webpage that it has a contract
with them.

Affiliate model could work with McDonald’s since they work with a lot of different
companies that provide them different goods such as drinks, toppings for desserts, etc.

So, they could be able to link to their sponsored business to their webpage.

5. Assessing social digital commerce

Focusing on the social digital commerce we can also adopt the following ones:
 Newsfeed, that is actually made by McDonald’s on Instagram and on Facebook, in this
one you can find advertisements related to their new products, Social sign-on it is
allowed to sign into McDelivery only through Facebook, Collaborative shopping, it
could be a great idea to be able to have somewhat of a platform that would allow
consumers to give ideas and their experience, for example, Taco Bell does this through
their Instagram account, where people give opinions and their experience.

Right now, McDonald’s does not have anything like that here in my country.

Network notification that consumers can share their approval through the hashtag:
#Imlovinit, this has been McDonald’s slogan since 2003.

Social search this feature would work, but only if you log in with your Facebook
account, since it is the one that has the most accurate information about you, and it
could try to recommend you products, right now, with McDonalds it is a little more
general on that aspect since they usually shares their new products more than the
ones the algorithm can detect that you would prefer.

And if we talk about McDonald’s timeline, we could refer to the next photograph

6. Assessing new technology adoption

Right now companies are trying to adopt new technologies in their business
like, for example, Their self-service or self-ordering kiosks, which are now in many
McDonald's restaurants in some countries. These kiosks proved to work, as they
increased revenues and bottom line results.

McDonald's outlet of Watu Gong, Malang branch needed a web-based geographical

information which can displayed amount of complaint pursuant to complaint category.

The build of a Web-GIS Based Complaint Management of Information System had a

purpose so that McDonald's outlet of Watu Gong, Malang branch could know the
amount of complaint and the time of complaint earlier.

3
Mcdonald’s Timeline
 In the end, the McDonald's outlet of Watu Gong, Malang branch could evaluate along
with improved service quality in order to more adaptable and faster based on
information acquired from Web-GIS Based Complaint Management of Information
System.

We think that with how the situation is right now, McDonald’s would be able to adopt
technologies related to Internet of Things, to eliminate spoilage, improve quality and
increase the profitability and Artificial Intelligence related with ordering at Drive-
throughs in the US, also, being able to release some pressure on workers using it to
take orders.

In business we can find factors that can influence the environment where our company
is ‘situated’.

7. Understanding Business Environment

Thinking about it, we can recognize International factors, Society factors and
Technological factors.

We think that is important to respond and monitor in a digital business context since it
gives us a huge image of our business globally, how things can work in different
regions and how advertisement can be positive for the brand in different markets.

8. Identifying touchpoints

We can also identify some possible touchpoints such as Social media that is up to date
information about McDonald’s can be shared to customers.

Physical store that a customer visits the physical location of McDonald’s. This allows
them to show off its customer experience, products, services, etc.

Website that a customer visits McDonald’s website and it allows the firm to show off
their products in a virtual way.

9. Scanning/Analyzing the environment

When we refer to this point, we can see it reflected on a PESTEL like the one below.
 4

But there are some points that are not discuss in this Analysis, like the weaknesses and
opportunities related to the company industry, that they can be Limited process
flexibility, low production diversification and the vulnerability in the western market
decline as weaknesses and the expansion in developing countries, market
development in the Middle East and product diversification as opportunities.

Neither are represented the weaknesses and opportunities related to the competitors
that are High prices and Low-quality products as weaknesses and Offers to the public
and brand-new products as opportunities.

10. Assessing disintermediation and re-intermediation

If we are talking about dis-intermediation and re-intermediation in our

industry we should be talking about the use of new re-intermediaries for
orders such as uber eats would be a re-intermediation for McDonald’s.

A use of dis-intermediation it would be, for example, erasing another delivery

brand and having their own delivery service.

And the implications for a company that operates in this industry would be
that it is necessary that a company, as a supplier is represented on the sites of
relevant new intermediaries operating within your chosen market sector.

For example, creating partnerships or setting up sponsorships can give us

visibility compared to other competitors.

4
McDonald’s Pestel: https://fourweekmba.com/mcdonalds-pestel-analysis/
 Also, to be monitoring the other competitor’s prices.

We can find some convenient intermediaries for McDonalds such as Coca-Cola,

that provides its retail partners with much more than just soft drinks. It also
pledges powerful marketing support. So, Coca-Cola would be convenient
intermediaries.

11. Assessing Marketing Alternatives

If we start analysing the balance between partnering with portals and

providing equivalent services from our website we are going to be able to find
pros and cons.

For Mcdonald’s it would be kind of beneficial to partner with other portals

such as uber eats, glovo, etc since they are able to provide products and
services to the clients without leaving their houses. But also, in this one you
have to think that you have competitors such as Burger King, KFC, etc that also
uses the same tools as Mcdonalds to be able to provide the service.

Meanwhile, if Mcdonalds would provide that equivalent services from its

website it would not be any competitors since the website it is only promoting
themselves, they are not sharing promotion with another restaurants, we have
to think as a cons that only customers that are pretty sure to consume
Mcdonalds would go directly to the webpage losing potential customers on the
way.

12. Analyzing digital channel strategies

If we are talking about a company such as McDonald’s we mostly know that is

much better to use an Omnichannel strategy, since it would provide a better
user and customer experience.

For example, it could be used Mcdonald’s are on the online presence, for
example, Mcdonald’s app, whatsapp business chat, and offline we could have
call centers and promotional events.

In this case, I will talk about whatsapp business chat, it would be really
interesting to have it, such other companies like KLM, Blackview, etc, so the
customer if it has any problems with their order, food, service or workers they
are able to contact through there, also, they could be able to arrange with the
nearest restaurant in case they want to celebrate a birthday party.

13. Gaining from platforms

 When we are talking about platforms and the ability of McDonalds to develop
a platform, we must say that It would be interesting if they wanted to develop
a platform, for example, they could use Aggregation platforms such as contest
platforms, that are the type of platform where people can post a problem and
you can reward the person that gives the best solution.

In Spain, in this type of franchises it is important for them that you give an
opinion of them, they always give you rewards every time that you do it, in this
way you would be able to change something that you do not like and give the
place ideas that are going to make more enjoyable and comfortable for you to
go back to the restaurant.

But also, it would make people want to collaborate since there is a reward
after it just by giving your solution idea.

14. Considering a process for defining a strategy

I would say that in Mcdonald’s we could be able to use as approaches Third-

party benchmarking service reporting monthly or quarterly on new functionality
introduced by competitors, Subscription to audience panel data reviews
changes in popularity of online services and Ad Hoc customer panel used to
suggest or review new ideas for site features.

➢ Third-party benchmarking service reporting monthly or quarterly on new

functionality introduced by competitors.

This, for example, could be used when our competitors introduce new
products and we want to be their benefits and revenues for that new
products, if it is worth for us to do something similar, or to not try to
implement it due to the failure in our competitors’ companies.

➢ Subscription to audience panel data reviews changes in popularity of online

services.

This, we could use it to know how much traffic our webpage has in
comparison to our more important competitors, so we are able to check how
many people is interested in our products and be able to compare it with
how many people actually ordered something to the restaurant.

➢ Ad Hoc customer panel used to suggest or review new ideas for site
features.

This one could be use if we are in the process of changes in our business,
for example, changing our products or our appearance or if we already
made the changes and want to know the opinion of the customer.
15. Conducting portfolio analysis

High potential (Beware) Strategic (Attack)

➢ Implementing ➢ Online offers will

High screens on tables make customers
so you can call order there
waiters instead to the
competitors
Support (Safe) Key operational (Explore)

➢ HR support ➢ Creating new

Low system products and look
for the
customer’s
reaction to it.

Low High

16. Considering a staged model

We decided that the best staged model that it could be used for us analyzing
McDonald’s was a B2C staged model, that is composed by 4 different levels.

In Level 1 we would be creating a new app that has the characteristic of being
a social media application where people can interact each other about the
products and services given on restaurants.

In Level 2 we would be creating a new type of wallet that every time that you
buy some of their products they give you in-app money to waste on their
products.

In Level 3 we would be creating an ERP software that centralized on that app

all the sales, inventory, purchasing, human resources, finances etc.

In Level 4 we would be transforming the restaurant in an automatized place,

like we explain before with the screens on the tables, also we could have
robots that serve the food and payments in-app to reduce the contact with
people.
17. Assessing competitive threats

I would say that on our case the best model would be the second, since our
company has relationship with customer but also with other companies, so I
think that representation is the best one to approach it.

I would say that we could have threats as for example:

- Cultural threat while operating in different countries, this is I think that was
kind of solved by McDonalds due to that depending on the country or even the
continent that you are they have products that are specially prepared to be
bought by the people that lives there.

For example, different hamburgers, drinks, even desserts.

- Fierce competition with competitors, this could be solved with new

products, lower prices, and strategic offers.

18. Defining a vision

We would say that the vision of McDonald’s for this 5-year gap would be to
create a digital environment worldwide.

19. Defining strategic objectives & strategies

Goals Strategies to achieve goals Specific objectives (KPIs)

Reduce the 1. Having at least one sales Reduce the number of

number of machine in every employees by 30%, which
employees. restaurant. should return the cost of
2. Working on another buying sales machine in 2
automatics’ solution in a years.
production process in
restaurants and fabrics.

Increase the 1. Having as many as Increase the sales by 20% in

profit by 20% possible (and needed) comparison to the past year
sales machines in the by taking the order faster by
restaurant. 40% due to automatization.
 2. Create a sales machine
for the drive-through.

Introduce online 1. Creating an option in a Investment from developing

order in a way to mc application to place application, creating new work
the restaurant order online in a way to place and advertisment should
from the the restaurant. return after 3 years and the
internal 2. Creating a special phone idea should be profitable
platform contact to place order in (around 25% of the overall
a way to the restaurant, profit) after 5 years.

Creating the 1. Creating the special Having bigger profit by

customers’ forum for customer on increasing the number of
forum application and website customer, due to creating the
for customers’ for new community of mcdonalds
sharing their clients, by 15%. The revenue
experienced and stories of the investment should be
from our restaurants. after 1,5 year.
2. Giving customers special
online mc’s money
which can be used only
in the restaurants if they
share they stories with
the community.

20. Analyzing and selecting strategies

I would say that in Mcdonald’s we should implement the market and product
development since this helps us decide on which markets we should target
through digital channels to generate value, supply-chain management
capabilities that helps us review how we should integrate our suppliers, which
type of material and interactions support through online procurement and if
we can participate in digital marketplaces with the intention of reducing costs,
internal knowledge management capabilities where we review the internal
digital business capabilities and particularly how the knowledge and processes
are shared and developed and Organizational resourcing and capabilities that
it is used when our digital business has been reviewed, the decisions need to
be made to see how, in this case, McDonalds, should change to achieve the
priorities set for the digital business.

21. Conclusions
In conclusion, I have to say that after our exhaustive investigation regards this
company we think that it is really plausible that would have a really good
future if they try to turn it in a big digital business, with the use of applications
like they already have in some countries, letting people communicate with
them and between customers through social media, even if they decide to
keep it up with the digitalization in their restaurants.

If all those digital modifications are made (obviously keeping it easy to use,
intuitive and with a good appearance) we are really sure that McDonald’s
would be for many years the first fast-food franchise in the world.