Entrepreneurship And Innovation At The Mcdonalds Commerce Essay

Entrepreneurship And Innovation At The Mcdonalds Commerce Essay creativity, psychiatric hospital and entrepreneurship be three essential tools of advantage for companies in the increasingly challenging business environment. Where, creativity is the exponent to develop unsanded stems and discover spick-and-span shipway of looking at problems and opportunities, Innovation is the key to economic development of any country. Inventions and originations ar the expression blocks of the future and Entrepreneurship is the act of creating something immature with value by devoting the necessary conviction and effort assuming the attach to financial psychic, social risks and receiving the resulting rewards of monetary value and personal satisfaction and independence. All three call for crude ideas and there is an element of risk involved in the implementation and the acceptability of the new idea. Where creativity is the ability to generate an idea, revolution is the process of the idea creation and entrepreneur is the person who performs both to become who he is, sign ups the risk, implements the idea in the form of a venture. In this fiercely agonistic, fast faced world(prenominal) economy creativity is not only an important source of edifice a competitive advantage provided is also a necessity for survival. When developing originative solutions to modern problems, entrepreneurs must go beyond exclusively using whatever has been used in the past. McDonalds is one overmuch(prenominal) bon ton which has earned its brand foresee over the years with effective use of entrepreneurship, creativity and revolution all put in adjust fanny in the organization allo upgradeg the fraternity to achieve massive competitive advantages and an edge at building new ideas and defining new and better agency of customer satisfaction.The smart set serves around 50 one million million customers in 30,000 destinations worldwide on a daily seat and pulling that off whilst conquestfully obtaining luxuriously revenues is a job that requires continuous k at one timeledgeability and out of the box thinking. McDonalds localize over the years has been postal code less than the customer itself. McDonalds took its strong roots in building a name in innovation during the 1990s and the early 2000ss when the opposition first started to grow. McDonalds at that time did not take its brand blondness for granted and infused its yeasty teams minds into the thought process that hand over and continue to generate innovative products and campaigns like life-sized Mac and Egg McMuffin (Entrepreneur, 2006 online).McDonalds offers an extensive case study of the application of a intimately thought of and constitutional innovation strategy, a product planning and developmental process that effectively reflects the changing constancy, its opportunity mention and analysis to stay on top, and the Mcdonalization culture and snuff itership enter with i nnovation that it follows to successfully practice innovation in all aspects and obtain customer satisfaction that defines industry standards. But even for a company like McDonalds room still exists for improvement. The paper analyses the company on these aspects. The paper after analysis of the incarnate entrepreneurship and innovation strategy world following in the company provide attempt to establish tri excepte for the enhancement of the competitive advantages of the company.Innovation StrategyThink big, start small, scale fast. This is the innovation strategy being followed by McDonalds. This idea was brought to parther by the managing director of McDonalds Ventures, Mats Lederhausen (Entrepreneur, 2006 online). The key players are all of the employees of the company who are well ingrained with the 5PS that form the paradox of the company. These 5 PS are plenty, harvest-festival, Promotion, Place and Price. The innovation that takes place in the company is all customer-o riented and started with sight and ends with people making effective use of company resources, offers and tools. The innovation strategy is built on one concept Customer is king. The insights and demands of the customers are the main triggers of the entire innovation process. The franchisees are known as owner-operators who are a big part of the innovation chain. Keeping such diversified franchises and their thought processes altogether merged with the company objectives and essence is a big challenge which goat not be controlled or centralized. The innovation process is decentralized making the owner-operators feel as much important in the company as those who are part of the core headquarters as well as encouraging them to create competitive advantages for the company. McDonalds seizes both opportunity it lav to bring innovation and lead the industry. McDonalds success is also based upon its suppliers that are part of the three-legged stool. For McDonalds, the quality of its p roducts is of absolute importance. It specifies highest standards for suppliers in the food industry. McDonalds focuses on developing close relationships with suppliers. At McDonalds, everything is done on an open accounting, handshake trust basis(Times100, 2009). McDonalds passs closely with the suppliers to develop and improve products and production techniques. This dependency is described as a three-legged stool principle, and involves McDonalds, the franchisees and the suppliers. The growth and success of the McDonalds, in this way, is shared by the suppliers of the restaurant who are able to seemly the quality standards (Times100, 2009). For McDonalds, the relationships between franchisor, franchisee and supplier are of paramount importance to the success of the innovation led business.The lick of Innovation and CreativityThe owner operators are small business owners who bugger off the entrepreneurial zeal in them and offer mixed ideas and imaginative insights that form success drivers for the company. Thus, they are involved in each of the innovation steps and processes. Each of the franchise of McDonalds is in itself a mini laboratory that has millions of potentiality ideas stored just time lag to be explored and the owner operators are the main source of their retrieval and practice.Sources of IdeasFor McDonalds, following are the main sources of ideas.Consumers are the fore intimately innovation triggers. These include potential as well as existing ones. They are granted great importance and attention to point to new directions. This attention takes the form of informally monitoring potential ideas and strikes and formally arranging for consumers to earn an opportunity to express their opinions (Bygrave, 2008).Existing products and helper in the grocery are also continuously monitored or evaluated to uncover ways to improve the services. This results in innovative products and services that have more than market appeal with better sales and profit potential.Owner-Operators, like mentioned above, are the biggest and most effective source of ideas for McDonalds as they offer insights of local appeals surrounding the franchises, which are then incorporated into new products and services. McDonalds introduction of Apple and Walnut salads is one such example of its catering to the local demands, which were communicated effectively by the owner operators. But there are also many demands, such as Shrimp salads that McDonalds wadnot before long cater to, because of lack of resources.Federal Government is also a source of new product ideas in two ways. First, the files of the Patent Office contain numerous new product possibilities. Although the patents themselves may not be feasible, they feces frequently suggest another(prenominal) more marketable product ideas. Second, new product ideas buttocks come in response to government regulations (Drucker, 2008)Research and Development is yet another moreover self-aggrand ising source of innovative ideas for McDonalds. McDonalds has its mini-laboratories in each of its franchises as well as liberal laboratories in its head-quarters in US which are continuously engaged in bringing in new product ideas and ingredients and recipes to win customer satisfaction.The Creative carry throughAlthough, creative ideas may appear to strike McDonalds as suddenly as a bolt of lightning but they are actually the result of the creative process, which involves the following steps forwardnessInvestigationTransformationIncubationVerificationImplementationPreparation involves getting the mind ready for creative thinking. Preparation includes a formal education, on the job training, work experience and taking advantage of other check offing opportunities. This training provides a foundation on which to build creativity and innovation. Investigation is where a immobile understanding of the problem, situation or the decision at hand is developed. Transformation involves viewing similarities and differences in the study collected. This phase requires two types of thinking convergent and divergent thinking. Convergent thinking is the ability to see the similarities and the connections among various data and events. Divergent thinking is the ability to see the differences among various data and events. The subconscious gather ups time to reflect on to the information collected, this is done during the incubation phase. Next comes the illumination phase, where a spontaneous break finished causes the light bulb to go on. McDonalds Innovation Council then verifies the ideas where it conducts experimentation to test the success potential in the idea generated. Implementation then follows where the idea is transformed to reality (Entrepreneur, 2006 online).Opportunity Recognition and AnalysisA business opportunity represents a possibility for the entrepreneur to successfully fill a large full unsatisfied need that enough sales and profits result. Reco gnition of an opportunity results from the knowledge and experience of the company and its employees. McDonalds shed light ons effective use of its knowledge base and maintains proper records of its previous industry analysis to point to new directions and market niches to exploit profits out of. Each and every innovative opportunity is carefully assessed through with(predicate) an opportunity analysis plan. This opportunity analysis plan comprises of four sectionsA description of the idea and its competitionAn assessment of the domestic and international market of the ideaAs assessment of the entrepreneur and the team andA discussion of the steps needed to make the idea the basis for a viable business venture.Product Planning and Development ProcessOnce ideas emerge from idea sources or creative problem solving, they need further development and evaluation. The product planning and development process at McDonalds is divided into five stagesThe idea stageThe concept stageProduct development stageTest marketing stagecommercializationOrganizational CultureMcDonalds has succeeded because it offers consumers, workers, and managers efficiency, calculability, predictability, and control. This constitutes the McDonalds model of work practice and work design, known as McDonalization. McDonalds is a global capitalist organization that transforming the production, consumption and distribution of food more importantly everyday life. McDonalds employs Taylors and Fords methods in its conclave line production.Ritzer discerns four elements of McdonalizationEfficiencyCalculabilityPredictability andControl (Haworth, n.d.)McDonalds offers efficiency, which is the optimum method for getting from one point to another. This means that McDonalds offers the best available way to get from being hungry to being full. For working(a) people, quick and well access to food is a blessing and McDonald offers just that through its efficient work practices. This fast-food model offers people an efficient method for satisfying many needs. (Ritzer, 1996, Pp. 9-11)To achieve this efficiency, workers in McDonaldized systems function efficiently. They are provided with training to work this way by managers, who supervise over them closely to make sure they come up to standards. This is ensured by organizational rules and regulations regarding production of highly efficient work.On the other hand, McDonalds also offers calculability, which is an emphasis on the numerical aspects of products sold (portion size, cost) and service offered. Quantity has become equivalent to quality that is something that must be good. The common customers perception of bigger is better, is very successfully satisfied with McDonalds Quarter Pounder, the Big Mac, and the large fries. People quantify these things and run into that they are getting a lot of food for quite less money. For consumers this is the best deal but for the food-food outlets this is the extraordinary profitability. (Ritzer, 1996, Pp. 9-11)Consumers also calculate the time it takes to drive to McDonalds, be served the food, eat it, and return home and then, they correspond that duration to the time required to prepare food at home. They believe that it takes them less time to get it from McDonalds than prepare the whole meal at home. This calculation obviously supports home-delivery franchises such as Mcdonalds, which emphasis on time saving.The McDonaldized institutions combine the emphases on time and money. Workers at McDonaldized systems emphasize the quantitative rather than the qualitative aspects of their work. This causes the workers to focus more on the amount of work they do rather than how well they do it, at times. This is how McDonalds employs Frederick Taylors scientific management work practices, that related the work directly with pay. (Daft, 1997)The third element of the McDonalization is that McDonalds offers predictability, the assurance that the products and services forge t be the same every time and in all outlets. For example, the Egg McMuffin in New York is resembling to those in Chicago and Los Angeles. To be more precise, those eaten next week or next year will be identical to those eaten today. This provides a great comfort in knowing that McDonalds offers no surprises, its service is predictable. People know that the next Egg McMuffin they eat will taste about the same as the others they have eaten it will be what is expected and in mind of the consumer. The success of the McDonalds model explains that many people have come to prefer a world in which there are few surprises, because unpredictability can be dangerous too (Ritzer, 1996, Pp. 9-11) .Relating this to the work practices at McDonalds, the workers in McDonaldized systems also behave in predictable ways. They are confined by the corporate rules as well as the dictates of their managers. McDonalds offers extensive training to its employees, which is so standardized that whatever the em ployees say at customer touch points is scripted by the managers themselves. McDonalds has pioneered in the routinization of synergetic service work (Ritzer, 1996, Pp. 9-11).Fourthly, McDonalds practices control, especially through the substitution of nonhuman for human technology. A human technology is controlled by people a nonhuman technology (controls people. The people who eat in fast-food restaurants are controlled through lines, restrict menus, few options, and uncomfortable seats. All of these enable the customers to eat quickly and countenance (Ritzer, 1996, Pp. 9-11).The employees in McDonalds working under the McDonaldized organizations are also controlled to a high degree. They are provided trained to do a limited number of tasks in precisely the way they are ordered to do them. The technologies and the way the organization is point up reinforce this control. Managers and supervisors make sure that workers follow the line. (Ritzer, 1996, Pp. 9-11).How does McDonalds makes sure employees follow up to this control? It threatens them to substitute them with technology. But employees cannot be controlled from fouling up the systems operation. The manager cannot control a slow worker, who can still make the preparation and delivery of a Big Mac inefficient and worker who refuses to follow the rules might leave the pickles or special sauce off a hamburger, thereby making for unpredictability. And then a confuse worker can put too few fries in the box, making an order of large fries seem skimpy. It is for these reasons, McDonalds has been obliged to steadily replace human beings with non-human technologies, such as the soft-drink dispenser that shuts itself off when the blur is full, the french-fry machine that rings and lifts itself out of the oil when the fries are crisp, the preprogrammed cash register that eliminates the need for the cashier to calculate prices and amounts, and, perhaps at some future time, the robot capable of making hamburge rs. such technologies increase the companys control over workers. And in this way McDonalds can assure customers that their employees and service will be consistent (Ritzer, 1996, Pp. 9-11).Increasing Competitive AdvantagesBeing an innovation leader in the food service industry, McDonalds does not let its creative heads fall asleep. It is always looking for new directions to improve its customer services to pave way for profitable business. Following are the ways in which McDonalds can sustain and increase its competitive advantage in the face of aggressive rivalry in the food service industry.Enhancing Organizational CreativityMcDonalds can enhance its organizational creativity byEmbracing diversity one of the best ways to cultivate a culture of creativity is to hire a diverse workforce. When people solve problems or come up with ideas, they do so in the same framework of their experience. Hiring people from different backgrounds, pagan experiences, hobbies, and interests provid es the company with crucial raw material needed for creativity.Expecting Creativity employees rend to rise- or fall- to the level of expectations of entrepreneurs have of them. single of the best ways to communicate the expectation of creativity is to give employees permission to be creative (Morris, 2009)Expecting and tolerating yieldure creative ideas will produce failures as wells as successes. People who never fail are not being creative. Creativity requires taking chances and managers must remove employees fear of failure. The surest way to avert creativity throughout an organization is to punish employees who try something new and fail.Encouraging curiosity McDonalds may economize its managers and employees asking the question what if and take a maybe we could attitude to break out of assumptions that limit creativity. aftermath Problems as Challenges every problem offers an opportunity for innovation. Entrepreneurs who allow employees to dump all of their problems to desk to be fixed do nothing to develop the creativity within those employees.Providing Creative Training almost everyone has the capacity to be creative, but developing creativity requires training. Training accomplished through books, seminars, workshops and professional meeting can help everyone learn to tap their creative capacity.Providing Support the higher level management of McDonalds should give employees the tools and resources they need to be creative. One of the most valuable resources is time.Rewarding creativity they can also encourage creativity by recognize it when it occurs. Financial rewards can be effective motivation but non-monetary rewards such as praise, recognition, and celebration can be more powerful incentives.Modeling Creative Behavior creativity is caught as much as it is taught. Companies that excel at innovation find that the passion for creativity starts at the top. Entrepreneurs set examples of creative behavior, take chance and challenge the sta tus quo will soon find their employees doing the same (Morris, 2009).Improving the Creative ProcessTeams of people working together usually can generate more and more creative idea. tether techniques McDonalds can use to improve the quality of creative ideas that follow from its Innovation Council brainstorming, mind-mapping and rapid prototyping.Brainstorming is a process in which a small group of people interact with very little organize with the goal of producing a large quantity of novel and imaginative ideas. Another useful tool for jump-starting creativity is mind mapping, an extension of brainstorming. The strength of mind mapping is that it reflects the way the brain actually works. Rather than browsing out ideas in a linear fashion, the brain jumps from one idea to another. Generating creative ideas is a vituperative step in the process of taking an idea for a product or a service successfully to the market. However, entrepreneurs find that most of their ideas wont work and thats where rapid prototyping plays an important part in the creative process. The promise behind rapid prototyping is that transforming an idea into an actual model will point out flaws in the original idea and will lead to improvements in its design (Hisrich, 2009).ConclusionDick and Mac were the ones who capable the first McDonalds restaurant in 1940 in San Bernardino, California, and at that time they could not have imagined the worldwide phenomial success that McDonalds now enjoys. What got them famous was their winning formula of selling a high quality product stingily and quickly. The business really began to grow immensely once Ray Kroc, a Chicago based salesman, who was a marketing expert, joined the team (Watson, 2002). He decided to spread McDonalds formula throughout the United States and beyond. McDonalds now has more than 30,000 restaurants all over the world. Its serves 46 million customers everyday, that is equal to a lunch and dinner for every man, woman, and child in the world McDonalds enjoys sales over $38bn from the entire world, which make it the biggest food service company internationally. McDonalds paradox of success lies with innovation and giving customer satisfaction the priority for its service offerings and operations. It keeps track of industry changes, anticipates consumer preferences and incorporates them into the product. Also, insights and communication with owner operators provides new product ideas and a highly effective and successful innovation process that is dealt by the McDonalds innovation council and together with the organizational culture of McDonalisation, it is practicing innovation in all aspects and providing innovation embedded services all around the world. But even a company like McDonalds has room for improvement, whereby it can enhance the creativity of its organization by infusing the culture of innovation more predominantly than before into each organizational level and improving the overall creat ive idea generating process. In the face of globalization, innovation offers a highly effective opportunity which companies like McDonald are making effective use of but it is more of a continuous process rather than a one-time thing.