Enterprise:

Enterprising is showing initiative and resourcefulness.

The benefits are smarter working as money will be saved. The risks are failing to meet
operational and commercial requirements.

McDonald’s was founded in San Bernardino, California on the 15th May 1940, by Richard
(16th February 1909 – 14th July 1998 (aged 89)) and Maurice McDonald (26th November 1902
– 11th December 1971 (aged 69)). The co-founders of McDonald’s also introduced the
‘Speedee Service System’ in 1948, which is now commonly known as ‘fast food’.

The American company, which is the worlds largest restaurant chain by revenue, serving
over 60 million customers daily in over 100 countries across 38,695 outlets as of 2019,
started off as a hot dog stand in Monrovia, California, in 1937. In 1948, the entrepreneurs
redesigned and rebuilt their barbecue restaurant in San Bernardino, focusing on
hamburgers, milk shakes and French fries. Operated by Neil Fox in 1953, the first franchising
restaurant was located in Phoenix, Arizona, as the brothers began franchising their system.
They partnered with Ray Kroc in 1954 and eventually got bought out by Kroc in 1961.

Lateral Thinking:

Lateral thinking is approaching things from different perspectives, encouraging creativity. It

is also known as ‘thinking outside the box’.

The benefits are unique selling points, improving recognition, reputation, products and
customer experience. The risks are cultural problems, such as resistance to change and
failing to achieve a return investment.

McDonald’s uses lateral thinking. An example of this is their Happy Meals, showing they
think practically and from the perspective of a parent trying to maintain a calm meal. With
its purpose to create a better dining experience for families with kids, Happy Meals allow
kids to have their own meal instead of picking a their parents food, as well as poring over
the various items on the packaging, which was inspired by cereal boxes.

In addition, McDonaldland, a fantasy world featuring McDonald’s mascots (Speedee (the

original mascot) and Ronald McDonald) and characters (Sundae, Grimace, Hamburglar,
Birdie the Early Bird, Fry Kids, Mayor McCheese, Officer Big Mac, Captain Crook, the
Professor, the Hamburger Patch, Uncle O’Grimacey, the Happy Meal Gang, the McNugget
Buddies, CosMc, Trash Cans, Bernice, Vulture, Iam Hungry, Griddler, Mike the Microphone,
Mac Tonight, Happy, Astor), was used in advertisements from 1971-2003, as a method of
marketing. Following this was the first PlayPlace in 1987, which included the crawl-tube
design, ball pits and slides, these visual representations were produced to maintain
McDonald’s welcoming, family-friendly atmosphere.
Ronald McDonald’s likeness spawned an endless line of restaurants, television commercials,
merchandise, video games and movies.

As a way of advertising McDonald’s, moving away from the image of a cheap feed for kids to
a place for adults, they released an advertisement, featuring Mac Tonight (an
anthropomorphic crooner crescent moon head wearing sunglasses on a mans body with
1950s-style music, playing the piano. While Ronald McDonald was the mascot for the day,
Mac Tonight took over at night, in attempt to boost sales.

Although, with this arose two matters. The song they chose to parody was ‘Mack the Knife’
made famous by 1950s star Bobby Darin and Darins only son used McDonald’s for $10
million, claiming there was no permission granted to use the song prior to the release of the
footage.

Another issue was the making of an unofficial parody of Mac Tonight, called Moon Man.
This character advocated racism, white supremacy, antisemitism, neo-Nazism, terrorism,
race war and genocide. Video were made portraying of him chanting KKK (Ku Klux Klan).

The advertisement stopped airing, however some McDonald’s fitted in animatronic Mac
Tonights playing the instrument and singing but many were taken out after 2011.

Blue Sky Thinking:

Blue sky thinking is approaching things with no perspective or restrictions so all thinking is
creative. Anything is possible and has no limits to what an individual or group can come up
with.

The benefits are unique selling points. The risks are failing to achieve a return investment
and not being able to recreate complex ideas.

I can’t think of a way McDonald’s have used this technique, however an example of this
method being used is Dyson, as James thought of creating products, such as the bagless
hoover.

Chance and Serendipity:

Chance and serendipity are ideas that occur unexpectedly or by accident.

The benefits are saving time in the production and development stages and achieving a
return profit. The risks are that it requires longer research and testing to get it right.

I cant think of a way McDonald’s have used this technique, however an example of this
method being used is penicillin (discovered by Alexander Fleming in 1928), which was an
accidental legendary discovery but is known as the first effective antibiotic that could be
used to kill bacteria.

Intuition:

Intuition can be something that happens naturally but could also occur as a result of a
thought process and decision making.

The benefits are development of new and niche market, achieving return profit and
improving recognition and reputation. The risks are that a business could go with gut
feelings without doing market research, leading to a failed product.

McDonald’s uses intuition when deciding on the food items on their menus. McDonald’s
predominantly serves the following products: burgers, various tyeps of chicken items,
French fries, soft drinks, breakfast items, desserts, salads, vegetarian items, wraps and
seasonally brings out the McRib sandwich. There are international menu variations, eg, the
first kosher McDonald’s was established in 1997 at the Abasto de Buenos Aires mail in
Buenos Aires, Argentina, as well as other variations including: soup is served in Asia, McRice
is served in Indonesia, Ebi (prawn) Burger is served in Singapore and Japan, beer is served in
Germany and Western Europe, meat pies is served in New Zealand, Big Macs in a pita with
Tzatziki sauce is served in Greece, etc.

This shows how McDonald’s adapts around the world, recognizing the fact that consumer
tastes change, eg, after receiving backlash on the unhealthiness of their main menu
offerings, McDonald’s started serving fruits, smoothies, fish items and salads. Their
worldwide success is due to the adaptions they make in different countries, catering to the
diverse needs of consumers, basing their offerings on consumer demographics, local and
economic factors, showing they respect the differences between cultures.

Another example of adjusting to be convenient for customers is the types of restaurants

they provide service in are the following: standalone McDonald’s restaurants (offer counter
service and drive-through service, with indoor and sometimes outdoor seating), McDrive,
McCafé, ‘Create Your Taste’ restaurants (2015-2016), McExpress (connected to gas stations
and convenience stores), McShop (truck stops), McTrax (recording studio), McDonald’s Next
(implicates an open-concept design with ‘Create Your Taste’ digital ordering, as well as free
mobile device charging and table service after 6pm).

Innovation:

Innovation is creating a new method, idea or product that is useful, satisfies customer needs
and increases value or something customers will pay for. The following are 3 different types
of innovation: product (changing an existing product or developing an idea into a new
product), process (changing an existing process of production) and service (changing the
way service is given, eg drone delivery).
The benefits are development of new and niche markets and unique selling points. The risks
are failing to achieve a return on investment and also time is wasted if the product is not
successful. It may not be able to meet the operational and commercial requirements and
cultural problems (change systems, leadership and management) may occur.

A Happy Meal, which has been sold at McDonald’s since June 1979, is a kids meal. It is a red
cardboard box (with a yellow smiley face and the McDonald’s logo) that consists of a main
item (hamburger, cheeseburger, chicken McNuggets), a side item (French fries, apple slices,
go-gurt tube, cookies or salad), a drink (milk, juice or soft drink) and a small toy which is
frequently part of a marketing tie-in to an existing television series, film or toyline, alongside
the packaging.

First ran in the US in 1987 and been used since worldwide, the McDonald’s Monopoly game
is a sales promotion run by the fast food restaurant chain, with a theme based on the
Hasbro board game. Customers received a set of two tokens with every purchase originally
but now tokens only come with certain menu items. These tokens, which correspond to a
property space on the Monopoly board, may be redeemed for prizes, such as money or
certain free food items.

Creativity:

Creativity is the use of imagination or ideas to create something, which is wanted by

employers and required in order for a business to be successful.

The benefits are being able to improve products and customer experience. The risks are
failing to achieve a return on investment and complex ideas may not be able to be
recreated.

A creative process:

A creative process is an approach to creativity which is planned and involves a set process
made up of four steps (Preparation, Incubation, Illumination and Implementation) or more
depending on the product or company. The first stage is Preparation, researching or
reviewing current processes. The second stage is Incubation, reflecting and working through
ideas consciously and sub consciously. The third stage is Illumination, ideas beginning to fall
into place. The final stage is Implementation, putting ideas or processes into action.

The benefits are smarter working, improving recognition and perfecting reputation
products. The risks are failing to achieve a return on investment and also time is wasted if
the product is unsuccessful.

Yoland Fernández De Cofiño who worked with her husband, operating McDonald’s
restaurants in Guatemala, created the Ronald menu, which consisted of a hamburger, small
fries and small sundae to help parents feed their children more effectively. This concept was
brought to the attention of McDonald’s management in Chicago, where the company gave
the development of the product to Bob Bernstein.

Bernstein, who regularly met up with the McDonald’s restaurant owner clients, came up
with the idea for the Happy Meal and got his creative team to mock up some paperboard
boxes resembling lunch pails with the McDonald’s Golden Arches for handles. Childrens
illustrators were called in to fill the box’s sides and tops with their own colourful ideas and
whatever they thought might appeal to kids, eg, art, jokes, games, comic strips, stories,
fantasy.

Before the decision to provide toys related to a television series, film or toyline, (eg, Star
Wars, Batman, etc.), they used to be McDoodle stencils, McWrist wallets, ID bracelets,
puzzle locks, spinning tops, McDonaldland character-shaped eraser, frisbee or ball).

Product or Service Development:

Product or service development is a significant part to a business success. It requires

innovation and logical thinking and can either be adding and improving to a brand or new
product development.

The benefits are improving to products, processes, services and customer experience and
business growth. The risks are cultural problems such as resistance to change and also
failing to achieve a return on investment.

Ray Kroc (5th October 1902-14th January 1984) is best known for purchasing, popularizing
and ‘founding’ McDonald’s. during the First World War, he lied about his age and became a
Red Cross ambulance driver at the age of 15, unknowingly alongside Walt Disney. During the
Great Depression, he sold paper cups, worked as a real estate agent in Florida and
sometimes played the piano in bands.

After the Second World War, he was employed as a milkshake mixer salesman for the
foodservice equipment manufacturer Prince Castle. He was impressed by the McDonald
brothers who purchases eight of his multi-mixers for their restaurant and visited them in
1954. Having joined the company as a franchise agent, he eventually bought them out of the
industry in 1961, due to disagreements over goals, leaving them with their first restaurant,
which due to legal reasons, had to change the name to ‘Big M’ (it closed in 1967). He retired
from running McDonald’s in 1974 and purchased the San Diego Padres for $12 million.

New ways of increasing business efficiency and improving profitability:

New ways of increasing business efficiency and improving profitability are changes, such as
reducing costs and increasing productivity. Another change is increasing income by
improving old services and products or developing new ones. A plan is needed in order to be
successful.
The benefits are improving products and smarter working. A risk is failing to meet
operational and commercial requirements.

McDonald’s started as a hot dog stand, in Monrovia, California that had a few customers.
Maurice opened a bigger hot dog stand in San Bernardino, which later expanded into a
drive-in barbecue restaurant on the corner of 1398 North E Street and West 14 th Street.

The restaurant attracted mainly teenage or young adult males in their 20s (who came to flirt
with the carhop young women) and young working families (who came for a cheap meal)
and the brothers took it upon themselves to plan and renovate their business model, after
recognizing their target audience would be families.

They realised they would have to change the way in which they deliver service to customers,
as the carhop young women weren’t an efficient method (they were considered to be slow,
unreliable workers, spending most of their time flirting with the customers in order to
increase their tips). They also noticed their hamburgers (which were cooked on griddles
(these were also easier to clean than grills) and faster to assemble than sandwiches)
accounted for a large proportion of their total sales. They took these observations into
consideration, by eliminating waiting staff (meaning orders were taken in person at the
front counter, where the food was also delivered) and focusing on hamburgers (making it
one of their predominant food items on the menu).

As well as these changes, the designs were done deliberately so in aims to omit an interior
dining area (possibly to encourage eating in as an alternative option to drive-ins) and to
maximise efficiency and output (burgers were also pre-cooked and kept warm by high-
powered heat lamps (this may be the basic design of the modern fast food restaurant today
but at the time it gave McDonald’s an overwhelming advantage against the other
competitors.

In 1953, the first one franchise was located in Phoenix, Arizona, operated by Neil Fox, later
also franchising the name of their restaurant, using Richards suggestion of the famous
Golden Arches, which formed an M.

Successfully exploiting a new idea:

Successfully exploiting a new idea can be developing an existing business or starting a new
business.

The benefits are development of new and niche markets and offering unique selling points.
The risks of using this technique are failing to achieve a return on investment and wasting
time and money.

Burger chef was an American fast food restaurant chain founded by Frank and Donald
Thomas in 1954 but unfortunately became defunct in 1996 (sold to the owners of Hardees).
The business, which served in 1,050 locations, was inspired by Burger King and McDonald’s,
once almost having as many stores as the latter, with many reasons, such as the time when
they partnered with Star Wars in 1978 to create seven different kids meals and also C-3PO
and R2-D2 appeared in their advertisements.

The concept of the kids meal also originated here. Not McDonald’s. Burger Chef started the
Funmeal. In 1973, the chain created the Funburger and the Funmeal, packaged in a colourful
box, which included stories about the chains two mascots (Burger Chef and Jeff) and their
adventures and friends (including the magician (Burgerini), vampire (Count Fangburger),
talking ape (Burgerilla) and witch (Cackleburger), riddles, puzzles and small toys.

Burger Chef sued McDonald’s for their Happy Meals, which were introduced in 1979, on
claims the rival claim had appropriated the idea of the fun meal but lost the case.

Adding value to a product:

Adding value to a product increases the amount of profit a company makes of a product and
also benefits the customers by meeting customer needs.

The benefits are improving products and smarter working. The risks are failing to achieve a
return investment and failing to meet operational and commercial requirements.

To reduce childhood obesity, the San Francisco Board of Supervisors passed a law that
required childrens meals sold in restaurants to meet certain nutritional standards before
they could be sold with toys, on the 2nd November 2010. As long as the meal contains less
than 600 calories, less than 640 milligrams of sodium, fruits and vegetables and beverages
without excessive fat or sugar, it was alright for them to be sold with a toy.

Added Services and New Markets:

Added services and new markets are used to make a business different from its competitors.

The benefits are business growth, development of new and niche markets and unique
selling points. The risks are failing to achieve a return investment and failing to meet
operational and commercial requirements.

McDonald’s help in many ways, whether its providing money or food. Ronald McDonald
House Charities is an American nonprofit organization, which started on 15 th October 1974,
with aims to create, find and support programs that directly improve the health and well-
being of children. The business hosts McHappy Day annually, a percentage of the sales going
to the charity.

Also, in 1995, an individual involved in a scheme to defraud McDonald’s posted a letter,

including a $1 million winning McDonald’s Monopoly game piece to St. Jude Children’s
Research Hospital. Despite the intention was to tarnish their reputation, the business made
the annual payment of $50,000 for the full 20 years.

As well as children, McDonald’s in Hong Kong, Japan and China allow McRefugees (poor
people) to use the 24-hour restaurants as a temporary hostel.

The importance of the role of innovation and enterprise at McDonald’s is significant,

because it’s vital for business survival. Through adding value and efficiency, innovation
ensures engaged and inspired staff and an increases in customer interest (thereby helping to
increase the amount of customers, the sales numbers and the profit), whereas enterprise
allows the company to take risks, show initiative and undertake new ventures. These both
encourage the business to renew and review, making improvements and overall, forming
competition within the market. Taking these risks is beneficial for McDonald’s as it improves
product, process, service, customer experience and the recognition and reputation of the
business. It makes products unique from competitors and helps the growth of the business.

Justify the use of innovation and enterprise for a business in relation to its changing
market and environment:

Technology:

A way McDonald’s is innovative is adding value to the business, by adding free Wi-Fi and
charging ports in their restaurants. As the worlds developing and becoming modernized and
advancements in technology is increased, these incentives cater to customers needs.
Unfortunately, the amount of kids who require a device to stay quiet or eat calmly has
increased and McDonald’s free wifi and charging ports may allow parents attempts to have
a nice meal. This could also lead to promoting McDonald’s, as more people are also
beginning to have an online presence, eg, customers may post on their story on a social
media app with McDonald’s location or McDonald’s social media tagged on. This then is
even more beneficial, as it creates brand loyalty and brand awareness, especially if
customers social accounts are all synced up together. This helps McDonald’s recognized
worldwide, contributing to their success, as global consumers means more people buy their
products, so they gain more profits. It is important for McDonald’s to also have a strong
digital presence, such as Instagram, Twitter and Facebook, where they can promote online.
Regular posts and interaction would contribute to McDonald’s success, as this would
increase brand loyalty and brand awareness, enabling products to reach further audiences,
helping McDonald’s gain more customers or encourage existing customers to become
regular customers. Their website is informative, in the sense its all about the business,
products, as well as letting customers know that something is happening, which is crucial.

COVID-19:
Undoubtedly, COVID-19 has had an impact on business, creating challenges and uncertainty.
In order to keep their profits high, McDonald’s delivers food to doorsteps. They were also
one of the many eateries to have participated in the ‘Eat Out To Help Out’ scheme, which
was a program offering discounts on meals, in order to keep the economy running.

Responses to Feedback:

Reflecting customers awareness of food provenance, McDonald’s changed the suppliers

from which they receive coffee beans (now taken from stocks certified by the Rainforest
Alliance, a conservation group) and organic milk. Also, by 2018, McDonald’s in the US and
Canada started using cooking oil, which contain no trans fat and canola-based oil, which
contains corn and soy oils.

Environmentally Friendliness:

There have been studies of litter, which have found McDonald’s to be one of the most
littered brands worldwide, eg, a ‘Keep Australia Beautiful’ study in 2012 found McDonald’s
to be the most littered brand in Queensland and a ‘Keep Britain Tidy’ study in 2009 found
McDonald’s to be the leading producer of fast-food litter on British streets, which accounted
for 29% of the total. Participants in Operation Send-It-Back, launched by London
Greenpeace in 1994, returned 30 sacks of McDonald’s litter to the business. In the 70s,
McDonalds started using a delivery system that pumps syrup directly from the delivery truck
into storage containers, saving them two million pounds of packaging annually. In 1990,
McDonald’s worked with the Environmental Defense Fund to stop using clamshell-shaped
styrofoam food containers. In April 2008, 11 McDonald’s in Sheffield, England, participated
in a biomass trial program which cut their carbon footprint in half, as well as the waste,
which was collected by Veolia Environmental Services, who used it to produce energy at a
powerplant. McDonald’s in Europe recycle their vegetable grease by converting it to fuel for
its diesel trucks. A prototype in Chicago in 2009 was designed to save energy by managing
storm water, using skylights for more natural lighting and installing partitions and tabletops
made from recycled goods. In 2012, they trialed replacing styrofoam coffee cups with
alternative materials. In 2019, McDonald’s in Ireland and the UK switched to paper straws in
response to plastic pollution, however the Sun ran an investigation to have found out the
straws unrecyclable. Even though McDonald’s uses a corn-based bioplastic to produce
containers, its been criticised as biodegradation is slow, produce greenhouse gases and
complicate recycling efforts.

In conclusion…
Part of McDonald’s success is due to the various methods of innovation and enterprise
being used. One predominant example of innovation being used was through successfully
carrying out their new idea, the Speedee Service System. Despite having choreographed
multiple versions oof the kitchen layout (real sized dimensions were chalked up on a tennis
court) for over 6 hours, Richard and Maurice were eventually able to work efficiently to
deliver fast fast-food. This system clearly worked for them, since they are the second largest
fast-food restaurant chain with over 36,000 outlets across over 100 countries, as well as
having their system somewhat implemented into the operations of many other businesses.
Therefore, innovation raises the revenue of a business, leading to success, as more revenue
is bought in (the revenue totaled upto $19,117 as of 2005, having increased in 2019 by
$1960). McDonald’s can then spend this money by innovating their products, by developing
a new idea, developing the product and adding value, in order to increase sales and
profitability, as well as enabling themselves to stay ahead of Burger King, KFC and other
competitions. Innovation and enterprise has also given McDonald’s a reputation for
customers and possible employees, not only allowing them to thrive in sales but also to gain
a status and reputation amongst the market. As its been mentioned above, innovation and
enterprise has been used throughout the lifetime of this business, in regards to adjusting to
the way the world works now, in the sense that they also engage with social media, as well
as literally adjusting their restaurants to provide free wifi and charging ports. Also, they are
showing brand personality, trying to be as eco-friendly as possible, making changes or
completely eliminating certain aspects. With people more aware now more than ever, this is
good for the business, as it shows the public the effort they put in attempts to reduce waste,
plastic pollution, greenhouse gases and to save energy.

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