Tired of waiting at what is supposed to be a fast-food restaurant?
As part of the Digital Transformation Project, we are proposing the implementation of a pre-ordering smartphone application for McDonalds Netherlands. On the base of our study conducted with university students living in Rotterdam, a pre-ordering application would be very well perceived at a fast-food chain like McDonald’s. Respondents indicated that, even they associated McDonald’s with quick service, they still had to wait up to 10 minutes for their food. The implementation of an app, that would take care of the ordering, as well as the payment in advance, would highly increase time-efficiency at the restaurants for consumers, as well as employees.
This digital transformation would go in line with McDOnald’s business model in terms of a reciprocal relationship since the implementation of a pre-ordering service would increase time-efficiency, which is a big part of McDonald’s business model. Being an IS Innovator (as they typically are one of the first companies to apply new technologies, as it was the case with NFC bank card payment), the prer-ordering app would moreover enable McDonald’s to secure its market leadership through fostering a relatively new type of innovation. Few companies in the industry have already applied such applications, however, more and more are joining the trend. In order to reassure its market position, McDonald’s should join the trend rather sooner than later.
The application is proposed for the Dutch market, where consumers are very much focused on time efficiencies and are very familiar with the use of smartphones, which leads to the assumption that the application will be accepted and anticipated by consumers. According to McDonald’s, the Dutch market furthermore shows great potential for growth, making it the ideal starting point for the introduction of such an application. The conducted survey confirmed these assumptions since a great majority of respondents indicated that they would make use of such an application if this would mean they would not have to wait for their ordered food.
As for any innovation, financial factors are important to be considered. The cost of the application, including the creation costs, the costs oft he IT expert team, the neccessary machines, and the marketing costs in order to raise awareness about this new ordering channel, are estimated to be approximately US$ 4,650,000. However, McDonald’s can be assumed to have enough financial resources to finance the development and implementation of the suggested application. Furthermore, its in-house tech team can decrease the costs for most kinds of technical issues.
In the end, there are also risks associated with the implementation of a new app, primarily stemming from its development, launch, user surface, and technical quality.
Those risks could involve no interest of acceptance by customers, and therefore more losses than revenues financially. There is furthermore the risk that franchisees will go against the company and not want to buy a license and install the use of the application. Finally, problems could surface due to technical issues, feasibility, and ease of use for certain smartphone operating systems and due to the competitors being further along in the innovation process which applications already further developed, which would turn McDonald’s into a laggard for innovation.
However, overall the implementation of such information technology has great potential and should not be offset because of the possible risks. McDonald’s should implement this application in order to not fall behind in the Industry, where other companies are already successfully employing such technology, and to improve their time efficiency, which is a crucial part of their business.