McDonald's - Change is necessary

McDonald's is one of the biggest globalised  restraurant chains and even companies like this can be restistant to change. To be successful though a company needs to change to grow and develop to what is popular in society at the time. Health is a big issue and there is a growing concern for obesity. 

 McDonald's has had to respond to this and have done so by adding nutrition information on their food to menus and packaging. This is a big risk as people may be put off the food but this had to be done to respond to the concern of McDonald's. Rumours about how bad for you their food is are often heard and this could help them to reinforce it is not as bad as people might believe.

"After listening to its customers, McDonald's is taking responsible steps to provide them with the tools they've asked for to make informed choices," (Parnell, 2006)



 McDonald's have had to use innovation in their menu in the UK. In the last 10-15 year  they constantly ran tests and pilots of potential new products to add to their menu. They followed a strategy to  widen appeal particularly for those with "healthy eating" in mind, whilst also building on their appeal to their main customers. They sometimes put the food past a panel made up of the type of people who they were aiming the product at. They'd then choose sometimes just one or two restaurants, but often several to run the products in for fixed period of time.

"We'd work first with our food suppliers and our food technical teams to get the products right for testing in our restaurants" said Jill Barnes, ex McDonald's Vice President of Quality. "We'd then carefully monitor sales - and how these sales "canibalised" sales of other products. What we were looking for were new products that would bring in extra sales, not just trade off against existing products."

To  limit risk for the change McDonald's would use tests to find out what foods customers would want and develop new foods to meet customers' needs.
 

References

Parnell, S. (2006, April 1). McDonald's responds to Nutrition, Obesity Concerns. Retrieved 1 19, 2012, from Heartlander: http://news.heartland.org/newspaper-article/2006/04/01/mcdonalds-responds-nutrition-obesity-concerns

Barnes, E. (2011, December 20). About menu change management. (J. B.-V. Quality), Interviewed)

Tip 2. Don't be resistant to change

Companies can have problems with innovation when it comes to not wanting to change what they currently have and worrying they will make mistakes and fail.  Failure is not a bad thing as long as you can learn from the mistake and move on in a positive direction and are able to cope with the failure.  

 “ Making mistakes can be the quickest way of learning” (Mckeown,2008)

 Learning from these mistakes could then eventually help develop a product and the company having greater knowledge of what not to do wrong next time.

http://www.valuebasedmanagement.net/methods_rogers_innovation_adoption_curve.html
Rodgers diffusion of innovation theory - 


It is important that companies continue to try to change their products and meet any new customer needs. Any product will have a life cycle which means that after a while the sales of the product will start to fall as competitors bring new things to customers. If a company depends too much on a product that gets older and older and doesn't get a new product in early enough then the company will start to see sales drop.

Marks and Spencer are experiencing good business forture after they used
innovation to turn their business around.

According to a recent article in "This is Money" ".... a range of innovative
products were also driving sales, such as its Nearly Naked lingerie range,
which is designed to disappear under clothing, and its water-resistant
Stormwear suits." (This is money.co.uk, 2011)  

 

 

In the 1990s it was a different story. Marks and Spencer didn't innovate,
they kept trading the same way as before. The product life cycle of a lot of
their products and services went into declide. Even as late as 2004, the BBC
were reporting that Marks and Spencer had got into trouble.

"Today, Marks & Spencer is often mentioned in the same breath as "dire",
"downturn" and "struggle". (Richardson, 2006)

References

Mckeown, M. (2008). The truth about innovation. Prentice Hall; 1 edition.

Richardson, B. (2006, April 14). Is Marks & Spencer's decline terminal? . Retrieved 1 19, 2012, from BBC NEWS: http://news.bbc.co.uk/1/hi/business/3624961.stm

M&S remains cautious despite trading success. (2011, May 24). Retrieved January 19, 2012, from thisismoney.co.uk: http://www.thisismoney.co.uk/money/markets/article-1724301/MS-remains-cautious-despite-trading-success.html#ixzz1jwTPlRBx

Starbucks - sucess from giving people what they want

 (Isabel Isidro) Managing Editor of Startbucks said "Starbucks is one of the most successful and admired companies today. It has grown from a single coffee shop in Seattle 33 years ago to a $4.1 billion international company. From tasty beverages to proprietary whole bean coffee blends to strategic relationships, small businesses have so much to learn from Starbucks."     

Starbucks are another company that represent a lifestyle with their products. They use words to entice their customers and produce an experience that customers are willing to pay money for rather than make a simple coffee at home

The experience they are selling is almost giving escapism from real life for those few minutes that they are in the coffee shop with their chose drink. As Starbucks is a high end coffee shop the target market they go for are people that have possibily come from work and want a relaxing escape ftom their busy office. Is a very innovative idea to make people feel they need this product to help relax and would happily come back for it another day. Starbucks have built a lifestyle brand and have loyal customers to this brand.

Tip 1. Keep Innovating

So successful companies are those who keep innovating, this is interesting.  Apple is a good example of this as they have developed their products for the needs of customers and kept innovating by making new products that seem different and still have the needs for the customer. By constantly researching what their customers want they bring out new products that have become successful.

Starting with the Mac that has now developed to more luxury goods such as the Ipad.. As the need for  portable computers has greatened Apple have developed their older products and been innovative to become successful with new products. Research to support this is a good way of successful innovation is Everette Rodgers 1983 “the innovation process is timeless” Companies have to keep innovating as if they stop the products they originally sell may not be the need of customers and target market anymore.

Apple Overtakes Exxon as Most Valuable U.S. Company

"Apple Inc. recently became the most valuable company in the United States, surpassing oil giant Exxon Mobile Corp." 

The success of Apple is rising every day as they focus on the needs of the customers and develop their technoloy to be a big competitor. As their new and unique products sell they are not only selling a product but a life style. When someone is seen with an Ipod, Mac laptop etc they are sterotyped with a certain lifestyle as it is a luxury and is quite expensive. People feel they need to it have this lifestyle that other people have. 

References
  
August 12, 2011, Finacing Wealth

http://www.financingwealth.com/2011/08/12/apple-overtakes-exxon-as-most-valuable-u-s-company/

What is innovation?

What is Innovation? That's a very good question. It sounds like it should be
about coming up with something new. We can all innovate, but my blog's going
to be about company's that innovate better than anyone else. "the smart companies will keep innovating and the wannabes will stop" (Mckwown, 2008)

"Innovating can be described as change, taking risks, being inventive..."

I'm expecting to find great innovation examples of products, process and strategy at
company's such as Apple, McDonald's, BMW, Shell, Tescos - names that have
national and worldwide fame. But I suspect I might find some unexpected
examples too. 

References

Mckeown, M. (2008). The truth about innovation. Prentice Hall; 1 edition.