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Midterm Written Activity 3

The document discusses McDonald's use of big data analytics to improve business decisions and customer experience. It describes how McDonald's collects vast amounts of customer data and transitioned from average-based metrics to trend analysis to better understand performance across stores. The analysis enables McDonald's to optimize operations like the drive-thru and menu based on data to standardize the experience while allowing for local customization.

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jlancheta19
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54 views4 pages

Midterm Written Activity 3

The document discusses McDonald's use of big data analytics to improve business decisions and customer experience. It describes how McDonald's collects vast amounts of customer data and transitioned from average-based metrics to trend analysis to better understand performance across stores. The analysis enables McDonald's to optimize operations like the drive-thru and menu based on data to standardize the experience while allowing for local customization.

Uploaded by

jlancheta19
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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INFORMATION SYSTEMS ANALYSIS AND DESIGN MODULE 3

Midterm Written Activity 3


Filename: MWA3_LASTNAME

ACTIVITY 1: CRITICAL THINKING QUESTIONS


Based on the discussion, answer each questions and / or statements briefly. Write on the spaces
provided below.
1. What are the functions of databases and data warehouses?
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2. Why is master data management (MDM) important in companies with multiple data
sources?
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3. Why would a company invest in a data mart instead of a data warehouse?
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INFORMATION SYSTEMS ANALYSIS AND DESIGN MODULE 3

ACTIVITY 2: CASE STUDY


Business Case: Big Data Analytics is the “Secret Sauce” for Revitalizing McDonald’s
(Sources: Compiled from Van Rijmenam (2016) and McDonald’s (2017))
With 62 million daily customers and an annual revenue of $27 billion, McDonald’s has a
virtually unrivaled amount of data at its disposal to analyze. In order to dominate the market,
retain its loyal customers, and attract new customers who are skeptical of McDonald’s practices
and quality, it lends itself to its data, becoming an “information centric organization.” What does
it mean to be information centric? Instead of using a fixed process of production, service, etc. as a
business plan that is product driven, McDonald’s uses customer data to dictate its next move as a
customer-driven corporation. During the inception of McDonald’s in 1940, the McDonald
brothers derived a product-driven business centered around fast service and tasty food. While
that method was successful before other restaurants entered the fast food market, growth was
stunted due to a lack of innovation and change. So, the organization began to collect customer
data as a means to monitor successful products, customer demands, and the results of marketing
campaigns.
This venture led to McDonald’s becoming the premier fast food chain across the United
States in the 1980s. Soon after becoming a customer-driven corporation, McDonald’s introduced
the Happy Meal so families with small children could reduce costs and waste at dinner time,
released the Egg McMuffin as the most successful breakfast item of all time, equipped
professionals and teenagers with free Wi-Fi to expand its customer segmentation, and provided
nutrition details to become the most transparent fast food chain at the time. All of these
improvements derived from McDonald’s using its immense amount of data to set its chain apart
from the rest.
In 2008, to further improve its ability to leverage big data, McDonald’s made the
transition from average-based metrics to trend analytics. The issue with average-based metrics is
that it is hard to compare regions and stores. A store could be growing in its sales and
productivity but have the same average metrics as a store that is declining. Using trend analytics
allowed McDonald’s to combine multiple datasets from multiple data sources to visualize and
understand cause-and-effect relationships in individual stores and regions. The correlations it
found enabled its analysts to prescribe solutions to problems in sales, production, turnover, and
supply chain management to reduce costs and save time. The variables it studies allows
McDonald’s to create a standardized experience across the world. However, analyzing local data
in each store produces minor changes around the organization. For example, most McDonald’s
locations look the same, but each restaurant is slightly different and optimized for the local
market.

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INFORMATION SYSTEMS ANALYSIS AND DESIGN MODULE 3

A great example of McDonald’s big data analysis in action is its updated drive-thru system.
All fast food chains have bottlenecks in their drive-thru lanes, but McDonald’s average customer
wait time is about 3 minutes, which is close to the industry’s longest wait time of 214 seconds.
One of the most prominent issues in its drive-thru was that customers going through the line for
dinner, ordering large meals and searching over the menu for an extended period of time,
created a negative experience for each car in line behind them. In response, McDonald’s
optimized the drive-thru across three components: design, information, and people. Design
focused on the improvements to the drive-thru, including better speaker quality and higher
resolution, digital menu boards. Information centered around what was on the menu board. In
order to decrease order times, McDonald’s removed about 40% of the drive-thru menu board.
In its third aspect, people, the fast food chain attempted to reduce the negative
experiences for those in line by creating a second drive-thru line with a designated order taker for
each line, a third drive-thru window, and two production lines.
Another example showing McDonald’s commitment to being a customer-driven
corporation is its introduction of all day breakfast, which was the highest priority for customers
across the United States. Being the corporation with by far the largest share of the fast food
market, McDonald’s will continue to use its growing data sets to provide the best experience and
food to its customers (van Rijmenam, 2016).

REVIEW QUESTION:
1. Explain McDonald’s mission and responsibilities.
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2. What limitation did McDonald’s face in gaining data that was meaningful to decision-
making?
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INFORMATION SYSTEMS ANALYSIS AND DESIGN MODULE 3

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3. Why is the ability to identify patterns and relationships critical to McDonald’s operations?
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