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Importance of Innovation and its Types- McDonald's

University: Regent College London

  • Unit No: 8
  • Level: High school
  • Pages: 14 / Words 3607
  • Paper Type: Assignment
  • Course Code: M/508/0494
  • Downloads: 296
Question :

This Assessment covers following questions:

  • Analyse and Explain the context for innovation and determine the difference between invention and innovation.
  • McDonalds is a American based fast food chain. Explain the various types of innovation.
  • Discuss the process required to commercialise innovation in the context of McDonalds .
  • Evaluate the range of methods for protecting ideas and understand their benefits and limitations.
Answer :
Organization Selected : McDonald's


Innovation can be said as process of generating new ideas into business which are beneficial for the firm. Innovation proves to be more beneficial for company as it involves use of new technology, new ideas and new suggestions. McDonald's founded on April 15, 1955 is a fast food company serving hamburger across many parts of the world. In the present study, Innovation and its importance will be described. Further more, organisational vision and culture can shape innovation is explained in present report. In the present report, 4Ps of innovation and use of innovation funnel along with developments in frugal innovation will be determined. Also, importance of commercial funnel and an innovation business case will be explained in present study. Furthermore, the different tools that organisation can use to develop, retain and protect knowledge and intellectual property will be described.

LO 1

P1 Innovation and its Importance

Overview of McDonald's: It is one of the world's largest fast food company who provide different products to their customer at cheap rates such as Sandwiches, Hamburgers, chicken, fish and burgers.

Innovation can be said as bringing of new ideas, better solutions in business. Through innovation new requirements can be achieved and better effective products, services and technologies can be made available to markets (Vermeir and et.al., 2018). As environment of business is changing day by day it becomes necessary to cope up with this changing environment and develop new styles and new ideas in working of a business. Innovation brought in organisation will generate new profits and develop better corporate image in the markets. Importance of innovation can be described as follows-

  • It is consider as an important process because it basically penetrates the market faster and also creates better connection in order to develop new markets. Therefore, it leads to perform better market opportunities to different nations.
  • In McDonald's the company also uses different variety of innovative products in order to draw attention of many customers towards them. In a quoted company it also assist to develop original concepts and proactive confident to take risk and get the things done in proper as well as appropriate manner (Reckwitz, 2018).
  • While on the other side if the organization have innovative culture then they will definitely grow their functions in such a creative way that it help to expand its current business into next further level of success.

Difference between Innovation and invention

Basis Innovation Invention
Meaning It implies to the implementation of an idea for the product as well as process in very fast period of time (Differences between Innovation and invention, 2018) It refers to the occurrence of an innovative idea for a product and process which is never done before.
Applicability It requires practical implementation of an idea It is based upon a working theory as well as original idea.
Focus It mainly focus on adding value to an existing products and develop into new ones. It is a creation of new products.
Skills required Marketing, technical as well as strategic skills are required to get the work done. Only required scientific skills in order to execute the work.
Obsessed with It required combination of various products as well as process Only concerned with single products and process.
Activities required Spread across all over the world Limited to research and development department of a company.

P2 Organisational Vision, Leadership, Culture and Teamwork can Shape Innovation and Commercialisation

Vision: McDonald's vision is “to move with the velocity in order to drive the profitable growth and become the best brand in the world by serving the best and delicious food products to their customers”. In addition to this, in recent years the company wants to become the modern, progressive burger company who deliver the best and healthy food products to their customers. This vision power will help to creates more new products for their customers demand in order to provide them more delicious food variety (Kong and Ko, 2018). As the vision power of the company is so strong that will definitely help to shape up the company's internal as well as external culture. 

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Leadership: If the leaders of manager of the company has good and strong leadership skills then it will help to lead the entire team towards the progress. A strong leadership skills will help McDonald's to run the company in further level of success. Therefore the leaders should have autocratic, democratic and participative skills which help to lead a team in better way. Only leaders are the person who can create new and innovative products or services as they having a strong vision which helps to take better decision for the welfare of a company.

Culture: Culture is consider as an integral part of the business. Having a diverse culture will creates impact upon the efficiencies of the employees in positive way. Moreover, diversity can be consider a beneficial for the innovation and by bringing together with different point of view will help to widen up the pools of ideas (Li and Yang, 2018). A good working culture of a company will help to lead a business in further level of success. If the employees of a company will adopt the right working culture then it will be helpful to creates new innovative products and as a result, it can shape up the innovation and commercialization.

Teamwork: A good team work will also help to run a company in effective way such that teamwork and cooperation will help to lead a team and easily achieve defined goals of a company. By putting extra efforts in order to achieve the defined goals of a company will help to achieve the goals in prescribed way. Therefore, teamwork will also help to shape up the innovation and commercialisation in McDonald's.

LO 2

P3 4Ps of Innovation and use of Innovation Funnel

Innovation funnel is 4P's model that is used to discover new and innovative process in order to improve the business condition in bring new ideas for the welfare of a company. This innovation mix are as follows:

Products Innovation: It is the first innovation 4P's under which different products are offered to their customers with low and affordable prices (Li, Li and Lin, 2018). As the company offer variety of products in order to attract new and wide range of customers. In addition to this, McDonald's can also change their packing system in order to look it more innovative and further by providing different innovative products to their customer will also help them to gain high competition in market. Therefore in this way the innovation can be done in order to change their current marketing business.

Process Innovation: It is a way which help to provide the product services to their customer. Therefore by changing the ways of product delivered it will help to maximizes their current business. For example, if McDonald's uses 90 percent of the online services in order to attract wide range of customers which help to maximizes their business. In addition to this, the leader of a company should hire the best employees so that through their critical thinking the business will automatically achieve the success (Chand and et.al., 2018).

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Position Innovation: It is a third process. Which states that if the goals are unique and specified for innovation and commercialisation process then McDonald's can easily attain the position which they wants to achieve. For example, if the company open new market segments by targeting new individual person such as old age group people they they have to set the menu as per their requirements. Further in order to survive in this competitive world, McDonald's has to use the innovation mix in order to improve several business aspects.

Paradigm Innovation: It is the last step of innovation mix under which the organization may faces many challenges while innovative new products for their customers. While innovative new services or products, McDonald's may faces problem such as there are some people who did not like this new and innovative food products such as Gourmet dishes (Reiter-Palmon, 2017). Then there is a chances that may be it will decline the profit of a company and at that time they have to make strategies in order to overcome from those problems.

P4 Developments in frugal innovation

Frugal Innovation: It is a process of invention of new products and services idea for the development of a company. Moreover, through frugal innovation, McDonald's can reduces their expenses and maximizes their profit margin. Frugal innovation also provide the importance of product and services by moving to the lower level of buyers and acts like the reducing the cost of offered products (Nguyen, 2018). Usually, this help to remove the non- essentials features of the products and also make the product more useful for the company. Such type of services needs not to be inferior quality but provided in such a cheap rate to their customers. Frugal innovation in McDonald's is not uses in the terms of technological breakthroughs but it also includes the incremental process and different products innovation whose main aim is to maximizes the profit for a company.

For Example: McDonald's offer wide variety of the products for youngsters, but they did not offer product to their old age group people. Because it has been analysed that old age group people generally did not prefer to eat fast food. Therefore, McDonald's start introducing gourmet food services to their young age people where they can enjoy food with good cultural environment. On the other hand, young age people generally, prefer to eat fast food and enjoy to go in new restaurant while old age people are quite conscious related to their diet. Therefore they did not generally prefer to eat those fast food.

Hence frugal innovation is actually deal with the changes as per required by the company's environment (Sudarić, Zmaić and John, 2017). That is why McDonald's also try to use this frugal innovation in order to expand its current business and which help to maximizes their profit as well. It has been analysed that using frugal innovation into working area will helpful to shape up the innovation process. If McDonald's always uses this and creating new innovative things then it will help them to maximizes their current business and also helpful to sustain their brand image in market.

LO 3

P5 Importance of Commercial Funnel and Application of New Product Development for McDonald’s

Commercial Funnel: It is not like other funnel, and if the company have the sales funnel then it will enhances the capacity of business to operate it at online as well as offline mode. This also helps to bring customers at large range by developing new strategies into a business. The importance of commercial funnel is as follows:

  • Having a commercial funnel will help McDonald's to gives the visibility and consistent process which helps to creates the best result for the welfare of a company (Yun, 2017).
  • This is an absolute necessity to make sure that the company is taking a regimented, methodical and well- organized approach in order to build the best relationship with their customers.
  • If McDonald's have the sales funnel then it will help to create the consistent, organized process in order to evaluate, ranking and sorting the sales leads of a company. Moreover, by the usage of this funnel, the company will more focus on the right sales and also allow to devote the time and resources for the working with right sales leads.
  • By using the sales funnel in McDonald's, the company can easily monitor the sales lead during a particular time and it will also helps to expand a business as per the requirement of a company (Vanhaverbeke, 2017).

Application of New Product Development: NPD is a process of covering the complete process of bringing them into new market. The main key aspect of using this is product design with the various business considerations. Further it also refers to the transformation of market opportunities into a product which is available for a sale. As McDonald's is also wants to introduce its new product innovation and it is based upon eight process which are describe below:

  • Idea Generation: It is the first step of new product development under which the idea can come from anywhere and by using SWOT analysis, McDonald's can determine the strength, weaknesses of that new product (Desmet, 2018).
  • Idea Screening: The idea of new product is may be good and it also involves some feasible ideas that includes company's strength, weaknesses, needs of customers.
  • Concept development and testing: all the ideas are passes and the testing is done whether the new product is helpful or not.
  • Business strategy analysis and development:Through marketing, McDonald's can decide different methods to promote the product into market.
  • Product development: In this stag the product concept is actually transformed into an tangible products.
  • Test Marketing: Under this, prototype is introduces in market for test and taking feedback for further improvements (Galli and et.al., 2017).
  • Commercialisation: Under this stage, the product is ready and final decision is taken to introduce it into market.
  • Introducing: its time to introduces the product into market.

P6 Innovation Business Case

Business case is a systematic approach which is done step by step process which help to build or expand a business into next further level of success. It is the most clear and advance technique which is actually provide all stakeholders of McDonald's an essential information with clear and transparent process. This business case generally includes:

  • It offer different creativity tools in order to start the business process. Also provide different suggestion as well as guidelines in order to make the case more strong and effective (Tukker and Tischner, 2017).
  • Next step is case preparation and cost benefit analysis in which the employees or stakeholder of McDonald's can clarify the doubts or uncertainties.
  • Next step is to develop new marketing strategies that also outlines the different tactical moves.
  • Last step is to check the entire format and the USP also needed to translate the case into winning commercial prospects.

Ways of access funding: There are different methods of funding and some of them are as follows:

  • Bootstrapping: It means that McDonald's can uses their own personal saving which they saved for their personal usage. It is one of the best and simple method to get the fund.
  • friend or family: It is another method where a company can manage the fund through their family or friends. Even they also inviting their family or friends to invest some amount for the company's expansion (Homburg and et.al., 2017).
  • Crowdfunding: It is a process which provide small amount of money from different range of peoples through Internet. Now a days this method is consider the most common way of assessing fund.
  • Angel investors: It refers to those person who invest some amount for the company. They are the person whose main aim is to provide the necessary help to those who wants to expand their business into further level of success.

LO 4

P7 Different Tools to Develop, Retain and Protect Knowledge and Intellectual Property

Intellectual Property is a category of property that basically includes the copyrights, patents and trademarks. These property help to encourage the creation of a large variety of intellectual goods. In order to achieve this, law of a country also provide different legislation for the company and some of them are as follows:

Patents: It is an right which is granted for an invention or provides to those who innovate new products and also offer new technical solution for a problem. Patent also provide its owner a right in order to exclude others from making, using, selling the product. If McDonald's have this right then entire logo and products are protect from any unnecessary deeds (Kalish and et.al., 2018). Moreover, in many countries, patent rights are fall under civil law and the holder needs to take action if any person infringes this. For many companies, this patent law is as essential as to gain competitive advantages.

Copyrights: Copyrights protect literary, artistic and musical work. The main use of copyright is to protect company's brochures, annual report and many other documents. Therefore, it is also essential for McDonald's to use copyrights as an intellectual property so that it will help to protect the brochure of a company from any unnecessary result. If a person uses the important document of a company and uses those into their own personal benefits then it is against the law and they are liable for any miss- happening.

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Trademarks: This is the most common law which is used by many companies and this help to protect the words, names, symbols and devices which are used in the connection with goods and services in order to identify their source (Schöggl, Baumgartner and Hofer, 2017). Through this law, McDonald's also protect their brand image and also saves their logo from any mischiefs. If the company uses trademark in order to protect their logo, labelling and make them differ from other companies, then it will be helpful for them to use this into the working area.


By summing up above report it has been concluded that innovation and commercialisation plays an important role in McDonald's. As the company wants to introduce new product in order to expand their business and maximizes their profit. Report also concluded that innovation and invention are two different things and also states that vision, culture, leadership and teamwork help to shape up the innovation. Report further concluded that by using innovation mix 4 P's, the company can easily innovate their new ideas. Report also describe the use of commercial funnel which is used for the development of the new products into the working area. It also describe the application of new product development and through business case, this new product is introduce in a market. Report also evaluates different intellectual property tools such as trademarks, copyrights and patent which should be used by McDonald's.


  • Chand, M. and et.al., 2018, July. Entrepreneurship, Innovation and Creativity in South Asia. In Academy of Management Proceedings (Vol. 2018, No. 1, p. 17897). Briarcliff Manor, NY 10510: Academy of Management.
  • Desmet, P., 2018. Measuring emotion: Development and application of an instrument to measure emotional responses to products. In Funology 2 (pp. 391-404). Springer, Cham.
  • Galli, B. J. and et.al., 2017. Application of Conjoint Analysis in Improving the Value of New Product Development: A Hotel Case Study Analysis. International Journal of Strategic Decision Sciences (IJSDS). 8(2). pp.11-30.
  • Homburg, C. and et.al., 2017. The contingent roles of R&D–sales versus R&D–marketing cooperation in new-product development of business-to-business firms. International Journal of Research in Marketing. 34(1). pp.212-230.
  • Kalish, D. and et.al., 2018. Integrating Sustainability into New Product Development: Available tools and frameworks can help companies ensure that sustainability is embedded as a fundamental building block of new product development. Research-Technology Management. 61(2). pp.37-46.
  • Kong, E. and Ko, S., 2018. An online team exercise for online students: learning for KM, creativity and innovation, team skills and resource management. Academic Conferences and Publishing International Limited.
  • Li, C. R., Li, C. X. and Lin, C. J., 2018. How and when team regulatory focus influences team innovation and member creativity. Personnel Review. 47(1). pp.95-117.
  • Li, X. and Yang, C., 2018. Extenics based Intelligent innovation and Creativity. on Creativity and Innovation 2018, p.413.
  • Reckwitz, A., 2018. The Creativity Dispositif and the Social Regimes of the New. In Innovation Society Today (pp. 127-145). Springer VS, Wiesbaden.
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