E-Commerce McDonald’sIntroduction:

Even today, some considerable time after the so called ‘dot com/Internet revolution’, electronic commerce (e-commerce) remains a relatively new, emerging and constantly changing area of business management and information technology. There has been and continues tobe much publicity and discussion about e-commerce. Library catalogues and shelves are filled with books and articles on the subject. However, there remains a sense of confusion, suspicion and misunderstanding surrounding the area, which has been exacerbated by the different contexts in which electronic commerce is used, coupled with the myriad related buzzwords and acronyms. This book aims to consolidate the major themes that have arisen from the new area of electronic commerce and to provide an understanding of its applicationand importance to management. In order to understand electronic commerce it is important to identify the different terms that are used, and to assess their origin and usage. According to the editor-in-chief of International Journal of Electronic Commerce, Vladimir Zwass, ‘Electronic commerce is sharing business information, maintaining business relationships and conducting business transactions by means of telecommunications networks’.1 He maintains that in its purest

form, electronic commerce has existed for over 40 years, originating from the electronic transmission of messages during the Berlin airliftin 1948.2 From this, electronic data interchange (EDI) was the next stage of e-commerce development. In the 1960s a cooperative effort between industry groups produced a first attempt at common electronic data formats. The formats, however, were only for purchasing, transportation and finance data, and were used primarily for intra-industry transactions. It was not until the late 1970s that work beganfor national Electronic Data Interchange (EDI) standards, which developed well into the early 1990s. EDI is the electronic transfer ofa standardized business transaction between a sender and receiver computer, over some kind of private network or value added network (VAN). Both sides would have to have the same application software andthe data would be exchanged in an extremely rigorous format. In sectors such as retail, automotive, defense and heavy manufacturing, EDI was developed to integrate information across larger parts of an organization’s value chain from design to maintenance so that manufacturers could share information with designers, maintenance and other partners and stakeholders. Before the widespread uptake and commercial use of the Internet, the EDI system was very expensive to run mainly because of the high cost of the private networks. Thus, uptake was limited largely to cash-rich multinational corporations using their financial strength to pressure and persuade (with subsidies) smaller suppliers to implement EDI systems, often at a veryhigh cost. By 1996 no more than 50,000 companies in Europe and 44,000 in the USA were using EDI, representing less than 1 per cent of the total number of companies in each of the respective continents. According to Zwass, electronic commerce has been re-defined by the dynamics of the Internet and traditional e-commerce is rapidly moving to the Internet.

About McDonald’s:

The McDonald's Corporation is the world's largest chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries across 35,000 outlets. Headquartered in the United States, the company began in 1940 as a barbecue restaurant operated byRichard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman RayKroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants. In 2012, McDonald's Corporation had annual revenues of $27.5 billion, andprofits of $5.5 billion. McDonald's primarily sells hamburgers, cheeseburgers, chicken, French fries, breakfast items, soft drinks, milkshakes, and desserts. In response to changing consumer tastes, thecompany has expanded its menu to include salads, fish, wraps, smoothies, fruit, and seasoned fries. The business began in 1940, witha restaurant opened by brothers Richard and Maurice McDonald at 1398 North E Street at West 14th Street in San Bernardino, California (at 34.1255°N 117.2946°W). Their introduction of the "Speedee Service System" in 1948 furthered the principles of the modern fast-food restaurant that the White Castle hamburger chain had already put into practice more than two decades earlier. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee". Speedee was eventually replaced with Ronald McDonald by 1967 when the company first filed a U.S. trademark on a clown shaped man having puffed out costume legs. McDonald's firstfiled for a U.S. trademark on the name "McDonald's" on May 4, 1961,

with the description "Drive-In Restaurant Services", which continues to be renewed through the end of December 2009. In the same year, on September 13, 1961, the company filed a logo trademark on an overlapping, double arched "M" symbol. The overlapping double arched "M" symbol logo was temporarily disfavored [clarification needed] by September 6, 1962, when a trademark was filed for a single arch, shaped over many of the early McDonald's restaurants in the early years. Although the "Golden Arches" appeared in various forms, the present form as a letter "M" did not appear until November 18, 1968, when the company applied for a U.S. trademark. The present corporationdates its founding to the opening of a franchised restaurant by Czech American businessman Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its worldwide expansion, and the company became listed on the public stock markets in 1965. Kroc was also noted for aggressive business practices, compelling the McDonald brothers to leave the fast food industry. The McDonald brothers and Kroc feuded over control of the business, as documented in both Kroc's autobiography and in the McDonald brothers' autobiography. The San Bernardino store was demolished in 1976 (or 1971, according to Juan Pollo) and the site was sold to the Juan Pollorestaurant chain. It now serves as headquarters for the Juan Pollo chain, as well as a McDonald's and Route 66 museum. With the expansionof McDonald's into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.

Category of E-Commerce:

1.Business to Business Ecommerce (B2B Ecommerce) in this type of ecommerce, both participants are businesses. As aresult, the volume and value of B2B ecommerce can be huge. An example of business to business ecommerce could be a manufacturerof gadgets sourcing components online.

2. Business to Consumer Ecommerce (B2C Ecommerce) When we hear the term ecommerce, most people think of B2C ecommerce. That is why a name like Amazon.com pops up in most discussions about ecommerce. Elimination of the need for physicalstores is the biggest rationale for business to consumer ecommerce. But the complexity and cost of logistics can be a barrier to B2C ecommerce growth.

3. Consumer to Business Ecommerce (C2B Ecommerce) On the face of it, C2B ecommerce seems lop-sided. But online commerce has empowered consumers to originate requirements that businesses fulfill. An example of this could be a job board wherea consumer places her requirements and multiple companies bid forwinning the project. Another example would be a consumer posting his requirements of a holiday package, and various tour operatorsmaking offers.

4. Consumer to Consumer Ecommerce (C2C Ecommerce) the moment you think of C2C ecommerce eBay.com comes to mind. That is because it is the most popular platform that enables consumers to sell to other consumers. Since eBay.com is a business, this form of ecommerce could also be called C2B2C ecommerce (consumer to business to consumer ecommerce). That is not all. Employees can be regarded as a special type of consumer. That would give rise to a new type of ecommerce: B2E (Business to Employee ecommerce).

Likewise if we consider Government to be separate entity, as alsoCitizens, we can come up with many more types of ecommerce: B2G (Business to Government), G2B (Government to Business), G2E (Government to Employee), G2G (Government to Government), G2C (Government to Citizen), C2G (Citizen to Government).

Types of Ecommerce Businesses Based on the Platformsetting up shop on Facebook is a fast-growing ecommerce segment so it has been awarded its very own bit of jargon: fcommerce. Likewise, mcommerce stands for mobile ecommerce.

Market Offerings of McDonald’s:

McDonald’s is one of the best known brands worldwide. This case study shows how McDonald’s aims to continually build its brand by listening

to its customers. It also identifies the various stages in the marketing process. Branding develops a personality for an organization, product or service. The brand image represents how consumers view the organization. Branding only works when an organization behaves and presents itself in a consistent way. Marketing communication methods, such as advertising and promotions, are used to create the colors, designs and images which give the brandits recognizable face. At McDonald’s this is represented by its familiar logo – the Golden Arches. In all its markets, McDonald’s faces competition from other businesses. Additionally, economic, legaland technological changes, social factors, the retail environment and many other elements affect McDonald’s success in the market. Marketinginvolves identifying customer needs and requirements and meeting theseneeds in a better way than competitors. In this way a company creates loyal customers. The starting point is to find out that potential customers are – not everyone will want what McDonald’s has to offer. The people McDonald’s identifies as likely customers are known as key audiences.The marketing mix and market research

Having identified its key audiences, a company has to ensure a marketing mix is created those appeals specifically to those people. The marketing mix is a term used to describe the four main marketing tools – the 4Ps.

By analyzing detailed information about their customers, as derived from ongoing market research, the McDonald’s marketing department can ascertain information key to determining the correct marketing mix.

1) Which products are well received

2) What prices consumers are willing to pay

3) What TV programmes, newspapers and advertising consumers read and view

4) which restaurants are visited

accurate research is essential in creating the right marketing mix which will help to win customer loyalty and increase sales. As the economy and social attitudes change, so do buying patterns. McDonald’s needs to identify whether the number of target customers isgrowing or shrinking and whether their buying habits will change in the future.

Market research considers everything that affects buying decisions. These buying decisions can often be affected by factors wider than just the product itself. Psychological factors are important, e.g. theimage a particular product conveys or how the consumer feels when purchasing it.

These psychological factors are of significant importance to the customer. They can be even more important than the products’ physical benefits. Through marketing, McDonald’s establishes a prominent position in the minds of customers. This is known as branding.

Meeting the needs of key audiences

There are a limited number of customers in the market. To build long-term business, it is essential to retain people once they have become customers. Customers are not all the same. Market research identifies different types of customers. For example:

Success Factors of McDonald’s:Of course, the big question is what makes McDonald’s such an incredible corporate success story? What’s behind the eightfold increase in the company’s share price from its 2003 low of $12? Here are thoughts:

1. Franchising

Worldwide, 80% of McDonald’s restaurants are franchised; in Australia,this proportion is two-thirds. Franchising enables McDonald’s to harness individual talent and effort, while still retaining control ofits brand, menu and pricing.

2. International expansion

McDonald’s is simply huge in the US, but it also has a presence in 118other countries. In Australia, McDonald’s has been an established brand for 41 years and is as much a part of our suburbs and shopping strips as well-known brands such as Woolworths Limited (ASX: WOW) and Commonwealth Bank of Australia (ASX: CBA).

3. Global, but local

While McDonald’s is a multi-national giant, it adapts its business andmenu to suit local markets. This ‘global, but local’ approach enables it to tailor its offerings to suit the local palate. For example, in some countries, McDonald’s sells beer and, in India, where Hindus don’t eat beef, McDonald’s menus have vegetarian and non-beef options.Australia was the birthplace of the McCafe concept and, perhaps not surprisingly, the McOz burger.

4. The brand is the business

The McDonald’s brand is one of the most valuable in the world, being easily and universally recognized. Everywhere you go, McDonald’s restaurants have an instant ‘recognize ability factor’ — the familiar red-and-gold livery, plus the ‘Golden Arches’ and the world’s favorites clown, Ronald McDonald.

5. ‘Old and new’ menu

The McDonald’s menu sticks rigidly to old-fashioned favorites such as the Big Mac and Chicken McNuggets. However, the group is also willing to experiment, adding or deleting items from its menu according to their popularity and local tastes. For example, its new healthier menus and inexpensive all-day coffee have helped the business snare a whole new group of customers.

6. Low prices

Gourmets will sneer at McDonald’s menu, arguing that its products are low on taste and high on fat and sugar. Nevertheless, its low prices bring tens of millions of people through its doors every day.

7. Meal sizes

As well as catering to all budgets, McDonald’s menu offers meals of all shapes and sizes. While its ‘super sized’ range has been blasted by anti-obesity campaigners, McDonald’s also offers bite-sized meals for those with smaller appetites.

8. Film tie-ups and sponsorship

To keep its regular promotions fresh, McDonald’s teams up with media partners, especially film companies. When the likes of Disney (NYSE: DIS) or DreamWorks (NASDAQ: DWA) release a new movie, you’re almost certain to see the theme in your local McDonald’s.

9. Recruiting young workers

Millions of young adults got their first job with McDonald’s. While this helps to keep wage bills down, McDonald’s also provides industry-leading, on-the-job training for young workers. Last year, the companyranked eighth on a list of the ’25 Best Multinational Companies to Work for in the World’. Most senior McDonald’s managers started out serving on the shop floor and worked their way up to the boardroom.

10. Free Wi-Fi

The vast majority of Australian McDonald’s stores now offer free Wi-Fi. It’s not unusual to see people using laptops or tablet computers while eating or having coffee. McDonald’s now boasts that it serves upmore emails each day (data-wise, the equivalent of six million messages) than it does big Macs.

Foolish take-awayMcDonald’s isn’t everyone’s restaurant of choice – although the company continues to work hard to change that – but it’s hard to arguewith the level of success it has achieved. By building a truly valuable brand and making sure the company delivers on consumer expectations, McDonald’s has risen to the top of its industry, and continues to strive for greater success.

E-Commerce Architectures:

Access Control and Security E-commerce processes must establish mutual trust and secure access between parties

User names and passwords

Encryption key

Digital certificates and signatures

Restricted access areas

Other people’s accounts

Restricted company data

Webmaster administration areas

Profiling and Personalizing Profiling gathers data on you and your website behavior and choices

User registration

Cookie files and tracking software

User feedback

Profiling is used for

Personalized (one-to-one) marketing

Authenticating identity

Customer relationship management

Marketing planning

Website management

Search Management Search processes help customers find thespecific product or service they want

E-commerce software packages often include a website search engine

A customized search engine may be acquired from companies like Google or Requisite Technology

Searches are often on content or by parameters

Content and Catalog Management Content Management Software

Helps develop, generate, deliver, update, and archive text and multimedia information at e-commerce websites

Catalog Management Software

Helps generate and manage catalog content

Catalog and content management softwareworks with profiling tools to personalize content

Includes product configuration and mass customization

Workflow Management E-business and e-commerce workflow management depends on a workflow software engine

Contains software model of business processes

Workflow models express predefined

Sets of business rules

Roles of stakeholders

Authorization requirements

Routing alternative

Databases used

Task sequences

Event Notification Most e-commerce applications are event driven

Responds to such things as customer’s first website visit and payments

Monitors all e-commerce processes

Records all relevant events, including problem situations

Notifies all involved stakeholders

Works in conjunction with user-profiling software

Electronic Payment Processes Complex processes

Near-anonymous and electronic nature of transactions

Many security issues

Wide variety of debit and credit alternatives

Financial institutions may be part of the process

Web Payment Processes

Shopping cart process

Credit card payment process

Debit and other more complex processes

Electronic Funds Transfer (EFT)

Major payment system in banking, retail

Variety of information technologies capture and process money and credit card transfers

Most point-of-sale terminals in retail stores are networked to bank EFT systems

Securing Electronic Payments Network sniffers easily recognize creditcard formats

Encrypt data between customer and merchant

Encrypt data between customer and financial institution

Take sensitive information off-line

Conclusion:McDonald’s is the largest fast food restaurant chain that serves approximately 47 million customers daily. The fast food restaurant is operated by many types of business venture like franchisee, affiliate or the corporation itself. Through continual innovation & technology research and upgrade, McDonald’s have transformed itself from a small bar-b-que restaurant to a fast food restaurant chain serving mainly burgers, chicken products, fries, beverages, desserts, salads, wraps and fruits for breakfast, lunch, dinner and even supper – 24 hours a day, 7 days a week. In this assignment, we discussed on how McDonald’s manages its innovation & technology and the strategies employed by McDonald’s in gaining its competitive advantage.