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While I agree that the ice cream/milkshakes has been problematic for McDonald's from an operational standpoint, I think your business analysis is pretty terribl

by dangus 2y ago

While I agree that the ice cream/milkshakes has been problematic for McDonald's from an operational standpoint, I think your business analysis is pretty terrible. If anything, ice cream products represent a very profitable item that often serves as an upsell helping drive the APV (average purchase value) higher. Milkshakes in particular have a unique "job to be done" in the drive-thru fast food industry: https://hbswk.hbs.edu/item/clay-christensens-milkshake-marketing https://hbswk.hbs.edu/item/clay-christensens-milkshake-marke... They can be eaten easily in the car, can be savored slowly over time on a long commute, and are relatively filling and inexpensive. There are a lot of people who actually consume them earlier in the day before work because of those characteristics. You'll notice that basically every burger chain offers milkshakes, and some even emphasize the shakes more than the food, like Shake Shack, Dairy Queen (which has quite good fast food burgers and food if you aren't aware), and Steak 'n Shake. They all do this because it's an extremely profitable product and a driver of high APV. The ice cream machines at McDonald's also deliver multiple products: McFlurry, hot fudge sundae, milkshakes, and ice cream cones. One small machine that dispenses vanilla soft serve can make a whole bunch of products.

wokwokwok 2y ago
While some of that might be true, explain to me why an organisation like macdonalds would allow up to 30% of such machinery to be out of working order for years and years in high value areas. Your analysis posits what, that they’re just blatantly incompetent? I don’t believe that. If the economics of a working ice cream machine were that good, it would be a solved problem. You don’t run an organisation like MacDonalds with a basic inability to maintain infrastructure. Imagine if that was true of fryers? Or microwaves? That almost never happens. It’s clearly not a technical problem. The only way that you could justify the continued maintenance failure you see is if the benefits of a working machine were negligible at best. Perhaps what you say might be true in general but in this specific circumstance I think you’re applying an “in general…” kind of logic (like “in general more unit tests are better…”) which doesn’t ring true here, to me.
- dangus 2y ago
  I think it's actually telling that so many of them are broken but the product hasn't been discontinued. It tells you that it's not really a burdensome product to have on the menu. Dump the liquid in the machine, turn it on, empty and clean the machine at close. There's almost nothing else in the store that is so low-effort. I'm not saying that the high rate of failure isn't a problem or lost revenue. I also have a hunch that the problem disproportionately affects specific franchise owners who benefit from the product less than others.

by dangus 2y ago

wokwokwok 2y ago

While some of that might be true, explain to me why an organisation like macdonalds would allow up to 30% of such machinery to be out of working order for years and years in high value areas. Your analysis posits what, that they’re just blatantly incompetent? I don’t believe that. If the economics of a working ice cream machine were that good, it would be a solved problem. You don’t run an organisation like MacDonalds with a basic inability to maintain infrastructure. Imagine if that was true of fryers? Or microwaves? That almost never happens. It’s clearly not a technical problem. The only way that you could justify the continued maintenance failure you see is if the benefits of a working machine were negligible at best. Perhaps what you say might be true in general but in this specific circumstance I think you’re applying an “in general…” kind of logic (like “in general more unit tests are better…”) which doesn’t ring true here, to me.

dangus 2y ago
I think it's actually telling that so many of them are broken but the product hasn't been discontinued. It tells you that it's not really a burdensome product to have on the menu. Dump the liquid in the machine, turn it on, empty and clean the machine at close. There's almost nothing else in the store that is so low-effort. I'm not saying that the high rate of failure isn't a problem or lost revenue. I also have a hunch that the problem disproportionately affects specific franchise owners who benefit from the product less than others.