Hair by hedongchenchen


									McDonalds vs. Starbucks
   Sylvia, Nick, Mark, Kristin
      Introducing…… Mc Café
• Starting in 14,000 U.S. locations
• Serving cappuccinos, lattes, mochas,
  smoothies, and the Frappe. All priced
  .60 to .80 cents cheaper than
               Mc Cafe
• These drinks will be either small,
  medium, or large without the
• Using Espresso machines displayed on
  the front counter.
  – Customers will see the beans being
    ground and baristas topping the drinks.
        So Why the Change…
• McDonald’s executives say that they aren’t
  launching specialty drinks to compete with
• They are instead trying to cater to
  customers growing interests in these
• Coffee and Iced tea are increasing and
  carbonated drinks are declining. So,
  McDonald’s didn’t want to miss out on the
  growing parts of the beverage business.
        So Why the Change...
• McDonalds implemented the Plan to
  Win strategy where they remodeled
  their stores with large chairs, flat
  screen televisions, and wireless
  internet access.
• With the Plan to Win Strategy
  McDonalds executives realized the
  potential for coffee sales in that
         So Why the Change…
• This will add $1 billion to McDonald's annual
  sales of $21.6 billion.
• Drinks are priced from $1.99 to $3.29 and
  come in vanilla, caramel and mocha flavors.
• Customers were buying food at McDonald's,
  then going to convenience stores to get
  bottled energy drinks, sports drinks and tea,
  as well as sodas by Coke competitors.
            So Why the Change
• Only about 800 of McDonald's U.S. restaurants have
  the specialty coffee drinks now, and some may not
  get the full beverage program until 2009.
• In 2006, McDonald's changed its drip coffee to a
  stronger blend and began marketing it as a
  "premium" roast.
• Starbucks responded that taste is subjective and its
  millions of customer visits per week demonstrated
  the popularity of its coffee.
So Why the Change…
      Starbucks seeing a threat?
• After downplaying threats from
  competition, Starbucks are now ready
  to compete with their rivals.
• Starbucks are beginning to see fast food
  chains as a threat.
• They have recently added a drive thru
  window, breakfast, and lunch
       Starbucks seeing a threat?
• Howard Schultz, Starbuck’s chairman, has said that
  the new competition will help Starbucks.
• By expanding the specialty coffee category, over time,
  customers will trade to Starbucks because they will be
  unsatisfied with the experience and the flavor.
• Howard Schultz wanted to create a comfortable
  atmosphere in Starbuck’s
• He wanted people to fall in love with the European
  environment like he did when he went to Italy into
  espresso bars
       Starbuck’s Declining

Even through the recent changes, Starbucks
stocks are still declining, as McDonalds are
Starbuck’s executives are attributing the
slowdown in sales to a weak economy.
  It Ain’t All Good For McDonalds
• This could slowdown the “fast food”
  aspect of McDonalds.
• Mc Café could push away customers who
  come for cheap food and quick delivery.
• Most McDonalds say that most of their
  customers do not even know what a
  “latte” is.
                 Reaction of the Public
•   “The idea that McDonalds will provide a high quality cup of coffee with their trans-
    fat menu items is a joke. I equate McDonalds coffee with truck stop coffee, which
    would be the last place I would go. Starbucks is and will continue to be the gold
    standard. McDonalds is just flushing money down the toilet, and they will realize it
    soon enough.”
•   “McDonald’s coffee is better. I got a iced coffee for half the price that was just as
    good or better. Plus, has anyone ever noticed that you have to wait 10 minutes
    every time you go to Starbucks. McDonald’s service has really improved just as I
    have seen Starbuck’s decline.”
•   Lets all hang out at McDonalds on plastic chairs with fry grease and burger
    condiments all over the table. Wow that sounds classy as the guy next to you stuffs
    a big Mac in his mouth.
•   “There was a blind taste test done last year by consumer reports that compared all
    of the “typical” coffee vendors such as Starbucks, Dunkin Donuts, Burger King,
    McDonald’s etc. Who do you think won the test? That’s right, McDonald’s!”

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