Case Analysis 1

Running Head: STRATEGIC ANALYSIS

Case Analysis of McDonalds McCafe Coffee Iniiai!e
Case Analysis "
In#oducion
McDonaldss is a $a%&u#ge# #esau#an $a offe#s di!e#se %enu and 'uic( se#!ices in
1"1 coun#ies ac#oss $e )o#ld* McDonalds $as e+,e#ienced #a,id g#o)$- ,a#ly a#i&ua&le o
$e successful ad ,#o%oions and inno!aions in is %enu* T$e sales of $e co%,any )e#e
inc#easing &u- %a#(e s$a#e $ad declined .A&ou McDonaldss- "/1"0* McDonaldss in#oduced
McCafe conce, in "//1 o #egain do%inance in &#ea(fas and snac( i%e sales and #e&uild
co%,eii!e ad!anage* In $is case analysis- &usiness le!el s#aegy- 1o#e#s fi!e fo#ce %odel o
analy2e $e ne) !enu#e ,osiion in co%,eii!e indus#y- co#,o#ae s#aegies of McDonalds and
is i%,o#ance o c#eae !alue )ill &e e+,lained* Along )i$ $is- 3usificaion of cu##en
co#,o#ae s#aegy and suggesions o o!e#co%e $e ,oenial &a##ie#s )ill &e discussed in $is
case analysis*
4usiness le!el s#aegy of McDonalds
4usiness le!el s#aegy is an ineg#aed 5 coo#dinaed se of co%%i%ens and acions*
McDonalds uses &usiness le!el s#aegy o gain co%,eii!e ad!anages &y e+,lo#ing co#e
co%,eencies in $e s,ecific ,#oduc %a#(es* In odays co#,o#ae &usiness scena#io- $e#e a#e
se!e#al (inds of &usiness le!el s#aegies used &y $e &usiness fi#% o gain $e co%,eii!e
ad!anages* Cos leade#s$i,- Diffe#eniaion- focused cos leade#s$i,6 focused leade#s$i, and
ineg#aed cos leade#s$i,7diffe#eniaion a#e $e %a3o# &usiness le!el s#aegies .8(u%us-
Alinay 5 C$a$o$- "/1/0*
McDonalds use diffe#eniaion and cos leade#s$i, s#aegy o inc#ease $e %a#(e s$a#e and
o gain $e co%,eii!e ad!anages .MCD8NALDS AND THE MCCA9: C899EE
INITIATI;E- "//"0* T$e ,#oduc and se#!ice offe#ed &y McDonalds is diffe#en- $ig$ly
Case Analysis <
sanda#di2ed- su,e#io# 'ualiy and less cosly as co%,a#ed )i$ is co%,eio#s* =i$ $e $el, of
$is- McDonalds is saisfying $e needs 5 )ans of consu%e# and ,#o!iding $ig$ cuso%e#
se#!ice in $e ine#naional %a#(e .1#off- "//"0* 8n $e o$e# $and- McDonalds is also ,#o!iding
$e ,#oduc and se#!ice a a !e#y lo) cos as co%,a#e )i$ is %a3o# co%,eio#s suc$ as:
=endys- >9C ,i22a $u and &u#ge# (ing* Hence- McDonalds is using ineg#aed cos
leade#s$i,7diffe#eniaion s#aegy o gain $e co%,eii!e ad!anages* I %eans- McDonalds is
,#o!iding diffe#eniae 5 $ig$ly sanda#di2ed ,#oduc a a !e#y lo) cos as co%,a#e )i$ is
co%,eiions*
T$e s#aegies of cos leade#s$i, and diffe#eniaion a#e used ine#c$angea&ly )i$ in $e
ine#nali2aion a,,#oac$ of McDonalds* In addiion- McDonalds s$ould also follo) focused cos
leade#s$i, s#aegy along )i$ $e diffe#eniaion and cos s#aegy o c#eae $e co%,eii!e
sco,e- &ecause McDonalds can easily access $e c$anged en!i#on%en* So- McDonalds can use
diffe#en &usiness le!el s#aegy o c#eae $e co%,eii!e sco,e .>eillo# 5 Hul- "//?0*
Co%,eii!e Analysis of Mc@Cafe
In $e Resau#an indus#y- Coffee CafA is a $ig$ly co%,eii!e indus#y in $e &usiness
a#eas* T$e#e a#e %any s%all Coffee CafA &usinesses in $e indus#y $a fig$ )i$ eac$ o$e# o
i%,#o!e $ei# cuso%e# &ase and i%,#o!e ,#ofia&iliy* T$in( Coffee- Snice- 4 Cu, CafA and
Go#illa Coffee a#e $e %a3o# co%,eio#s in $is indus#y* I is !e#y difficul o de!elo, a disinc
&#and na%e in $is indus#y .1ines- "//B0* Resea#c$ 5 de!elo,%en cos affecs $e o#gani2aion
,oenialiy in $e #esau#an indus#y* La#ge esa&lis$ed co%,anies )i$ s#ong &#and ideniies
suc$ as Mc@CafA@Cafes do %a(e i %o#e difficul o ene# and succeed )i$in $e %a#(e,lace6
ne) en#ans find $a $ey a#e faced )i$ ,#ice co%,eiion f#o% e+ising c$ain #esau#ans*
T$e#e a#e se!e#al su&siues in $is indus#y .MCD8NALDS AND THE MCCA9: C899EE
Case Analysis ?
INITIATI;E- "//"0* T$e#e a#e a lo of ,#oducs $a cuso%e# can c$oose suc$ as: 4e!e#ages
and dai#y ,#oducs* In $is #esau#an indus#y- su,,lie# ,o)e# )ould &e #elai!ely s%all* Along
)i$ $is- s#eng$ of &uye#s is #elai!ely lo) in $is indus#y .Ha+ 5 =ilde- "//10*
McDonaldss co#,o#ae s#aegy
McDonaldss cu##en co#,o#ae s#aegies a#e diffe#en and &ased on s,ecialy coffee and
McCafe* Cnde# co#,o#ae s#aegy- McDonaldss decide di#ecion- co%,osiion and si2e of a#ge
%a#(e fo# McCafe*
Direction: In o#de# o co%,ee )i$ Sa#&uc(s- McDonalds $as de!elo,ed a ,lan o
launc$ McCafe $a ,#o!ides coffee- coo(ies and ,as#ies* Along )i$ $is- i #esol!es $e issue of
dec#easing %a#(e s$a#e in fas food indus#y*
Composition: In co%,osiion of %a#(eing %i+ of McCafe- McDonalds $as de!elo,ed
,#oduc line- ,#icing s#aegies and dis#i&uion s#aegies acco#ding o co%,eiion and
#e'ui#e%ens of cuso%e#s .Cole%an- Gao 5 >i%- "//D0* Addiionally- co%,any ,lans effeci!e
,#o%oional ec$ni'ues and ools o ,#o%oe $e ,#oducs of McCafe* In i%,le%enaion ea%-
en#e,#eneu#ial and e+,e#ienced co#,o#ae e%,loyees )i$ di!e#se &ac(g#ounds a#e included o
ensu#e $e success of $is ,lan*
Size: Cnde# si2e- a#ge %a#(e of McCafe ,#oducs is idenified* T$e %ain cuso%e#s of
McCafe )ill &e %osly cu##en cuso%e#s of McDonaldss* Co%,any is #ying o ene# in lu+u#y
%a#(e of coffee*
McDonaldss Co#,o#ae S#aegy ;alue C#eaion
McDonalds co#,o#ae s#aegies a#e &ased on ,#oduc diffe#eniaion and inno!aion $a
is $el,ful o c#eae !alue fo# $e cuso%e#s and o$e# sa(e$olde#s* T$e inno!ai!e and ne)
&#ands #e,#esened !alue and fas se#!ice .G#in&la 5 Ti%an- "//<0* In $e fas food indus#y-
Case Analysis E
$e#e is no co%,eio#- )$o )as a&le o %ac$ $e &#and e'uiy associaed )i$ McDonalds
Ha,,y Meal* Along )i$ $is- unde# co#,o#ae s#aegies- co%,any launc$ed !alue ca%,aign $a
,#o%oes $e !alue of $e ,#oducs o $e cuso%e#s* In coffee %a#(e- #elia&iliy- 'ualiy and
se#!ice a#e $el,ful o c#eae !alue and $ese a#e ,#o!ided $#oug$ co#,o#ae s#aegy of
McDonalds*
9aco#s of McDonalds G#o)$
T$e#e a#e !a#ious faco#s $a su,,o# $e g#o)$ of McDonaldss and is &usiness
e+,ansion* T$ese a#e as follo):
Quality and Innovative Products: McDonalds offe#s 'ualiy ,#oducs a $ei# so#es $a
c#eae a ,osii!e &#and i%age in $e %a#(e* McDonalds #esau#ans focus on 'ualiy- s,eed and
accu#acy of se#!ices* Is coffee $ouses also ,#oduce consisen 'ualiy ,#oducs a diffe#en
%e$ods .T$o%,son- "//10* Along )i$ $is- co%,any ,#oduces ,#oducs in inno!ai!e %anne#
$a a#acs cuso%e#s o)a#ds $e co%,any and inc#eases sales and g#o)$*
Quick Services: McDonalds ,#o!ides se#!ices a lo) ,#ices- good 'ualiy- safe food and
fas se#!ices* In $e 'uic( se#!ice indus#y- McDonalds is $e leade# )i$ $ig$es %a#(e s$a#e
$a su,,o#s $e g#o)$ of $e o#gani2aion in o$e# ne) &usiness a#eas .G#in&la 5 Ti%an-
"//<0* McCafe offe#s s,ecial coffee con!enienly- 'uic(ly and a lo) ,#ices*
Positive Brand Image: Co%,any ,#o!ides 'ualiy ,#oducs a lo) ,#ices and acco#ding o
$e ases of cuso%e#s 'uic(ly $a &uilds ,osii!e &#and i%age in $e %inds of cuso%e#s* T$is
,osii!e &#and i%age $el,s fo# o#gani2aional g#o)$*
Fusificaion fo# cu##en co#,o#ae s#aegy
McDonaldss cu##en co#,o#ae s#aegy is no $e &es one* Co%,anys co#,o#ae s#aegy
is &ased on o,en %o#e so#es o inc#ease $e sales and fo# $is- co%,any gi!es f#anc$isee of is
Case Analysis B
&#and* 9#anc$isees ,aid a %on$ly #en and se#!ice fee o McDonalds &ased on a ,e#cenage of
o,@line sales .Ha&e#&e#g 5 Rie,le- "//G0* I is #e'ui#ed fo# $e f#anc$isees o %ac$ $e
co#,o#ae sanda#ds of 'ualiy and #es,onsi&iliy o #e,#esen $e co%,any in co%%uniy in good
%anne#* So%ei%es- i is difficul fo# $e co%,any o %ainain 'ualiy- 'uic( se#!ices and is
&#and i%age $#oug$ f#anc$isees* So- co%,any s$ould de!elo, &usiness inelligence s#aegy $a
is &ased on ,lan o )in including ,lace- ,eo,le- ,#oducs and ,#o%oions .Nigel- "//D0*
Co%,any s$ould de!elo, sanda#d 'uesions and %easu#es o idenify $e cuso%e# e+,e#ience
f#o% an ine#nal ,e#s,eci!e* T$e co%,any s$ould also include a oll f#ee line o# feed&ac( fo#%
o a(e $e #es,onse and co%%ens of cuso%e#s #ega#ding $e ,#oducs 'ualiy and se#!ices*
Reco%%endaions o %ainain g#o)$
If McDonaldss McCafe iniiai!e $i a ,laeau in e#%s of g#o)$- $en co%,any s$ould
a(e so%e se,s o %ainain $is g#o)$ and success and o!e#co%e on &a##ie#s* T$ese se,s o#
#eco%%endaions a#e as follo):
Product Innovation: In o#de# o %ainain g#o)$ and success- co%,any s$ould c#eae
so%e inno!aions in is cu##en ,#oduc line* Inno!ai!e ,#oducs and offe#s a#e $el,ful o a#ac
ne) cuso%e#s and #eain e+ising cuso%e#s .Hi- I#eland 5 Hos(isson- "/1/0* Along )i$ $is-
co%,any s$ould c#eae inno!aion o# c$anges in ,#oduc line acco#ding o $e #e'ui#e%ens of
cuso%e#s o# any loo,$oles in e+ising ,#oduc line*
Changes in marketing mix strategies: Co%,any s$ould c#eae so%e c$anges in cu##en
%a#(eing %i+ s#aegies o o!e#co%e on o&sacles o# &a##ie#s and ado, ne) %a#(eing %i+ o
co%,ee )i$ co%,eio#s and inc#ease is %a#(e s$a#e .Ha&e#&e#g 5 Rie,le- "//G0* Co%,any
s$ould use ne) ,#oduc %i+- ,#ice %i+- ,lace %i+ and ,#o%oion %i+ o o!e#co%e on &a##ie#s
and %ainain g#o)$ of $e co%,any*
Case Analysis H
Quality and quick services: McDonaldss McCafe s$ould ,#o!ide 'ualiy and
sanda#di2ed ,#oducs* Along )i$ $is- co%,any s$ould e%,loy )ell #ained and educaed
,eo,le o deli!e# se#!ices o $e cuso%e#s 'uic(ly and ,leasanly .Ha&e#&e#g 5 Rie,le- "//G0*
Su%%a#y
8n $e &asis of a&o!e discussion- i can &e included $a McDonaldss use diffe#eniaion
and cos leade#s$i, s#aegies o inc#ease %a#(e s$a#e and gain co%,eii!e ad!anage o!e# $e
co%,eio#s* I is idenified $a McCafe faces oug$ co%,eiion f#o% o$e# co%,eio#s and
su&siue ,#oducs li(e &e!e#age- dai#y ,#oducs ec* Along )i$ $is- i is found $a
McDonaldss de!elo, co#,o#ae le!el s#aegies o di#ec- co%,ose and a#ge %a#(e fo#
launc$ing of McCafe* McDonaldss ,#oducs ,#o!ide !alue o cuso%e#s in e#%s of 'ualiy-
'uic( se#!ices and inno!aion* A,a# f#o% $is- if McCafe is failed o ac$ie!e is e+,eced
g#o)$ and success- $en co%,any s$ould i%,le%en inno!aion- suia&le %a#(eing %i+ and
sanda#d o %ainain $is success and o!e#co%e on &a##ie#s*
Case Analysis G
1.
Refe#ences
A&ou McDonaldss ."/1"0* Re#ie!ed Fanua#y <1- "/1" f#o%:
$,:77)))*McDonalds*co%7us7en7$o%e*$%l
Cole%an- D*- Gao- C* 5 >i%- H* ."//D0* McDonaldss: 4#eac$ing $e Lu+u#y Coffee Ma#(e*
Re#ie!ed Fanua#y <1- "/1" f#o%:
$,:77)))*%cafee*cc7Classes74EM1/B71a,e#s7"//D7McDonalds*,df
G#in&la- M* 5 Ti%an- S* ."//<0* in !kts " Corporate Strategy #$* Ne) Yo#(: McG#a)@Hill
Educaion*
Ha&e#&e#g- A* 5 Rie,le- A* ."//G0* Strategic !anagement: %heory and &pplication* C>: 8+fo#d
Cni!e#siy 1#ess*
Ha+- A* 5 =ilde- D* ."//10* T$e Dela Model I disco!e#ing ne) sou#ces of ,#ofia&iliy in a
ne)o#(ed econo%y* $uropean !anagement 'ournal- ().?0- <HD@<D1*
Hi- M* A*- I#eland- R* D* 5 Hos(isson- R* E* ."/1/0* Strategic !anagement: Competitiveness
" *lo+alization, Concepts* CSA: Cengage Lea#ning*
>eillo#- 4* D*- Hul- G* T* M* ."//?0* 1#edico#s of fi#%@le!el ,oliical &e$a!io# in $e glo&al
&usiness en!i#on%en: an in!esigaion of s,ecific aci!iies e%,loyed &y CS fi#%s*
International Business -evie.- (/.<0- </D@<"D*
MCD8NALDS AND THE MCCA9: C899EE INITIATI;E* ."//"0* I!ey Manage%en
Se#!ices- 1@1"*
Nigel- S* ."//D0* 8,e#aions S#aegy* Sou$ Af#ica: 1ea#son Educaion Inc*
8(u%us- 9*- Alinay- L*- 5 C$a$o$- 1* ."/1/0* 4usiness@Le!el S#aegies* Strategic
!anagement 0or 1ospitality and %ourism- D1@1/G*
Case Analysis D
1ines- F* M* ."//B0* T$e econo%ic #ole of $e e%e#gency de,a#%en in $e $eal$ ca#e
coninuu%: A,,lying Mic$ael 1o#e#s fi!e fo#ces %odel o e%e#gency %edicine* %he
'ournal o0 $mergency !edicine- /2.?0- ??H@?E<*
1#off- H* ."//"0* 4usiness uni s#aegies &e)een #egionalisaion and glo&ali2aion*
International Business -evie.- ((."0- "<1@"E/*
T$o%,son- F* L* ."//10* 3nderstanding corporate strategy Course I4% Series* CSA: Cengage
Lea#ning EMEA*