mc donalds owners eye starbucks with
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MGM221PRESENTATION
Cover page needed to be edited Someone please think of a good
Cover page! I am not too good at this^^
ABOUT THIS ARTICLE&
ABOUT MCDONALD’S
McDonald’s company background
• franchise company • founder Ray Kroc • >30,000 local restaurants • serves 52 million people in over 100 countries• >70% restaurants owned & operated by local peo
ple
Julia
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julia
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• Popular food: French Fries, Big Mac, Chicken McNuggets
• competitors: fast food stores --> Burger King (food), Starbucks (Beverages)
• customers: mainly families with children --> more young adult customers
• will add other beverages next year
McDonald's owners eye Starbucks with McCafe drinks
• McDonald’s offers McCafe espressos and cappucinos at 14,000 US locations
• McCafe’s coffee drinks cost less than StarBucks, from $2.39 for a small to $3.29 for a large
• McDonald’s first gained revenue from offering coffe in the breakfast menu
• “Beverages have higher margin than food” • Offers Lower price “affordable luxury”
McDonald’s strategy to gain market share from Starbucks
• Next annual sales: $1 billon
• Continue improve their coffee bean quality to compete with StarBucks
• Advantage by offering food and coffee while StarBucks only has muffins and coffee
• Draw attention to price sensitive customers
• US economy downturns
improved furniture and free Internet service• Attract people to come and sit in McDonald’s as they do in Starbucks
Jenny will explain what’s this commercial..
McCafe and the Investors-Christine and Judy
• Hefty return on sales– Expecting additional $1 billion to annual sales – Expect more money retained within the
company or give out dividends – Increase operating expenses
What can investors expect?
• Higher revenues• Strong market advantage in new coffee market• Higher share prices• Increase in sales• Greater return on investments > McDonald’s raised dividends 33%• Continuous growth with second beverage wave
McCafe – The Store
What is a McCafe store?
• Starbuck’s-like coffee shop
Different kind of drinks McCafe offers
Frappes
Iced latte Iced mocha
smoothie Bottled water
tea
Macchiato Flat white espresso
cappuccino
Long black
Iced coffee
vienna
Hot chocolate
Spring 2001: first McCafe opening in US
> Test run in downtown Chicago
How will investors be affected?
• New source of growth >New restaurants reaching point of diminished returns
• Commercial (?)
• Increase in revenues
McCafe and the economy
• New Bailout Plan