McDonald’s Takes on Starbucks Cason W. Kadie W. Jason W. Benny Y.

History of Starbuck’s Largest coffee house Founded in 1971 in Seattle, WA. 15,011 stores in 42 countries $7.76 billion revenue Took off when chairman Howard Schultz visited cafes in Italy “third place” 16th best company in the US to work for

History of McDonalds Founded by Ray Kroc April 15 1955 Des Plaines, IL Known for cheap and fast burgers with convenient drive-thru 31,000 locations worldwide 120 countries 54 million customers per day $21.58 billion revenue

Setting of Starbucks Place to hang out between work and home Added drive through and breakfast sandwiches Wi-Fi enabled Upscale atmosphere

Setting of McDonalds Drive-thru oriented Remodeling environment to be more fancy Coffee is being made in the counter unlike the other food Incorporating Wi-Fi Cushioned chairs and tables More friendly baristas

Why tap into the Starbucks business? Starbucks purchases 300 million pounds of coffee beans in 2006 Flattened carbonated drinks sales Increase consumption of coffee and iced tea beverages People are concerned about their health McDonalds estimates that their will be $1 billion in revenue Causes people to think they are more upscale

Why Now? Decrease traffic in Starbucks Starbucks blames the economy for decreased sales McDonalds' coffee is $0.60-0.80 cheaper than Starbucks

“McPlan” Testing in 2005 Interviewed Starbucks customers to find out what they have Decided to hire friendlier baristas to make the coffee, to be very knowledgeable and face the customer when making the drinks Have espressos on the counter

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