Mc Cafe
MGT 471 – McDonal’s/McCafe 1. Central problem/issue in case: ? Despite increasing sales, McDonald’s is losing market shares in Canada on the breakfast segments due to higher and higher competition. Also, it is not clear yet which products were successful and which ones weren’t. 2. Based on the initial results, Sgro believed that McCafe has resolved the losses in breakfast sales,. Do you agree? ? I don’t completely disagree with this statement but I think we have to balance it.
McCafe greatly contributed to increase McDonald’s breakfast sales but we cannot assure that the sales will keep increasing or even stay consistent due to higher competition and some lack of knowledge concerning the product line. 3. Other coffee retailers sell the same products that McCafe offers. Why would McCafe attract customers? ? Because it is faster due to extreme standardization, convenient, relatively and it also has a sophisticated/trendy design that might appeal to young customers. The popularity of McDonald’s can also be a factor of success. 4.
How will coffee retailers and fast-food competitors react to McCafe? While McDonald’s competitors will attempt to copy McCafe, how effective will they be? ? I think competitors will try to differentiate from McCafe and position themselves more as upscale or traditional alternatives. 5. What sort of organizational structure does McDonald’s have that has made the McCafe concept effective? ? The standardized organization of McDonald’s allowed them to provide good coffee at a really fast time compared to the competition and allowed them to hire workers not specialized in coffee retailing at all. . In terms of future initiatives, what strategies would you recommend to Sgro? ? I think they should open McCafe units (opposed to them operating at the same place as McDonald’s) like in some countries so they could cater to the people that don’t like McDonald’s more and be seen more as a traditional coffee shop where you can go in the morning or a place where you can hang out with your friends. 7. What do you learn from this case? ? Environmental scanning and competition analysis is crucial when you want to implement a new product or concept that’s already doing good in other countries.
