The Starbucks growth has been slow during last some periods yet it offers a tough competition to the McDonalds by offering extensive sale points. The two companies are in competition war yet the customer base of the two is totally different. The Starbucks customers are more affluent and the McDonalds customers are more price sensitive (Shaughnessy, 2013).
The company can work on the customer pool that lies between total affluent and totally price sensitive. The company, like it has done before in 2012, can float the videos of its hygienic processes on YouTube. It can show that McDonalds operates cleaner that the clean companies and that eating at McDonalds mean eating healthy and quality. Thus there should be deals and sitting areas designed for middle and rich class too so that a big customer base is not overlooked.
McDonald's play areas are a fun for the kids thus the families like to come to McDonalds than going at other restaurants. The company can improve its play areas by offering 3D motion experience in the toy areas so that it is an unforgettable experience for the kids and the family feels entertained too besides eating their favorite burger.
4. Assume that the U.S. economy is in a state of decline requiring modifications to the strategy. Evaluate how the strategy should be modified. Provide a justification of how this will help the company continue to compete in the marketplace.
The company's business directly depends on the buying power of the consumers. As the consumer gets more buying power or the income, he eats out more and the company revenues increase. In the face of supposed decline in the economy of the country, there will be fewer sales, less revenue and less income. To deal with that the company can take measures to compete by either dropping the prices of deals or by cutting its costs.
The company's growth rate is already lagging behind the Wall Street expectations (Choi, 2013). It can cut the costs by mainly decreasing the overhead expenses. There are overhead rent and labor charges that can be worked on. The company can assess...
Then it can evaluate if those costs can be avoided. If the company decreases the overhead cost by 50%, it will not need to decrease prices to generate income.
5. Evaluate how global competition may impact the business strategy and determine how the company should respond.
Only within U.S. The companies like KFC, Starbucks, Chipotle, Subway and many more are offering a tough competition to McDonalds (Brush, 2011). With local fast food businesses gaining momentum in Europe and Asia, the country might face a very tough global challenge. The Asian businesses are relatively run much cheaper thus they can beat the company in their areas. McDonalds thus needs to work much more on the local tastes as well as local production of food. It can own poultry farms in host countries to become more prices effective.
McDonalds has far more experience of operating internationally than many of other fast food companies like Starbucks and Subway. Thus it can adjust its strategy such that it offers food at competitive prices where the customer choses McDonalds due to its brand name and the experience that is much more than eating.
References
Brush, M., (2011), "McDonald's or Starbucks: Who wins?" Retrieved from:
http://money.msn.com/investment-advice/mcdonalds-or-starbucks-who-wins-brush
Choi, C., (2013), "McDonald's Profit Falls Short of Wall Street Expectations', Retrieved from:
http://www.huffingtonpost.com/2013/07/22/mcdonalds-profit-earnings_n_3634398.html?
Rowel, R., Moore, N.D., Nowrojee, S., Memiah, P., and Bronner, Y., (2005), "The utility of the Environmental scan for public health practice: lessons from an urban program to increase cancer screening," Journal of the National Medical Association. 97(4): 527 -- 534.
Shaughnessy, H., (2013), "How McDonald's Toppled Starbucks from the Social Top Spot,"
Retrieved from: http://www.forbes.com/sites/haydnshaughnessy/2013/02/21/how-mcdonalds-toppled-starbucks-from-the-social-top-spot/
