There is a very high degree of rivalry, but few exit barriers for the company; the expected loss of closing an existing McDonald's McCafe location would be absorbable into that location's receipts for the year.
3) McDonald's corporate strategy as it applies to McCafe in terms
(i) direction- McDonald's is aware of the markets in which it competes. McCafe was not simultaneously introduced in all markets, but introduced in markets where it seemed as if it could be competitive with local coffee suppliers.
(ii) composition- McDonald's only has quick-service restaurants in its stable, so that it can always employ the same combination of high value / low-cost in all business scenarios.
(iii)size- McDonald's is the world leader in quick service branding and seeking to expand, and it can use its existing locations to market its McCafe products, making it better prepared to do so than existing quick-service food providers and certainly better able to do so than new entrants to the marketplace.
4) McDonald's corporate strategy creates value by offering consistency in service, products, and value. Its main selling point is that a...
This has helped fuel growth because people who like the experience in one McDonalds are assured of this consistency when choosing another location.
5) it certainly seems like McDonald's current strategy is the best one it can have. It is the most recognized brand in the world and continues to grow. While it faces competition from other quick-service brands, none of them seem to pose a realistic threat to McDonald's industry dominance in the near future. Given its success to date, one would certainly be cautious about recommending any significant changes to its strategy.
6) if the McDonald's McCafe initiative hits a plateau, McDonalds could probably overcome that roadblock by leveraging its ability to be a price leader. The reality is that the McCafe set up does not allow McDonald's to offer the personalized barista service or environment of competitors like Starbucks or the local coffee bar. However, they can offer a good cup of customized coffee at a lower price than their competitors, which is strategy that McDonald's should employ to gain market share.
