How can Starbucks react to the threat of McDonalds selling low cost Essay

How can Starbucks react to the threat of McDonalds selling low cost java - Essay ExampleI would be failing in my duty if I dont convey all those employees of Starbucks and McDonalds who responded to the phone calls and e-mails sent to these organizations. Last but not the least, I would like to thank all my friends who take a crap been supporting and helping me with this assignment. Table of Contents Contents Pages executive Summary 4-5 unveiling 5 McDonalds Vs Starbucks 5-6 Problem for Starbucks 6 Sources of Information 6-7 SWOT Analysis 7-8 Financial Analysis 8-9 Findings 10 Recommendations 10-11 Appendices 12-25 Works Cited 26 How Can Starbucks React to the Threat of McDonalds Selling Low Cost Coffee? Executive Summary Starbucks and McDonalds are big multinational companies that ache make their presence felt in the crinklees they make for in. Seattle based Starbucks was founded with the objective of providing Italian espresso bar experience in the United States. As a busine ss strategy Starbucks operates by forming a personal relationship with its consumers. On the other hand McDonalds is a family eatery and attracts people from all age groups. Strictly speaking, both these behemoths have distinct target markets. Starbucks attracts the affluent composition customers who are price sensitive are McDonalds target market. McDonalds has rolled out its low-cost coffee brand and in the process has started eating into the share of Starbucks. McDonalds appears well placed to become Starbucks biggest enemy in the specialty coffee segment in the coming years. Starbucks now has to devise strategies to counter McDonalds roleplay and not let its market share dip. The present paper is a comment on How can Starbucks react to the threat of McDonalds selling low cost coffee? To answer this question applicable information on both these companies has been collected from various primary and secondary sources. A comparison has been made on the business operations of bo th Starbucks and McDonalds, SWOT analysis has been carried out and finally a monetary comparison has been made. Some alternatives that can be adopted by Starbucks to react to McDonalds move have been suggested based on aforesaid analysis. I personally feel that Starbucks should not respond to McDonalds move with a price cut, rather it should elevate the quality perception in the minds of the customer and build a set of loyal customers who are willing to pay a premium price in sub of getting the coffee experience that Starbucks has to offer. Introduction I have decided to write a commentary on How can Starbucks react to the threat of McDonalds selling low cost coffee? I have chosen this topic since it involves two big U.S. based companies who have worldwide operations, have a immense set of loyal customer base and are well known for their quality products. Starbucks Vs McDonalds Starbucks is Italian-style cafe chain based in Seattle, Washington. The company was founded in 1971 and has more than 17, 000 retail stores in 60 countries. Since source Starbucks has believed in serving the best coffee to its customers. In fact, the company delivers much more than a easy cup of high quality coffee it ensures a wonderful experience for the customer. A look at the product portfolio of Starbucks clearly indicates that the company has a huge variety of coffee