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

How can Starbucks react to the threat of McDonalds selling low price drinking chocolate - Essay ExampleI would be failing in my art if I dont thank any 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 bring on been supporting and helping me with this assignment. Table of Contents Contents Pages Executive Summary 4-5 Introduction 5 McDonalds Vs Starbucks 5-6 Problem for Starbucks 6 Sources of Information 6-7 SWOT abridgment 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 have made their presence felt in the businesses they operate in. Seattle based Starbucks was founded with the objective of providing Italian espresso bar experience in the united Sta tes. As a business strategy Starbucks operates by forming a personal relationship with its consumers. On the other hand McDonalds is a family restaurant and attracts people from all age groups. Strictly speaking, both these behemoths have distinct target markets. Starbucks attracts the affluent while customers who are price sensitive are McDonalds target market. McDonalds has rolled appear its low-priced coffee tree brand and in the process has started eating into the share of Starbucks. McDonalds appears well placed to become Starbucks biggest competitor in the disparateness coffee segment in the coming years. Starbucks now has to devise strategies to counter McDonalds move and not let its market share dip. The present melodic theme is a commentary on How can Starbucks react to the threat of McDonalds selling low cost coffee? To answer this question relevant information on both these companies has been collected from various primary and secondary sources. A comparison has been made on the business operations of both Starbucks and McDonalds, SWOT analysis has been carried out and finally a financial 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 liege customers who are willing to pay a premium price in exchange 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 huge set of loyal customer base and are well known for their quality products. Starbucks Vs McDonalds Starbucks is Italian-style coffeehouse chain based in Seattle, Wa shington. The company was founded in 1971 and has more than 17, 000 sell stores in 60 countries. Since inception Starbucks has believed in serving the best coffee to its customers. In fact, the company delivers much more than a simple cup of last 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