McDonald’s and the McCafe Coffee Initiative Essay

Looking at McDonalds Canada from a resource-based view (please furbish up to the appendix), I believe that McCaf result succeed in Canada. McDonalds has a plethora of valuable resources in its disposal. Among them, arguably the most important is reproach equity. The Golden Arches are instantly recognizable to just about everyone in the planet, and that level of brand awareness get out play a over coat-mouthed part in McCafs entry to Canada. Furthermore, McDonalds, cosmos a major(ip) player in the fast-food industry in Canada, has a considerable join of currency and infrastructure.This ensures that McDonalds will contain the means to commercialise and dole out McCafs products respectively. Another valuable resource that McDonalds has access to is its prominent network of competent franchisees. A large percentage of the McCafs in Canada will be add-ons to currently lively McDonalds restaurants. Therefore, McDonalds idler be assured that the management of the McCaf initia tive in the individual restaurants will meet the high samples that the corporation already imposes on their franchisees.Finally, McDonalds already has a solid reputation in Canada for their fast-food service. A sound merchandise strategy can do transfer this positive reputation to the McCaf brand. McDonalds faces stiff competition from several firms in the Canadian retail hot chocolate bean tree industry. However, the McCaf concept will carve out a unique militant advantage for McDonalds, setting it apart from its competitors. McCaf combines the speedy service of Tim Hortons with the contented atmosphere and sophisticated image of Starbucks. McDonalds blends the best of both worlds and has the authority to take commercialise share from both types of competitors. It will be in a different league all by itself.The major factor detracting from McCafs success is McDonalds poor reputation for drinking chocolate in Canada, as seen in the SWOT analysis (please refer to theappend ix). It is important to air that despite McDonalds poor reputation for drinking chocolate, the chocolate itself is made from aid ingredients (100% pure Arabica beans). For McDonalds to succeed with the McCaf initiative, reversing this negative image is absolutely crucial. Furthermore, coffee is a staple in modern Canadian breakfasts, so having a strong brand of coffee on the menu can help revitalize McDonalds breakfast sales.McDonalds poor reputation for coffee can very closely be the reason for its recent divergence of market share in the breakfast industry. Thankfully, the market for retail coffee in Canada is experiencing significant growth, so if McCaf becomes popular, it can comprise a muscular contribution to the friendships profits. McDonalds must find a way to change the negative image of its coffee by exploitation the resources available to the firm. In order to change the negative perception of its coffee in Canada, I recommend that McDonalds give away unbosom s amples of the coffee for a limited time. Although McDonalds will initially make no revenue from the coffee, it will give Canadian coffee consumers a convincing incentive to try it out and potentially switch sides.With the large number of store locations that McDonalds has in Canada already, the withdraw coffee will see wide-scale distribution, meaning that a large percentage of the nations population will be able to taste the coffee and approximate it accordingly. Marketing this track down is absolutely essential to its success. McDonalds has used boob tube advertisements to great effect in the past, and it should be no different for this campaign. line communication will inevitably take place and more flock will get a chance to taste the coffee. With all that being said, McDonalds must implement measures to prevent customers from taking advantage of the free coffee.For example, it can limit the free coffee to the small cup size and implement a one-cup-per-customer rule. Furth ermore, McDonalds must set a accurate time period for the campaign. Customers shouldnt come into McDonalds expecting free coffee after the campaign is over. Proper use of McDonalds brand equity, cash and infrastructure is the key to the success of McCaf in Canada. Although the McDonalds brand is well known, it is important to note that the McCaf brand is just beginning to grow in Canada. For this reason, I recommend that all McCaf locations start off as denotations of existing McDonalds restaurants rather than stand-alone restaurants.Once the McCaf brand becomes popular tolerable in its own right(likely after the free coffee campaign mentioned in the paragraph above), stand-alone McCafs can be established. As of right now, taking the stand-alone route is much too risky. Finally, I recommend that all McDonalds locations which will take on the McCaf extension receive an upgrade to its interior design. Since McCaf will be acting as a pseudo-competitor to sophisticated coffee retailer s like Starbucks, design changes must be made to reflect the transformation.For example, bright colours like red and white-livered must be replaced with warm, inviting colours like cream and mocha. Moreover, some of the standard four-seat tables should be replaced with sofas and loveseats. The addition of soft, contemporary music in the restaurant would similarly help in conveying the image of an upper-class coffeehouse. With my given recommendations, I strongly believe that McCaf will be successful in Canada. If you have any questions regarding my report, please feel free to contact me.Regards,Sanger (Sung-Young) YooAppendicesResource found View of McDonalds CanadaResourceValuable?Rare?Inimitable?Substitutable?Tangible AssetsCashXX total of store locationsXXStrong managementXStrong franchiseesXXExisting product lineXXGlobal social movement (121 countries)XXIntangible AssetsGood reputation in fast-foodXXDepth of supply chainXX set equityXXCustomer loyaltyXXOrganizational Capacit yFast customer serviceXProduct developmentXX union of theatrical roleXAppeal to all agesXSWOT Analysis of McDonalds Canada(Regarding McCaf)StrengthsWeaknesses-Powerful supplier partners including Coca-Cola, Disney and Nestl -Good quality coffee (100% Arabica-brewed coffee)-Combines affordable coffee with sophisticated environment-Bad reputation for coffee -Declining market share in breakfast salesOpportunitiesThreats-Potential merger with another company (similar to Starbucks and Chapters) -Explosive growth in retail coffee consumption in Canada (Growing market for McCaf)-High levels of competition