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Starbucks & McDonald's

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Kwai See Liew

on 11 October 2013

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Transcript of Starbucks & McDonald's

• McDonald’s launched it’s first McCafé in Melbourne, Australia, in 1993.
• McCafé is the concept of a more sophisticated style of café.
• The sophisticated culture of coffee drinkers in Australia responded to this so well that the decision was made to take the concept globally.
• In 2001, it brought the concept to the United States and McDonald’s is now in the process of installing McCafés in 14,000 stores across United States.
Starbucks & McDonald's
By :
Gan Kar Yan 4271996
Liew Kwai See 4267347

Tutor : Ms. Racheal Louis Vincent
Issues Identification
Comparing McDonalds’s and Starbucks strategy of offering coffee in Australia.

Identifying the best strategy for both companies.
Customised products and services for local market
Creation of competitive advantage
Higher cost and price

Global versus Local
Same products offered everywhere
Reduced cost and price
Product and services irrelevant to local market

"Thinking Global & Act Local"
Reference Lists
(i) Taste
*Serve fine espresso coffee drinks
*Reduce milk and sweet flavoured syrups

(ii) Quality
*Specially train barristers
*Handcraft each cup of coffee

Starbucks implements standardisation in it's expansion strategy to Australia. It is currently in the sixth place with less than 2% share.

McCafe implements localisation strategy and is currently second in dominating the Australian coffee market.

Glocalisation is a better strategy for the long-term outcome in this context.
Australian Food News 2013, Starbucks: What went wrong? Australian Food News, viewed 25 September 2013, <http://www.ausfoodnews.com.au/2008/07/31/starbucks-what-went-wrong.html>.

Businesscasestudies 2013, 'The McCafe Concept - Staying ahead in a competitive environment - McDonald's Restaurants', McDonald's Restaurants case studies and information, The Times 100, viewed 25 September 2013, <http://businesscasestudies.co.uk/mcdonalds-restaurants/staying-ahead-in-a-competitive-environment/the-mccaf-concept.html#axzz2ftCQpYIz>.

Contributor, Q, Baumeister, R, Teicher, J & Yglesias, M 2013, How Do You Compete with Starbucks in the Coffee Industry?, viewed 25 September 2013, <http://www.slate.com/blogs/quora/2013/04/03/how_do_you_compete_with_starbucks_in_the_coffee_industry.html>.

Knowledge.asb.unsw.edu.au 2013, 'Marketing Lessons: Whatever Happened to Starbucks? - Knowledge', Australian School of Business, viewed 25 September 2013, <http://knowledge.asb.unsw.edu.au/article.cfm?articleid=1192>.

Oxforddictionaries.com 1990, glocalization: definition of glocalization in Oxford dictionary (British & World English), viewed 25 September 2013, <http://oxforddictionaries.com/definition/english/glocalization>.

Sharp, B 2013, Marketing: Theory, Evidence, Practice, Oxford University Press, South Melbourne.

Strategiccreative.com.au 2013, 'Starbucks Lessons from Australia', Strategic Creative, viewed 25 September 2013, <http://strategiccreative.com.au/2013/04/16/lessons-from-starbucks-failure-in-australia/>.

Thank You
What are the differences between standardisation and localisation?

For a country without strong coffee culture like Malaysia, should Starbucks adopt standardisation or glocalisation?

Do you prefer Starbucks or McCafe?
Offering according to both global and local considerations

Implementing the Marketing
Two Different
Strategies for Coffee
Drinkers in Australia

(iii) Environment
*Promote a warm, welcoming and friendly environment

(iv) Price
*May maintain

(v) Service
*Maintain level of personal service
Starbucks entered the Australian market by opening a store in Sydney in 2000.
In Melbourne, cafés tend to be small and boutique. Starbucks, with its American style of café culture, did not fare so well.
Starbucks is famous for bringing cafe culture to the United State and have done particularly well in countries where there was not already an established coffee culture.
In 2008, there was a cull of Starbucks stores around Australia, with three quarters of all Australian outlets closed.
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