Pennsylvania State University



7. McDonald’s plans to install coffee bars at its nearly 14,000 U.S. locations starting this year, its biggest menu addition in three decades. The effort to poach Starbuck’s customers aims to add $1 billion to the fast food chains annual sales.(Wall Street Journal, 1/08)What type of thesis research might you conduct within your own major to examine some of the dynamics at play described in this Wall Street Journal article?- Industry analysis and competitive mapping-Major Players-Market Share-Total Market Size-Competitive Advantages of Starbuck’s vs. McDonald’s (Ex. Starbuck’s laid-back, up-scale atmosphere vs. McDonald’s ability to offer products at low prices)-Customer demographics and buying criteria-Who is the “typical” customer for Starbuck’s vs. McDonald’s? Do they overlap?-What are customers look for in terms of quality, value, and convenience?-Are McDonald’s customers looking for quality products as opposed to long-time successful fast, cheap food?-Are they looking for an “experience/show”? Will this interfere with the order time for other customers who are concerned with getting their cheeseburger as quickly as possible?-Is Starbuck’s just about the drink?- Other battles between market leaders in adjacent markets.? What was the outcome from a financial perspective - cost to enter the market compared to the return in increased sales?As McDonald’s prepares for the addition of coffee bars in many of its U.S. locations, the question of how Starbuck’s will be affected arises. Starbucks is a key player in the gourmet coffee and drink industry, and some may credit it with introducing the concept. Does McDonald’s, known for its cheap, fast food, pose a serious threat? This question lends a lot of room for research opportunity. From a financial perspective, I would concentrate my research on an overall industry analysis, customer demographics and buying criteria, and the outcomes of battles between market leaders in adjacent markets. The initial research would deal with an industry analysis and competitive mapping. Defining the industry and its major players would be the first step, followed by determining the market share of each of these companies. Who else is involved in the gourmet coffee and specialty drinks business? Another obvious threat in this industry would be Dunkin Donuts, with a value approach and concentration on specialty drinks similar to McDonald’s and Starbucks, respectively. McDonald’s would be considered a food quick service restaurant, and is now complementing its “core” with specialty drinks. Starbucks, on the other hand, is a beverage QSR that now complements its “core” with sandwiches and pastries. Dunkin Donuts seems to be a QSR with balance between its food and beverage services. The concentration of this preliminary research would deal with the competitive advantages of each of the companies over the other major players, and a comparison of their overlapping concentrations. A closer look at each of their strengths, weaknesses, opportunities, and threats will help to After a mapping of the industry has been established, I will continue my research with a study concentration on customer demographics and buying criteria. Who is the typical clientele of each store, and which groups overlap? A closer look into who makes up the customer base of these players will help determine what percentage of the customers these companies are competing for. As each of these companies expands its business concentrations into the areas that have are offered by their new competitors, buying criteria becomes a key element in determining where the shared customer base will end up. An analysis of buying criteria will concentrate on three main elements: quality, value, and convenience. How do customers rank these criteria, and how do the companies emphasize each of these?Based on customer demographics and the customer’s buying criteria, I will be able to establish what percentage of Starbuck’s current customer base has the potential to leave permanently and take their business to McDonald’s or vice versa. As hypotheses begin to form, a look into adjacent markets with similar battles between major players will help to measure the magnitude of these possibilities. From a financial perspective, I will compare the cost to enter the market, and their return on the investment. ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download