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7 January 2008

Brand Autopsy: McDonald's battles Starbucks


McDonald's battles Starbucks

Sensing an opportunity to further democratize espresso, McDonald's is moving full throttle into the espresso beverage business. Currently, 800 of McDonald's U.S. locations offer lattes, cappuccinos, and frappes. By 2009, most U.S. McDonald's locations will be selling coffee drinks ranging in price from $1.99 to $3.29. McDonald's believes an expanded coffee menu will add about $1-billion in yearly sales.

Writing in the Wall Street Journal
, Janet Adamy reports,

The program attempts to replicate the Starbucks experience in many ways -- starting with borrowing the barista moniker. Espresso machines will be displayed at the front counters, a big shift for a company that has always hidden its food assembly from customers. McDonald's says it wants customers to see the coffee beans being ground and baristas topping the mochas and Frappes with whipped cream.

"You create a little bit more of a theater there," says John Betts, McDonald's vice president of national beverage strategy.


The theater element, of having employees preparing food while interacting with customers, is a major shift in company culture for the operationally-efficient McDonald's system. In the article, Adamy mentions how McDonald's franchisees have been instructed to hire people who are "very friendly."

That's a start to bringing more theatrics to a customer's McDonald's experience, but why is hiring "very friendly" people a new behavior for McDonald's? (Hmm.)

The people component to delivering customer experiences is ultra-important to McDonald's — more important than the actual coffee beverage program. Why? Because Starbucks competitors can replicate products and programs, but they can't replicate people...More

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