Will McCafe Be the Next Starbucks?

Will McCafe Be the Next Starbucks?Bywww.BuyOrganicCoffee.org

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American coffee lovers have made high end coffee shops like Starbucks successful.

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Along the way the price of a good cup of coffee has soared.

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Is there any hope for the cost conscious lover of healthy organic coffee?

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There may be according to an article in Fortune.

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It turns out that McDonalds wants to be the next Starbucks!

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McDonald’s is challenging Starbucks and Dunkin’ Donuts in the coffee business as part of an effort to attract more customers.

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The fast food company will reintroduce a newly branded McCafe, complete with upgraded $12,000 espresso machines, special deals for customers and a promise

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to buy more sustainably sourced coffee, to make McDonald’s a go-to location for a caffeine boost.

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To draw customers away from its competitors, McDonald’s will highlight its price advantages over Starbucks

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with offers including $1 drip coffee and $2 small specialty beverages over the first quarter of next year.

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If McDonald’s ends up providing comparable coffee to Starbucks and Dunkin’ Donuts it will be a threat to both.

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A new coffee chain needs to attract customers as it builds new stores.

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. McDonalds already has 14,157 outlets in the USA. Starbucks has 11,000 compared to 10,858 Dunkin’ Donuts.

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Coffee Shop Coffee and a Huge Customer Base

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The threat to Starbucks is real. You can drive up to many McDonalds to get your coffee which is more often not the case with Starbucks.

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And McDonalds already has a huge client base already feeding 68 million people a day.

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By comparison Starbucks sells about 4 million cups of coffee a day.

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McDonalds can use cheap but good coffee as a loss leader to bring in more customers while Starbucks will only lose money by discounting its coffee.

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How about Image?

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Every restaurant business has it image.

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McDonald’s, in order to keep growing, needs to modify its image and coffee is part of that.

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Additionally its coffee business currently brings in $4 billion a year.

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Guru Focus wonders if coffee can help McDonald’s improve its image.

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McDonald's is going through a huge transformation process, moving toward a franchise-heavy model as it faced a huge slowdown in its growth trajectory.

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Things have picked up in the last 12 months, though, as same-store sales stayed positive.

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Coffee is indeed a huge global market and, considering the fast food chain’s footprint of more than 36,000 stores around the world, coffee could well turn out to be a big revenue spinner for the company.

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The effort will take time to percolate through to the top line, but a big push can help effectively re-brand the unit. Also under way is a major overhaul of the entire chain with a focus on more personalized service.

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With a gigantic worldwide customer base McDonald’s has the capacity to attract many people up to better coffee

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and steal gourmet coffee lovers who would not mind a little savings from the likes of Starbucks.

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We will have to wait and see if McCafe will be the next Starbucks.