Word: mcdonaldization
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Dates: during 2000-2009
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...recession has been good to McDonald's. As consumers trade down to cheaper, faster food on the go, McDonald's has kept up its growth during the downturn. Same-store sales rose 4.3% for the quarter that ended March 29. Profits were up 4%, to $980 million. In this economy, that's an explosion...
...what's next for the Golden Arches? Try an all-out assault on coffee. Over the past 18 months, McDonald's has been steadily introducing lattes, cappuccinos and mochas in individual markets across the country. Some 80% of the company's 14,000 U.S. stores now sell these drinks, and this week McDonald's will roll out a national advertising campaign trumpeting the McCafé section of its menu. The timing of the rollout just happens to coincide with the struggles of Starbucks, whose earnings sank 77% this past quarter, mainly because of charges related to store closures and falling...
...McDonald's USA president Don Thompson insists the company has been planning the rollout's timing for over two years and that McDonald's is not specifically targeting Starbucks. "We don't need to talk about someone else to justify our business," says Thompson. McDonald's is just trying to grow, he says, by capturing share in a high-margin sector - specialty coffee - that has shown consistent growth. Whether you believe the company's motives or not, the bottom line is that McDonald's seems positioned for success...
...According to West, the new McDonald's drinks are almost $1 cheaper than those at Starbucks. "Is it Starbucks quality?" asks West. "I would never say that. But they're in the ballpark. And that's where they need to be." The analyst also conducts bimonthly consumer surveys, and found that over 60% of respondents said they will trade down to McDonald's coffee if the drinks are cheaper and made faster. Given the company's pricing history and the likelihood that the McCafé system will be quicker than Starbucks baristas, consumer sentiment is trending its way. Thompson says...
...chore - ironing one's shirt - becomes a much more pleasurable "choré" with McCafé coffee in your hand. That's kind of cute, but why don't the ads highlight the company's one major advantage over coffee competitors: price? With consumer spending still weak, shouldn't McDonald's be explicitly broadcasting its bargains? "Here's what everyone implicitly understands," Thompson says. "With our supply chain and the leverage we have, the products are going to be more affordable than other coffee offerings out there. What is less implicit is the taste. So what we are trying...