ragya CupLa

!"# %&'( )&'*')(+*,-(,)- ./ 0)1.2'345- 6*.47)(,.2 -8-(+9 &':+ ;++2 9.-( ,96.*('2( ,2
;7,34,2< ,(- *+).*4 ./ -7))+-- '24 <*.=(& ,2 (&+ ,247-(*8>
Mcuonald's producLlon sysLem was focused on offerlng unlform quallLy and servlce Lo
cusLomers across dlfferenL locaLlons, and Lhls ln my vlew was crlLlcal Lo Lhe company's success.
1he company was able Lo achleve unlform quallLy and servlce levels as Lhelr model focused on a
llmlLed menu and sLandard producLlon process, slmllar Lo LhaL of a manufacLurlng facLory. 1hls
also led Lhe company Lo dlve deep lnLo Lhe process for maklng each producL - whlch lead Lo
sLandardlzaLlon of lngredlenLs and focus on relaLlonshlps wlLh Lhelr suppllers.
1he company was successfully able Lo brlng dlverslflcaLlon Lo lLs menu and producLlon process ln
lnLernaLlonal locaLlons, whlch enabled lL Lo expand lnLernaLlonally. 1hls ln my oplnlon ls qulLe an
achlevemenL as brlnglng ln dlverslflcaLlon can be qulLe dlfflculL for a flrm whose exlsLlng culLure
and processes are rooLed ln sLandardlzaLlon and unlformlLy.
!?# %&'( '*+ (&+ '4:'2('<+- '24 *,-@-A6.(+2(,'3 6*.;3+9- ./ 0)B'/+ /.* )7-(.9+*-C
/*'2)&,-++- '24 0)1.2'345- ).*6.*'(,.2>
AdvanLages
1. Slnce Mcuonald ls faclng lncreased compeLlLlon ln Lhe fasL food segmenL, McCafe could
glve lL access Lo a new, hlgher margln and poLenLlally hlgh-growLh segmenL (as per
exhlblL 16 and 17)
2. 1he flrm would be able Lo access new cusLomer segmenLs and Lhls could poLenLlally lead
Lo cross selllng. As an example, McCafe cusLomers could also purchase from Mcuonald's
breakfasL menu as Lhese Lwo producLs nlcely complemenL each oLher.
3. Mcuonald's could have a flrsL mover advanLage ln Lhe coffee segmenL ln lnLernaLlonal
locaLlons where SLarbucks lsn'L well esLabllshed.
4. CusLomers would poLenLlally have access Lo lower-cosL (compared Lo leadlng coffee
reLall chaln SLarbucks) hlgh-quallLy coffee
8lsks
1. Mcuonald's brand lmage of a low-cosL fasL food chaln may dlscourage many coffee
drlnkers from Lrylng McCafe as coffee drlnkers ofLen seek medlum Lo hlgh quallLy ln Lhe
coffee Lhey consume.
2. A coffee place has a more lounge-llke feel Lo lL and Lurnaround ls slow. Whereas
Mcuonald's currenL model ls focused on fasL food and qulck Lurnaround Llmes.
lnLegraLlng Lhese dlverse process requlremenLs could be a ma[or challenge.
3. SlgnlflcanL caplLal lnvesLmenL would be requlred by Lhe franchlse sLores Lo launch
McCafe.

!D# E/ 8.7 =+*+ F.; 0'*-&'33C *+-6.2-,;3+ /.* ,963+9+2(,2< 0)B'/+C =&'( ).2)+*2- =.734 8.7
&':+>
1. CaLerlng Lo a dlverse LargeL markeL: Mcuonald's LargeL markeL (largely focused on klds
and Lhelr parenLs) would have overlap wlLh McCafe's LargeL markeL buL Lhls ls a greaL
opporLunlLy Lo Lap lnLo new cusLomer segmenLs. CusLomer acqulslLlon would largely
depend on poslLlonlng of McCafe and Lhe value offered by Lhe producLs.
2. Menu deslgn - producL and prlces: Mcuonald's ls prlmarlly percelved as a low cosL fasL
food chaln. ln deslgnlng Lhe menu, Lhls core cusLomer value has Lo be glven due
lmporLance. Pence, Lhe producLs offered should caLer Lo LasLes of Lhe LargeL segmenL and
also be percelved as a value purchase compared Lo speclalLy coffee houses such as
SLarbucks.
3. Speed of lmplemenLaLlon: WlLh emphasls on rapld expanslon, sLandardlzaLlon and quallLy
conLrol across franchlses could be a ma[or challenge. Also, ablllLy of franchlse owners Lo
make caplLal lnvesLmenLs for launch of McCafe could be a boLLleneck ln Lhe
lmplemenLaLlon plan.
4. rocess allgnmenL: lnLegraLlon of McCafe lnLo Lhe core fasL food buslness would requlre
process-reallgnmenL. uolng so wlLhouL dlsrupLlng Mcuonald's process efflclency would be
a ma[or challenge.
!G# %&,)& ./ (&+ '3(+*2'(,:+ 2+= 6*.47)( 6*.)+--+- /.* 0)B'/+ -&.734 0)1.2'345- '4.6(>
%.734 8.7 .//+* '( 1*,:+ H&*7 '24 =&+*+ =.734 8.7 3.)'(+ (&+ 0)B'/+ I('(,.2>
ln my oplnlon, Mcuonald's should adopL ConcepL 2 because
1. 1he sLore wlLhln sLore concepL would allow for a dlfferenL look and feel for McCafe whlch
l belleve ls crlLlcal as Lhe look and feel should be dlfferenL from Lhe sLandard fasL food
place. Slnce cusLomers spend more Llme ln-sLore drlnklng coffee, a more lounge-llke look
ls requlred. As an example: cushloned chalrs vs. plasLlc chalrs aL Mcuonald's.
2. 8elaLlvely lower caplLal lnvesLmenL.
3. Culck consLrucLlon Llme and less loss of revenue from 24-hour resLauranLs.
4. CraLer flexlblllLy for merchandlslng and markeLlng producLs. Lxample, selllng coffee
power and cookle boxes.
l would offer urlve 1hru as LhaL would help drlve cusLomer Lrafflc Lo drlve-Lhrough. 1hls would
also be a ma[or dlfferenLlaLlng facLor from oLher coffee chalns and poLenLlally help LargeL a
coffee drlnklng segmenL whlch ls unLapped by SLarbucks. Slnce Mcuonald's already has Lhe
lnfrasLrucLure and processes ln place for drlve-Lhru, lL should caplLallze on Lhls Lo cross-sell
coffee wlLh oLher producLs.


!J# K.= 9,<&( .(&+* *+(',3+*- 7-+ ).2)+6(- 3,@+ (&+ 0)1.2'345- E22.:'(,.2 L';>
1. Cmnl-channel offerlngs - 1oday, when brlck and morLar reLallers are faclng pressure
from lncreased use of onllne channels, lnnovaLlon labs can help reLallers develop an
Cmnl-channel sLraLegy Lo help cusLomers lnLeracL wlLh Lhe brand vla dlfferenL channels.
ueveloplng dlglLal and moblle markeLlng and sale sLraLegles would be a key componenL
of research aL Lhe lab.
2. roducL offerlngs: lor some caLegorles, such as apparel, producL offerlngs each season
are Lhe cornersLone of success. lnnovaLlon labs can help develop processes Lo Lap Lhe
cusLomer mood and Lry and predlcL Lhe upcomlng sLyles ln apparel so LhaL Lhe producL
offerlngs can be Lallored accordlngly.
3. lnLernaLlonal expanslon: undersLandlng cusLomer preferences ln dlfferenL geographles
ls key Lo successful lnLernaLlonal expanslon and lnnovaLlon labs can be exLremely
successful here. As an example, Pershey's lnnovaLlon lab ln Chlna has helped Lhem
enLer lnLo Lhe Lough Chlnese markeL.