Case Name :      McDonald’s and the McCafe Coffee Initiative

Authors :           Pratima Bansal, Lindsay Sgro

Source :             Ivey Publishing

Case ID :            904M08

Discipline :        Strategy

Case Length :    12 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Although McDonald’s breakfast and snack sales increased, they have not kept pace with industry growth. The primary barrier to this sales growth in the Canadian market, according to a franchise owner, is the quality of the coffee. McDonald’s in Canada has tried to build its coffee brand equity for many years. It had switched to the Higgins and Burke coffee but had little success changing negative customer perceptions. To change customer perceptions, McDonald’s needed to revolutionize its coffee program. McCafe was introduced in response to this coffee issue: a full-service coffee bar located in a McDonald’s restaurant as an extension to the front counter or located as a stand-alone restaurant. Over 300 McCafes existed worldwide. Although McDonald’s would like to get a piece of the lucrative coffee market, McCafe’s main objective was to eliminate coffee as a barrier to breakfast and snack sales. The question for one franchise owner is whether McCafe’s strong initial sales can be sustained.