Starbucks Vs. Mcdonalds

McDonalds and Starbucks spend huge dollars developing their brand names and marketing initiatives domestically and internationally. How do you think McDonalds and Starbucks are able to establish their brands to fit local markets through architectural design of the stores, their e-commerce strategies and service to accommodate the local markets and culture?

Explain their approachesindividually and see if there are any differences or similarities. Do you think Starbucks benefitted from the missteps by McDonalds that you will read about in your research? Use reference material from course readings and outside sources when needed to strengthen your argument.

According to Brown and Gutterman, on A Short Course in International Business Plans, “marketing is considered by many to bethe most important part of an international business plan”. All companies with global goals and objectives, regardless of the size or line of business, need to know the different marketing strategies that a company may employ to enter new markets and expand domestically and internationally, each with a different level of risk, legal obligation, advantages and disadvantages. A company may use adifferent strategy in each country, and two or more strategies may even be employed in one country. (Brown & Gutterman, 2009)

Among the available entry strategies, the most common are direct export sales, strategic alliances, new foreign entities and foreign investments and acquisitions. (Brown & Gutterman, 2009)

Two U.S. based companies that have successfully entered new markets andhave prominently position themselves in the minds of customers (and prospective customers) worldwide are McDonald’s and Starbucks. The two powerhouse companies are considered two of the most successful and best known brands in the world by Forbes Magazine. (The World’s Most Valuable Brands, 2010)

There is no single international marketing strategy that is universally effective, companies suchas McDonald’s and Starbucks have expanded operations and maintained a dominant market position by developing their own business models based on their needs.

McDonald's is the largest fast food chain in the world, operating in 119 countries and serving over 58 million customers every day. (McDonald’s Largest fast Food Chain, 2010) It doesn't matter if you're visiting a McDonald's in NewYork or California, London or Mexico City; you're going to have a similar experience wherever you are. McDonald’s was able to commit to its goal: the same food at the same price would be eaten in the same restaurant in every corner of the world, by taking advantage of its unique franchising strategy. Franchising aligns with the company’s goals, strategies, and practices, enabling the company for arapid market expansion using the company’s intellectual property, and the capital and enthusiasm of a network of owner operators. Today, over 70 percent of McDonald's Restaurants are franchises. (McDonald’s Largest fast Food Chain, 2010)

Starbucks is the largest international coffeehouse chain in the world, with about 17,000 stores in over 40 different countries. It has come a long wayfrom its coffee bean retailer days. Starbucks has succeeded globally by carrying out flexible entry strategies, such as, licensing and joint venture and whole ownership. Most Starbucks in the United States are corporate-owned, but all of the stores outside the United States are either corporate-owned or partially owned joint ventures with licensing rights, the company relies on local retailersthat have local business expertise, cultural knowledge and skills in finding local real estate.

McDonald’s has consistently invested billions of dollars throughout its domination of the fast food market in researching, defining, and building its brand. On the other hand, Starbucks has not made such a big investment, preferring instead to build the brand cup by cup with customers and depend on...