Battle of the Breakfasts

Althought “McDonald's might be the largest restaurant in the world…it still needs growth catalysts” (Fool 1). This being the case, McDonald’s most recent strategy is moving towards the “coffee shop” vibe and space. Not only that, but “on several occasions, McDonald's has hinted that it wants to expand its reach in the breakfast market…continu[ing] to innovate in order to maintain this lead” (Fool 1).

As described in lecture, McDonald’s strategic business moves can be seen as falling into three critical planning process questions:

Where are we now?

Where should we go?

How do we get there?

Their most current direction? Petite Breakfast pastries that paired with the addition of a McCafe coffee to one’s order will be offered at a discounted price of .70 cents. Even though McDonald’s is not a new, up and coming or even a start-up, without paying attention and constantly adjusting the answers to the above questions and having an open eye at corresponding environmental, industral and company analyses, McDonald’s would fall to the wayside.

Cue Taco Bell’s Breakfast

With the news that they will be offering a new line of breakfast items (launched March 27^th) and a recently launched ad campaign “featuring several dozen real guys [Taco Bell] found named 'Ronald McDonald,' who cheer the new Taco Bell breakfast line-up” (Horovitz 1), McDonald’s is vigilantly working towards keeping their current market position. Offering free coffee during breakfast hours from March 31 through April 13 merely a few days after Taco Bell’s roll out their new breakfast line, this simply yet clever product, price and promotional effort (sounding similar to Porter’s 5 Forces, anyone?)

Social media responses also include McDonald's replying to the launch with the following tweet: "Breaking! Mayor McCheese confirms: Ronald, in fact, still prefers McDonald's" (DiBlasio 1).

Even though McDonald’s is “the industry leader at fast-food breakfast with about a 25% market share” (DiBlasio 1) will Taco Bell’s latest strategy of breaking into the breakfast area hinder any of McDonald’s customers and profit margins? Do Dunkin Donuts and Starbucks have a future role in this battle? Or is Taco Bell digging the grave for their beloved Chihuahua, right along side their A.M. Crunch Wrap, Waffle Tacos and Cinnamon Delights?

-Dan Gorchynsky

Sources:

DiBlasio, Natalie. "McDonald's vs. Taco Bell Breakfast War Goes Viral." USA Today. Gannett, 29 Mar. 2014. Web. 29 Mar. 2014.

Fool, Dan Moskowitz The Motley. "McDonald's New Menu Item Hints at New Strategy." USA Today. Gannett, 22 Mar. 2014. Web. 30 Mar. 2014.

Horovitz, Bruce. "McDonald's Pours Free Coffee as Breakfast Wars Steam." USA Today. Gannett, 28 Mar. 2014. Web. 30 Mar. 2014.