McDonald’s Trading Up the Channel Member’s Product Mix

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McDonald’s Trading Up the Channel Member’s Product Mix

This Case situation is about 10 years old as it applies to Canada, so I would like you evaluate Questions 1 & 2 based on the case information only. The situation was very close in Canada except Dunkin Donuts was not a factor in Canada. Tim Hortons was a major competition then as now. Questions 3 & 4 relate to the current situation in Canada and are your point of view.
The case is about franchises in the Marketing Channel. In 2009 McDonald’s USA introduced McCafe and 2 years later into Canada. The case describes the conditions in the USA prior to the US launch.
We will be discussing Franchising in Week 11.
There are two short article links that will provide some context for the breakfast daypart for Wendy’s and Tim Hortons in Canada.
Canadian notes to add to the Case information from the articles :
1. Tim Hortons introduced Breakfast Sandwiches in Dec 2011 after McDonald’s introduced McCafe
2. Tim Horton’s did not introduce Dark Roast Coffee until 2014 – regular blend and de-caff was all that was available for hot coffee until then
3. Wendy’s re-introduced breakfast sandwiches in Sept 2019 in the USA and Canada. It had launched originally in 1985 but was it was not successful and the products were discontinued after 9 months.
Questions:
1. Do you believe McDonald’s trade-up strategy to the McCafe line of premium coffee products is a good deal for the franchisees based on the information in the case – why or why not? (10 marks)

2. What product advantage did McDonald’s have when it introduced McCafe in Canada (8 Marks)

3. Based on your own experience do you believe that McDonalds’s McCafe is a “oranges and oranges” alternative to Starbucks? Yes or No and explain your point of view ? (5 Marks)

4. Are the risks for the franchisees the same for Starbucks and McDonald’s? (7 Marks)

https://www.forbes.com/sites/aliciakelso/2019/09/10/wendys-bets-20-million-that-breakfast-will-work-this-time-around/?sh=5f7025594e8d
https://company.timhortons.ca/ca/en/corporate/news-release.php?id=7618