McDonald's vs. Starbucks

Homework: Analysis of McDonald’s and Starbucks McDonald’s and Starbucks have completely different values when it comes to their businesses. Typically, McDonald’s can be seen as focused on their speed of service, low cost/prices, and generally happy attitude. On the other hand, Starbucks can be seen as a laid-back, relaxed, good experience for the customer system. On one side of the spectrum, McDonald’s is more cost-oriented. They strive on having low costs monetarily, and passing that onto the consumer. First, they reduce the cost monetarily, but making the price low to the consumer. Next, they cut the temporal cost but getting the speed of service down and making the experience as quick as possibly; with this, it also reduces the behavioral cost by not requiring so much physical effort. By doing all of these things, it lowers the benefits of eating there. People aren’t necessarily “proud” to eat at McDonald’s; it’s kind of something you do, but don’t brag about. With Starbucks, it’s a totally different side. Customers go there to order premium coffee. Starbucks is more driven with the benefits rather than the costs dimension. People who get their coffee at Starbucks are proud to show it off and drink it in public, which is the personal benefit of drinking it. Starbucks also increases the social benefit by engaging the customer, rather than trying to “push them through.” The experiential benefit of Starbucks is also high; customers go into the store and the mood is set by the surroundings, which is typically calm and meloow, making the customers feel good and welcomed. Again, the two companies have totally opposite values when it comes to operating, but that doesn’t mean one is right or wrong. It’s just what works for them.