- The issues that are within the company's control are the same issues that MCD faced in 2003 (a need to slow unit growth and refocus on the customer and in-store execution) with some slight differences. Unfortunately for SBUX, MCD's fix came at a time when we were in a much stronger consumer environment. Working in SBUX's favor, however, is the fact that the SBUX brand is not tarnished with the bad product image like MCD was. SBUX is just relatively expensive and frequency is declining.
- As it turned out, MCD's plan to win strategy had a silver bullet to bring customers back - salads. SBUX is losing frequency due to economic issues and not due to issues with the brand. The new coffee SBUX recently introduced helped to broaden the appeal of the concept, but it was not a silver bullet. Right now the SBUX silver bullet is on the drawing board in Seattle.
- MCD announced its plan to win in April of 2003 and saw immediate results in that quarter. Like SBUX, MCD had been experiencing declining same-store sales trends and operating margins. From a timing standpoint, MCD's plan translated into to an immediate uptick in trends because it coincided with the introduction of salads and the company was able to cut is capital spending right away. MCD's capital spending was down 22% in the same quarter the plan was announced and down 35% within the year the plan was implemented.
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