Case 16: McDonald’s Alternatives 1. Acquire an existing coffee firm Acquiring an existing coffee firm in the marketplace that has a decent share of the market (i.e.: Country Style) would allow McDonald’s to hit the ground running in the coffee segment. They would not have to battle for market share and actively seek out customers and suppliers upon or before start up. In addition, McDonald’s would be able to utilize the acquired firm’s brand equity in adding profit and value in its business group. Acquiring an existing firm also fits in well with McDonald’s growth by acquisition strategy and would give a wider range to its product line. However, acquiring an existing firm posing significant financial risk, as such an endeavour is capital intensive and is still subject to a significant chance of failure. Such a strategy may also fail because the acquired firm’s image may not fit that of McDonald’s.
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This note was uploaded on 01/26/2010 for the course ADMS 4900 taught by Professor Jungchinshen during the Spring '10 term at York University.