With fast food chains offering coffee as well as dollar menus, it only makes sense for Cataracts to compete for at least a small share in the value price food and beverage market. Unlike most fast food chains though, Cataracts is looked upon to be a more premium brand for food and beverages and they have had great success doing it. So the main objective would be trying to lower prices of their products while still maintaining that premium status. With already having great success, it makes zero sense to change their whole business outlook and become a value store and compete with cheaper food chains.
Cataracts did it right by just offering the more affordable “Instant Packs” to consumers for them to make to make on their own because they still keep that “Cataracts” premium trademark but yet sell it at a lower price. But since the recession in 2007, a lot of people started to be a little more careful with their finances and the first thing to cut back on are things like Cataracts, they go to those cheaper places like Dunking Doughnuts or McDonald’s to get those cheaper cups of coffee. McDonald’s even went as far as to offer free coffee with the purchase of a cheap sausage biscuit. Talk about throwing punches.
Cataracts had to make a strategic move to keep competing in the coffee market. 3. This is a tough one because though both companies are selling the same product, they tailor to different people. Another thing that makes determining the winner of this question difficult is that, Cataracts is trying to become more like McDonald’s. This might sound like McDonald’s would be the winner in the long run, but McDonald’s is actually trying to become more like Cataracts. As mentioned in the previous question, Cataracts is pushing a more value ricer menu for the many to don’t wish to spend 5 bucks on a cup of coffee.
McDonald’s is now trying to merge into the high-end coffee market. In fact, I actually heard that they are actually trying to put coffee bars on a lot of their restaurants in the near future. Is that a Risky decision by McDonald’s? Sure think it is. But overall I think since McDonald’s is more established and has more value offerings as well as high-end offerings, that they will be the overall winner in the long run. Cataracts I don’t think quite has the variety of overall products that McDonald’s has to really compete with them.