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McDonald’s and Coffee – Game Theory? By Tenisha Mercer / The Detroit News

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Presentation on theme: "McDonald’s and Coffee – Game Theory? By Tenisha Mercer / The Detroit News"— Presentation transcript:

1 McDonald’s and Coffee – Game Theory? By Tenisha Mercer / The Detroit News

2 McDonald’s is Competing To burnish its burger-joint image, McDonald's has added healthier items to its menu and remodeled stores with plush seats and flat- screen TVs. Now, it's perking up the coffee. Metro Detroiters will get the first sip of a new McDonald's coffee Monday when it rolls out the product in Michigan -- the first test market in the nation.

3 Premium Coffee! The premium roast blend makes its debut at 525 stores in the state, while the coffee will be launched nationwide later this year. "Customers wanted something stronger, richer, bolder," said John Betts, vice president and general manager of McDonald's restaurants in Michigan. "It's really about taking a core product - - coffee -- and making it meet the changing needs of the consumer.“

4 The Product The new cup of Joe is the latest effort by the world's largest restaurant company to reinvent itself. The Oak Brook, Ill-based chain has successfully revived slumping sales, but increasingly competes with chains like Starbucks, Panera Bread Co. and others. The chain will give away coffee samples and coupons to fans at the Detroit Tigers' opening game at Comerica Park on Monday. A mobile coffee van stationed near Comerica Park will also distribute free samples. The chain is hoping the premium blend will have the same success as its popular McMuffin sandwiches. The new coffee will replace the chain's house blend. It will cost $1-$ far cheaper than a ChiChi coffeehouse brew.

5 The Economics – Game Theory? What do the payoffs look like? Do we know for sure? Do they know for sure? What determines profits here? McD – Coffee? $ NoYes No Yes Egg McS McD   McD   McD   McD   S   S   S   S  


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