ty to increase sales by selling coffee through McDonalds, but it doesn’t fit Starbucks image of quality and luxury because McDonalds is know for its “McValue”. I believe that Starbucks could create a special brand of coffee just for McDonalds that doesn’t use the Starbucks name. McDonalds would then have a high quality coffee without Starbucks having to be associated with them. McDonalds may not want their coffee if doesn’t bear the Starbucks name.The second alternative is to push the Frappuccino product that both Pepsi and Starbucks created into national distribution. If the test market data is accurate this should prove to be successful and very lucrative. I personally can’t see how this would be successful but there are many people with different taste preferences than me. The results showed that 70% of testers became repeat customers, which is practically unheard of. The figures show that this could result in revenues of $300 million by 1999. This is far to good of an opportunity to pass up.Another alternative is franchising their coffee carts. I believe that would spark lots of interest and provide a fast move into many markets. They should franchise the carts and not the retail stores because the carts would be a turnkey operation and once all the retail stores are in place both nationally and internationally they will produce a profit and earn back the financing that would be required. Also the carts would be easy to run and could be set up at busy street corners and such without having to purchase expensive real estate. These carts would have to provide the same quality and service as the regular coffee houses. The last alternative involves each of the previous but would also include vertical and horizontal integration. For Starbucks to be a continued success and to gain more control they have to start producing their own beans. This could happen gradually but it has to be done....
