Business Strategies of McDonalds, El Gato Café, and
Kalye Siete
In Partial Fulfilment of the
Requirement for the course
Industrial Organization and Management
(IE 125)
By:
Group 5
Nasing, Gwyneth Anne
Olasiman, Gabriella Lorin
Kairan, Elviña Vanessa
Jumli, Ahmader
Manuel, Brion
(BSIE 2B)
Engr. Aylene Ingkoh
(IE 125 Instructor)
9 November 2022
The Business Strategies of McDonalds, El Gato Café, and Kalye Siete
It's not very difficult to break into the food service industry; the real challenge is surviving the
competition. S eventy percent of restaurants close their doors within the first year of existence, and 80
percent do so within five. There is no magic formula for running a profitable food business, unlike the
finest secret recipes for cuisine cooked to perfection. Success in the food service industry requires a lot of
effort and years of experience. Some of the most prominent and successful food business have survived
despite the fierce competition in the sector by understanding what works best for their business. A food
company must recognize what a potential customer wants, or in other words, build the demand for a
business offering, in order to remain competitive and updated. As a result, developing a business strategy
is crucial.
McDonald’s Business Strategy
El Gato Café’s Business Strategy
El Gato Café is a themed cafe that has become immensely popular throughout the region. It is the
first and only cat cafe in Zamboanga City where customers come to enjoy the food and beverages that are
offered, whilst getting a chance to socialize and be surrounded by the café’s resident cats that can be pet
or feed. The cafe is also a great way for those customers who don’t want the responsibilities of a pet
owner, so it is perfect for them to spend time with pets without the responsibility of caring for their needs.
Moreover, the cafe’s vision is to create a relaxing and peaceful spaces, free from stress where cats and
humans can come alongside each other and rest. The café indeed provides a total escape and a haven.
The food business, which was founded in 2019, has changed the way people drink coffee and tea
outside of their homes and workplaces. El Gato Café is credited with inventing the concept of the third
place between home and work where people can unwind, savor a cup of coffee whilst enjoying their
snacks or meals, and contemplate the pleasant ambiance. The business sells a variety of coffees, teas, milk
teas, handcrafted beverages, milkshakes, fruit teas, finger foods, rice meals, and other products. Since
then, the business has become an iconic brand in Zamboanga, known for its quality food and drink
products and exceptional customer service, thanks to its unique business strategy. The business strategies
of El Gato Café are nothing short of a phenomenon. Their distinct marketing techniques have helped the
business gain a competitive advantage in establishing itself as an industry leader.
Furthermore, El Gato has invested a significant amount of time and resources in marketing and
consumer loyalty over the years to ensure that the café experience is uniform around the region anytime
you need a cup of coffee and makes it unique from other traditional cafes. El Gato Café sells more than
just beverages; it also sells the “El Gate Café experience.”
The successful business strategies of the cafe address all four Ps of the marketing mix: product,
price, place, and promotion. It strengthens El Gato Café’s position as one of the region’s leading
coffeehouse chains, thus also allowing the cafe to stay competitive and up to date. To understand why,
let’s examine how these four Ps develop its business image, attract customers, ensure profitability, and
contribute to the cafe’s success.
Product
El Gato Cafe has established itself as the go-to spot for premium coffee and other
beverages. It offers an extraordinary experience for its various products. They guarantee that
every time they craft a high-quality premium cup; it will be perfect, which will keep customers
coming back. In addition, customers can pair their favorite drinks with the cafe’s halal meals and
snacks offered that taste like home and will surely indulge the tastebuds of the customers.
The following are the main categories in El Gato Cafe’s product mix:
1. Coffee
2. Tea
3. Milk tea
4. Frappuccino Blended Beverages
5. Fruitea Refreshers
6. Other foods and beverages
7. Merchandise (shirts, tumbler, cat shaped magnet hook, luggage tag, cat food, etc.)
The cafe distinguishes itself from other coffee chains by selling beautiful lifestyle
products. Their merchandising includes funky stuff that is almost as well-known as their coffee. It
is most likely the only coffee chain in Zamboanga City with such a diverse selection of lifestyle
products.
In addition to its products, the cafe also offers service through its cat sanctuary. The cafe’s
cat sanctuary is enclosed in a cubicle on the second floor and a customer must pay a certain fee
to pet the cats for 45 minutes inside that cubicle. So, by charging the customers for petting the
resident cats, it shows another of a good business strategy that lets them earn other profit aside
from selling their food and drink products. Nevertheless, the cat sanctuary based on customers
feedback indeed offers them a relief and comfort, thus the charging price is worth it. Additionally,
the cafe also offers service that allows customers to have their prenup photoshoots, debut
photoshoots, and others inside the cafe. Because aside from public spaces, cafes are also great
venues for photo shoots. It is a concept that is very popular because of the relaxed vibe it gives
out and the intimacy it projects. Aside from those mentioned, the cafe also offers service that
allowing customers to use their place (the second floor where the cat sanctuary is located) for
celebrations such as anniversary surprise set up, birthday surprise set up and others.
Price
El Gato Cafe has implemented a premium pricing strategy. The price is justified by the
high-end technology and variety it provides, as well as the best customer experience. Many
customers believe that high-quality products come at a high cost. Premium pricing helps them
keep their quality promise and cater directly to their ideal customer’s lifestyle preferences
Their business strategy is built around two main pillars: customer experience and quality.
The cafe has increased the perceived value of its business by providing a unique, consistent “El
Gato Cafe experience.” As a result, customers are willing to pay a higher price for a cup of coffee
of the said cafe.
Place
Customers don’t have to limit themselves to its stores to get their drinks, meals, and
snacks. They can also find their products through other channels. Since the business has only one
physical store, the new online service has resulted in yet another breakthrough for the business
in maximizing its distribution and market reach. The business’s Facebook page and food delivery
apps (which is available on GrabFood and FoodPanda) provide easy access for customers who
want to check available products or place their orders for pickup or for delivery through thirdparty service providers.
Additionally, as self-evident as it may sound, the entrance of the cafe ensures the
customer that their coffee shop has an eye-catching appeal. Ideally, the cafe looks good enough
exteriorly and interiorly to lure people into stopping by for a cup of coffee, even if they hadn't
intended to, originally.
Promotion
El Gato Café actively promotes its products on social media platform such as Facebook, in
addition to paid advertisements such as KCC Mall de Zamboanga ads using Facebook platform.
It’s the combination of marketing media that makes their business recognizable, and the
consistent message that comes across every time that distinguishes them.
The cafe also offers reward programs and promos to existing customers to encourage
them to stay loyal to the cafe. It employs a multi-channel promotional strategy and is active on
social media platform through contests, hashtags, and other promotions. This business brings its
seasonal offers and menus to every occasion. El Gato Cafe never misses an opportunity to engage
its customers in innovative ways.
Others
Some cafes are increasingly investing in free and fast Wi-Fi, which is a good thing. For
many small or mid-sized businesses, it is a no-brainer, but offering free Wi-Fi services can help
businesses gain customer loyalty and boost sales. It can also benefit employees as well.
Unfortunately, the El Gato Cafe does not provide it, thus they are missing benefits free internet
access provides.
Although the said cafe does not offer Wi-Fi accessibility, they still come up with new ways
to attract customers to their cafe. Aside from what have been mentioned previously, the cafe is
still a perfect place to visit because the cafe offers board games to play and books to read for free
that will enable customers to have fun with and kill their boredom while waiting for order or
staying at the said café. Likewise serving this as a break from internet/technology, customers can
start to fully enjoy the moments they spend with other people and especially the resident cats.
All in all, disconnecting from internet/technology indeed benefits the customers because it
reduces stress and anxiety, opportunity to focus on appreciation and gratitude, provides more
time for simple pleasures, and connect with the neutral world.
Kalye Siete’s Business Strategy