McDonald's: “an obsession with Starbucks’ business model.”
Of course, McDonald’s has undergone periods of strategic muddle in the past, namely when it belatedly recognized a decade ago that it was expanding too much in slow-growing markets and curtailed store growth. And with a sturdy balance sheet, ample cash flow, and a 3.3% dividend yield, conservative investors might see the coffee cup as half-full for the stock.
Penney is skeptical, though. “I wouldn’t own it,” he says. “I think it will underperform.” Until, perhaps, McDonald’s brass addresses its drinking issues.
In the patent business, it's wise to link patent strategy with the core business strategy, to avoid, for example, the Xerox failure.