Quick Take: McDonald's Japan to Take On Starbucks

McDonald's (NYSE: MCD  ) experiment with stores focused on coffee and lattes can't be going too badly, because its Japan unit has announced it will open up 15 McCafes in Tokyo very soon.

Just as in the U.S., this will put the company squarely in competition with Starbucks (Nasdaq: SBUX  ) . But the market for coffee shops in Japan is actually more crowded than it is here, and McDonald's will have to wrestle with Doutor, Excelsior, Tully's, Mr. Donut, and others for customers.

In a customer's eyes, what immediately sets Starbucks apart from the competition is its decor and no-smoking policy. With convenient locations and a similar no-smoking policy, McDonald's Japan might be able to siphon off some traffic from Starbucks. I, for one, will be paying close attention.

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Nathan Parmelee owns shares in Starbucks, but has no ownership stake in any of the other companies mentioned. Starbucks is a Motley Fool Stock Advisor selection. The Motley Fool has an ironclad disclosure policy.