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New York Times, January 30, 2008 — KANSAS CITY, Mo.—When a Starbucks moved in next door, the coffee fanatics who run the Broadway Cafe trembled. Sure, they roasted their own beans and served up handmade espresso drinks to a loyal clientele. But would it be enough to fight off a corporate behemoth? That was nearly 10 years ago, and now the results are in: the Starbucks is about to shut down.
Seekingalpha.com, January 9, 2008 — I've used Starbucks' (SBUX) business strategy as a way to discuss the Trial and Error Economy (here and here). I'm not, by any means, the world's greatest expert on the company, but it provides a great vehicle for teaching about corporate strategy. Now, according to the Wall Street Journal, McDonald's (MCD) will sell premium coffee drinks made by baristas at most of their 14,000 stores.
How should Starbucks react to the McDonald's threat? Here are some ways:
1. Do nothing. Best implemented with one's nose high in the air, saying that Starbucks customers would never buy coffee at McDonald's. Would work very well for three to six months. Ignores the reality that Starbucks' recent growth has come not from Volvo-driving college grads, but from... continue reading
Advertising Age, January 8, 2008 — Starbucks Coffee Co. has returned its No. 1 barista, founder Howard Schultz, to his former role of chief executive to perk up its sales and stock price.
Wall Street Journal, January 7, 2008 — This fall, a McDonald's here added a position to its crew: barista.
McDonald's is setting out to poach Starbucks customers with the biggest addition to its menu in 30 years. Starting this year, the company's nearly 14,000 U.S. locations will install coffee bars with "baristas" serving cappuccinos, lattes, mochas and the Frappe, similar to Starbucks' ice-blended Frappuccino.
Internal documents from 2007 say the program, which also will add smoothies and bottled beverages, will add $1 billion to McDonald's annual sales of $21.6 billion.
Fast Company, May 1, 2007 — There were compelling reasons to send Juan Valdez off to the old folks home for advertising's ex-celebs. The fictional coffee-growing icon had been featured in ads for decades, helping establish "100% Colombian coffee" as a global brand. But Juan wasn't aging well. Recent TV spots showed him surfing with his faithful mule, Conchita, and popping up in kitchen pantries. While humorous, the ads reinforced the notion that Juan had become a bit of a joke.
BusinessWeek, April 9, 2007 — On Apr. 3, starbucks launches a pair of confections called Dulce de Leche Latte and Dulce de Leche Frappuccino. A 16-oz. Grande latte has a robust 440 calories (about the same as two packages of M&M's) and costs about $4.50 in New York City—or about three times as much as McDonald's (MCD ) most expensive premium coffee. Starbucks Corp. (SBUX ) describes its latest concoctions, which took 18 months to perfect, this way: "Topped with whipped cream and a dusting of toffee sprinkles, Starbucks' version of this traditional delicacy is a luxurious tasty treat."
Wall Street Journal, April 3, 2007 — Can Starbucks Corp. keep up its growth? That's a question many investors were asking even before a recently leaked memo from Chairman Howard Schultz raised concerns about whether the company was diluting its brand. After all, the stores seem to dot every block in New York City, and the company still plans to open 10,000 new stores world-wide over the next four years, bringing the total number to more than 23,000.
Wall Street Journal, March 16, 2007 — A new bar at Hong Kong's international airport serves up as much Heineken NV branding as it does beer. Bar stools reflecting green neon match the Heineken-logo T-shirts for sale. TV screens show Heineken ads and sports events sponsored by the company. While the bar sells other beers as well as wine and spirits, only Heineken-owned brands are available on tap.
Brandweek, March 5, 2007 — By now most of us have heard about the missive from Starbucks' founder and chairman Howard Schultz delineating his take on the coffee chain's current woes
Advertising Age, March 5, 2007 — In the wake of the Starbucks "Memo Shot Round the World" from Chairman Howard Shultz on the looming commoditization of its brand, we asked the experts how they would restore the mythical Starbucks Experience.
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