Starbucks Essay

727 WordsMar 28, 20093 Pages
COMPETITION: According to the case study in 1996, Supermarkets were the main source of competition for Starbucks. The reason for this was the convenience supermarkets offered as they saved a specific ‘’Starbucks trip’’. Today Fast Food chains such as: Burger King, Dunkin Dounuts and McDonalds are Starbucks greatest source of competition. McDonalds: McDonalds especially have been really starting to put clouds in Starbucks coffee. McDonalds have really been riding the economic downturn really well, sales revenues have increased dramatically over the past few years, but horrifyingly for Starbucks, their coffee sales have seen a 21% increase in 2008 alone. Starbucks has refashioned itself to offer value meals. For the first time ever Starbucks has introduced a value meal: Feb 9th this year Starbucks introduced ‘Value Meal Deals’. A coffee and breakfast for $3.95 (Discount of up to 24%). This move could be in direct response to the recent McDonalds Billboard campaign: $4 is dumb. This campaign caused considerable damage for Starbucks. It cost Starbucks millions to retrain staff to point out that, 90% of the beverages they sell cost under $4. Starbucks has almost become known as the home of the $4 coffee. It has been tagged as expensive, and customers would be dumb to pay such extortionate prices. No the image any company would like during a recession! McDonalds look likely to steal many of Starbucks customers. Many taste test across America have shown that McDonalds coffee is better quality than Starbucks. On that note we would love some volunteers to compete in our taste test. It is evident that Starbucks is reacting to the competition McDonalds is giving them. They have introduced value meals, breakfasts and retrained staff. Starbucks needs to be careful now not to allow itself to ‘sink’ down the fast food lane. Starbucks needs

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