Starbucks vs. McDonald's

I don't drink coffee. I don't like the taste and, despite many explanations from my coffee drinking friends and relatives, I don't understand why I should bother "acquiring" the taste. I drink what tastes good the first time.

I start with that disclaimer to explain that I'm not promoting my coffee preference biases in this post about Starbucks and McDonald's coffee wars. So please don't send me hate mail or try to convince me that your favorite coffee outlet is the best. For now, I'm agnostic.

Adam Hartung has an interesting blog that focuses on helping businesses "innovate to achieve real growth." He offers some excellent analysis of the current problems being faced by well-known companies, including Starbucks.

In a recent post he stated, "Starbucks has gifted McDonald's by choosing to fight them head-on right at McDonald's strengths - operational consistency and low price."

McDonald's is strong where Starbucks is weak (consistency, low price). However, Starbucks was (past tense) also strong where McDonald's was weak (service, customer experience, status, etc.).

Instead of continuing to do what they do well, and ignoring what they do poorly, Starbucks tried to fix their weaknesses, become well-rounded, and act more like McDonald's. As Hartung points out, this did not lead to success. Instead, Starbucks is now playing a game that McDonald's can dominate.

This is a classic problem that we all face when we make strategic decisions about our lives, our work and our businesses. We want to be perfect. We want to do everything well. We want to make everyone happy. But that is not possible.

Hopefully Starbucks can rediscover their strengths and the weaknesses that inevitably go along with them. They should charge high prices (even if some people think it is ridiculous), focus on social responsibility (even if some people think they are self-righteous), create a great atmosphere (even if some people drive-thru), and promote the luxurious experience that their products and service provide (even if it excludes some people because it costs a lot to have that experience).

In other words, they need to flaunt their weaknesses, instead of trying to fix them. They need to get comfortable with who they are and who they are not. They need to stop trying to be like everyone else and be themselves.

But if they don't, you won't hear me complaining because then my wife will get her coffee from McDonald's and we'll be able to afford to send our children to college. So maybe I'm not agnostic, just cheap.

Comments

[Joseph Joel Sherman]

Dave and Adam
Great analysis. Starbucks has cheapened their image. Where will people go who want to create a truly memorable gourmet coffee experience? Where will people go to connect in a place they feel is real? This opens an opportunity for independently owned coffee shops to emerge in the space left behind. Small shops can create an atmosphere with flavor and style. Independently owned shops with a style to their own have the opportunity to design their own space, and build a unique following. It will be hard to beat Starbucks on price and speed. Rather than catering to the masses, a small shop can cater to a local tribe. It will not be for everyone, but it will be perfect for the people that it is meant for.

[Adam]

I agree with just about everything in your post. However, you question why try to acquire a taste for coffee when it didn't tickle your pallet the first time. I'm quite certain that you were drinking less than quality coffee. On your next visit to WI, I'll connect with a personalized roast from NE Wisconsin, the best coffee on the planet!