Related to last night’s Starbucks discussion, Consumer Reports rated McDonald’s coffee better than those of higher end chains. The business model is different but McDonald’s has to be considered a major threat and is chipping away at Starbucks coffee market share. Starbucks stock has also declined over the past 12 months. Coffee is its core competency and Starbucks may have diluted its brand. Interesting to see what Schultz’s internal memo will spark.
A couple links to articles about consumer reaction and coffee survey results:
http://abcnews.go.com/GMA/Business/story?id=2927462&page=1
http://www.msnbc.msn.com/id/16951509/
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Even if McDonald's coffee is rated better than Starbucks, I don't think it's a equal comparison in terms Branding. I don't see them as direct competitors, since their target markets are very different. In fact, McDonald's at one time had tried to get the rights to sell Starbucks Coffee in their restaurants and was consequently turned down by Starbucks since they felt that McDonald's customer base did not match Starbuck's target market. I doubt McDonald's is ever going to be able to sell cappacinos at $4 a cup, so I think Starbucks has nothing to worry about.
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