The McDonaldisation of Starbucks

Starbucks, the world's best known coffee chain is in trouble and some of it has to do with McDonalds. Diluting the 'coffee experience' (switching from hand pulled expresso machines to the automatic ones, diminishing the spectacle of coffee making) has alienated some customers. Having recorded its first ever year on year decline in customer visits in America, Starbucks by bringing back Howard Schultz is trying the stem the tide.

Starbuck's travails can be attributed to,

1. Overexpansion in a saturated market, no innovative products and services compounded by poor control over its ever expanding network of cafes.


2. Price rise prompted by rise in costs of food commodities


3. Threat from McDonald's plan to add Starbucks style coffee bars to nearly 1400 of its American restaurants.

Read the Economist article titled, 'Coffee Wars' here.

Pic : http://www.economist.com