An Introduction to the Coffee Wars; Starbucks and Mcdonald's Essay

The Coffee Wars Starbucks (SBUX) vs. McDonald's (MCD)Posted Feb 12th 2008 215PM by Steven HalpernSteven Halpern RSS FeedFiled under Starbucks (SBUX), Newsletters, McDonald's (MCD), Stocks to BuyEmailMore"I am quite confident that business students in the future will be reading case studies on the battle between Starbucks (NASDAQ SBUX) and McDonald's (NYSE MCD)," says value investor Charles Mizrahi.In his Hidden Values Alert, the advisor explains, "This is a classic case of a castle with a wide moat coming under attack because the attacker believes it has caught the duke napping." Here, Mizrahi shares a fascinating over the "Coffee War.""As background, in 1982, Starbucks had five retail stores and was selling coffee to restaurants in Seattle, Washington. It was during that year that Howard Schultz signed on to manage retail sales and marketing. After traveling to Italy, he convinced the owners of Starbucks to open a coffee bar."It was a huge success. One year after going public in 1992, Starbucks had 275 locations. Today, Starbucks is the leading retailer and roaster of coffee in the world. There are nearly 7,000 Starbucks stores in the U.S. and almost 1,800 in international markets."Schultz's genius is that he took a commodity (a cup of coffee), made it a brand, and was able to charge three times its market price. His vision was to make Starbucks serve as the 'third place' people gather, between home and work."As the company's expansion swept the U.S., Starbucks also began adding drive-through window service and selling breakfast sandwiches. By doing this, Starbucks encroached on McDonald's territory, and it was only a matter of time before 'war' would be declared."Before attacking Starbucks head-on, McDonald's scoped out the marketplace, saw what needed to be done, and then began executing. In 2003, McDonald's initiated a turnaround strategy, remodeling its stores, moving toward oversized chairs and softer lighting and colors, and even installed wireless Internet."In 2005, McDonald's began taste testing its coffee and in February 2007, Consumer Reports magazine...

Comments

Post a Comment

Popular posts from this blog

Character Analysis of Basil Hallward in The Picture of Dorian Gray, a Novel by Oscar Wilde Essay

The main character in The Picture of Dorian Gray, Dorian, is a man too easily influenced by his surroundings. He is quoted as saying, Basil Hallward is what I think I am Lord Henry is what the world thinks me Dorian is what I would like to bein other ages, perhaps (Wilde). This comparison falls in line with the moral of the story because Dorian is stuck with eternal youth and beauty even though he has a wicked soul. This causes different views of him by people who observe his daily life. Dorian is a sponge throughout the novel that absorbs everything and allows it to shape his personality, morals, and actions. Dorian Gray takes influence from Lord Henry, Basil Hallward, and the culture of society during which the novel was written. Lord Henry is the epitome of a wealthy, hedonistic gentleman seeking only pleasure, with little regard to cost or consequence. Lord Henry Wotton outwardly propounds hedonism, but it is his extreme egotism that drives him to manipulate both Basil Hallward a
Read more

An Analysis of the Character of Chichikov in the Poem, Dead Souls by Nikolai Gogol Essay

Dead Souls takes place in the Russia of the late 1800s, where, unlike in America, one must be born into a prosperous family in order to have opportunities. The main character, Chichikov, is clever enough to develop a scheme in which he can rise from being a petty clerk to a respected landowner. In order to do this, Chichikov moves into a new town, pretending to already be a landowner, and begins a quest to buy the names of dead serfs who have not yet been officially reported dead. Each person that Chichkov presents this offer to has a different reaction, starting with the shy and introverted Manilov. Though he does not understand Chichikov's need for the names of these dead serfs, Manilov is a character that is so desperate for company that it does not take any effort to trick him into selling his dead souls cheaply. However, as Chichikov continues his journey, he starts to deal with more clever landowners who become suspicious of his scheme. Chichikov finds that the townsmen know
Read more

A Literary Analysis of the Third Twin by Ken Follett Essay

The Third TwinThe Third Twin by Ken Follett is a type of mystery book. It makes you look at different aspects of the story. When you think you know whats happening it is not always what you think.Dr. Jeannie Ferrami, a scientist funded by a university who is doing a study on twins is one of the main characters in the story. Jeannie Ferrami is tall with long brown hair and is also very athletic. Steve Logan a student at another college is also a very important character in the story. Berrington Jones the head of the college funds Dr. Jeannie Ferrami until Jeannie discovers something Berrington didnt want her to know. Ricky Phillips Berringtons son is a twin just and he plays a small part but with a big impact on the story. Lisa Miller who is Jeannies best friend comes early into the story playing a very dramatic role, another small character is Dennis Pinker one of the twins in the story who is a murderer and is also being studied He is one of Steve Logans twin brothers.Lisa Miller and
Read more