Monday, January 07, 2008

The coffee wars

The winter break is over. The time for people to go back to their everyday duties has come, and I dare to predict that for the next few days some people out there will be suffering what is scientifically known as the post-vacations syndrome, which is nothing more than the period of time that takes to the people's mind to switch from leisure mode to work mode. Going back to routine is a must, and it can't be stopped in any way, not even by playing bizarre tricks such as gluing one's hand to the bed to avoid going to school, just as some little rascal did somewhere in Mexico according to a local newspaper.

That's the bad news. The good news is for companies whose philosophy is to serve customers in times when they are stressed and seek a break in their busy lives. I would argue that one of those helping companies is Starbucks, which is really committed to providing the customer with a relaxing experience in each of their stores, by providing high quality beverages and a peaceful, comfortable atmosphere. That's why Starbucks has been successful in exporting its business model to several countries all around the globe.

But hey, why going to Starbucks if people can go to McDonald's too? It is no secret that McDonald's' coffee has been highly ranked among coffee drinkers for many years, equaling (and sometimes defeating) the quality of Starbucks' basic beverages, like americano or espresso. That's why McDonald's, with a lot of bravery and a lot of money, decided to launch their own line of gourmet drinks in the US, which will supposedly include capuccinos and lattes. The system will be more or less the same as Starbucks' model, where a barista will prepare the drinks in front of their customers, with a high degree of customization. This is the beginning of a face-to-face struggle against Starbucks to take over the gourmet coffee market.

McDonald's is confident to be a good competitor in Starbucks' territory, as their economies of scale and convenience will push people to buy coffee from McDonalds. What McDonald's is not considering is that Starbucks' business is not selling coffee. Their core business is providing customers with a relaxing experience, where people sit in a comfortable couch, relax, have a nice conversation, have a sip of their beverage, smell the slight coffee odor that invades the atmosphere, and have a nice time. Very different from a McDonald's restaurant, where the typical experience includes the smell of fries, hamburgers and ketchup, children yelling and running around the place with the toys they just got from their Happy Meals, metal chairs attached to the floor, and the sound of trays pushing the door of the trashcans. Can you picture yourself having a relaxing experience under those conditions?

There is no doubt that McDonald's will increase its revenue from their new line of products, but I hardly picture it as a threat to Starbucks. At the end of the day, customers will have their own reasons to chose one or the other... or none.

With some information from msnbc.


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