Starbucks value menu: McBucks is here

Sarah Gilbert — Tue, 03 Feb 2009 14:15:00 EST

Filed under: Starbucks (SBUX), McDonald's (MCD)

In a bid to make quick-service restaurant writers blare the "predictable" alarm, Starbucks Corp. (NASDAQ: SBUX) has again moved into McDonald's (NYSE: MCD) territory with what Howard Schulz calls "breakfast pairings at attractive prices." I'm pretty sure that when I turn to our desk reference guide of corporate sayings, that is the definition for "value menu."

Perhaps they don't invite me to press briefings any more, because they knew that when Howard said this in a talk to investors last week, I would have shouted something about "differentiation" and "McDonald's" and "not." Starbucks is apparently revealing more details about its value menu this week, when we will learn if the meal deals -- I mean, "breakfast pairings" -- are about the same price as a McDonald's McCafe coffee drink matched up with, say, a sausage McMuffin or something.

This couldn't be a more obvious ploy to attract customers who have been wooed away from Starbucks by McDonald's lower prices and less pretension, not to mention what one customer called the "richer-tasting" drinks. Which is, I believe, a euphemism for "more like a milkshake and less like a cup of coffee." While it's admirable to target customers with better prices in this economy, the clear struggle for McDonald's customers has me scratching my head. Were these really ever the appropriate customer base for Starbucks in the first place? I believe this is what had Starbucks pointed in the wrong direction for the past few years: the endless and meaningless struggle to be all beverages and foods to all people.

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Starbucks value menu: McBucks is here originally appeared on BloggingStocks on Tue, 03 Feb 2009 14:15:00 EST. Please see our terms for use of feeds.

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Starbucks chairman still passionate

Georges Yared — Fri, 23 Feb 2007 19:30:00 EST

Filed under: Forecasts, Newspapers, Magazines, Internet, Blogs, Competitive Strategy, Starbucks (SBUX), Columns, McDonald's (MCD), Entrepreneurs

There is a report out that Howard Schultz, Chairman of Starbucks Corp. (NASDAQ:SBUX) wrote an internal e-mail to the company's executives basically warning them about complacency. The text of his e-mail sent shivers through the ranks at Starbucks, but investors should be applauding.

I wrote an earlier article about Starbucks becoming bigger than McDonald's Corp. (NYSE:MCD) in the years to come. Ray Kroc, the legendary founder of McDonald's, had a similar reputation as Howard Schultz. Both men could easily have gone to the golf course and been clipping coupons, but their passion and energy is boundless. Kroc was known to show up at any McDonald's across the country unannounced and start interviewing dining customers. He wanted to know what they thought, what they liked and more importantly, what they disliked about McDonald's.

Howard Schultz is in essence doing the same thing. His memo warned company management about the competition creeping up and catching Starbucks. He also warned about the commoditization of the brand and the service. There is no room for this at Starbucks.

Schultz mentioned that even though the company has grown from 1,000 store units to now 13,000, this is no time to be complacent or take the Starbucks customer for granted. This type of leadership is what will propel Starbucks to their goal of 40,000 store units worldwide. It's also the kind of leadership that will allow Starbucks to achieve that goal with excellence.

Georges Yared is the author of recently released books "Baby Boomer Investing...Where do we go from here?" and "Stop Losing Money Today" For more info go to http://www.georgesyared.com

Starbucks chairman still passionate originally appeared on BloggingStocks on Fri, 23 Feb 2007 19:30:00 EST. Please see our terms for use of feeds.

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