Article:http://www.forbes.com/feeds/ap/2009/04/15/ap6294709.html
This article describes in length the reason for the recent drop in shares for Starbucks. The new McDonalds coffee campaign could significantly hurt Starbucks so experts are telling share holders to sell stock. This is very sad to hear about Starbucks because Starbucks has always been such a signature American tradition, but I guess with the new recession, people really don’t have an option anymore. The difference in prices for McDonald’s coffee and Starbucks is about 40 to 45 cents. That is enough to send people to McDonalds. I really don’t agree with Starbucks for doing this. McDonald’s has always been the number one fast food restaurant for Americans, and now they are choosing to compete with the number one coffee retailer. The article suggests that Starbucks addresses this new problem directly. There could potentially be a quality gap, but like I said earlier, in these times, it really doesn’t matter to consumers. This issue is very important and serious so that is why I chose to address it. Time and time again, the issue of Starbuck’s prices comes up. It really is hard for this kind of business to survive in a time like this, because for most, coffee is an optional luxury, especially high quality Starbucks coffee. This new campaign for McDonalds will be key factor in sustaining U.S. same-store sales momentum according to the article which will be very good for our economy, so I do have mixed feelings on the issue. I guess since spending so much quality time with Starbucks recently, writing papers and researching, I have special place in my heart for the corporation. I hope both companies will prevail and the economy will improve, obviously. That would be very hard, obviously, but I believe with the new instant coffee campaign for Starbucks and new similar ones, Starbucks will be fine.
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I feel bad for Starbucks! What did they ever do to McDonalds for them to start competing with eachother. I agree that because of the bad economic times we are having that McDonalds is more reasonable, but my question is why is mickey D's doing this? Do they really want to start competing with Starbucks?? McDonalds has enough trademark products, it doesn't need to take Starbucks most prominent seller. It will be interesting to see what happens with both companies. Starbucks has other popular and loved drinks so perhaps it won't hurt them too bad. And as you stated, the quality is obviously going to be way different but in these hard times, people will sacrifice. But i still think Starbucks has loyal customers who won't let it fall face down. Starbucks is a popular and thriving company who will manage even while competing with McDonalds. I havn't heard about the instant coffee campaign but i'm sure Starbucks will make it the "it" thing to do!
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