case
Journal of Case Research in Business and Economics
Coffee Wars - The Big Three: Starbucks,
McDonald’s and Dunkin’ Donuts
Michael G. Brizek
South Carolina State University
ABSTRACT
Coffee – for some, a morning cannot begin without it. Many daily rituals include it. It can be seductive, enticing, and addictive. Hard-core coffee drinkers pride themselves on their coffee palettes, their refined ability to distinguish “good” coffee from “bad.” And once a diehard coffee drinker finds his favorite blend, mountains sometimes must be moved to entice him to deviate from it.
But, for decades, the idea of “good” coffee was synonymous with “expensive.” If a consumer wanted to try the best blends or flavors, he had to be prepared to pay for it. Wallets were emptied, change was gathered, and the coffee-hooked consumer was walking into the coffeehouse ready and quite willing to hand over $4 to a smiling barista. Perhaps it was true that the coffee was the best to be offered. Perhaps the ambience and cozy atmosphere was a drawing factor. Perhaps it was the label that was associated with it, the feeling that he now belonged to an upscale club or group that not everyone else was entitled to join. Whatever the draw, the consumer continued to come back; day after day, week after week.
Then something happened. The economy began spiraling downward, prices rose, and suddenly, a $4 cup of coffee was not quite as attractive as it once had been. Enter: The Coffee
Wars. Premium coffee shops like Starbucks were suddenly faced with competition from fast food upstarts like McDonald’s and Dunkin’ Donuts, operations that were abruptly breaking into the premium coffee industry with “cheaper, but almost as good, coffees.” Life as the coffeedrinker once knew it had changed forever. For the better? That question remains unanswered as the war continues. But one fact is for certain; the battlefield will never be the same again.
Keywords: economic recession, competition,
Coffee Wars - The Big Three: Starbucks,
McDonald’s and Dunkin’ Donuts
Michael G. Brizek
South Carolina State University
ABSTRACT
Coffee – for some, a morning cannot begin without it. Many daily rituals include it. It can be seductive, enticing, and addictive. Hard-core coffee drinkers pride themselves on their coffee palettes, their refined ability to distinguish “good” coffee from “bad.” And once a diehard coffee drinker finds his favorite blend, mountains sometimes must be moved to entice him to deviate from it.
But, for decades, the idea of “good” coffee was synonymous with “expensive.” If a consumer wanted to try the best blends or flavors, he had to be prepared to pay for it. Wallets were emptied, change was gathered, and the coffee-hooked consumer was walking into the coffeehouse ready and quite willing to hand over $4 to a smiling barista. Perhaps it was true that the coffee was the best to be offered. Perhaps the ambience and cozy atmosphere was a drawing factor. Perhaps it was the label that was associated with it, the feeling that he now belonged to an upscale club or group that not everyone else was entitled to join. Whatever the draw, the consumer continued to come back; day after day, week after week.
Then something happened. The economy began spiraling downward, prices rose, and suddenly, a $4 cup of coffee was not quite as attractive as it once had been. Enter: The Coffee
Wars. Premium coffee shops like Starbucks were suddenly faced with competition from fast food upstarts like McDonald’s and Dunkin’ Donuts, operations that were abruptly breaking into the premium coffee industry with “cheaper, but almost as good, coffees.” Life as the coffeedrinker once knew it had changed forever. For the better? That question remains unanswered as the war continues. But one fact is for certain; the battlefield will never be the same again.
Keywords: economic recession, competition,
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