A Commodity of Errors

McDonalds is now Starbucks’ main competitor and Starbucks has nobody to blame but themselves. By opening up so many stores and introducing so many “frou-frou” drinks that they commodified the coffee buying experience, Starbucks gutted the value proposition of buying an espresso drink at their stores and, in so doing, created a monster in their own competitive space by inviting the king of commodified food service operaters – McDonalds – into the business of selling coffee. Starbucks has gone for the big middle ground and given McDonalds a new lease on life in becoming the scrappy underdog in the battle for the palettes of middle-america. Good job, Starbucks.

The wonderful thing about all of this is that Starbucks has made plenty of room for the so called “third wave” of coffee to gain a foothold in the marketplace. The commodification process Starbucks has undergone has allowed other shops to compete on the quality of their product. While Starbucks’ focus in making you an espresso drink is to get it in your hands as fast as they can, others are focussing on making sure that the beverage you are holding in your hand is of a certain quality: that the money you just shelled out is reflected in the integrity of the drink. They are bringing the craft back to the  espresso bar. Good job, Starbucks.

In honor of the announcement that Starbucks will be closing 600 stores nationwide, a list of posts on Starbucks here at Dan Markham dot net.

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