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fee, and that's why Starbucks has that crazy variety. Maybe he cares more about the product, and why should he negle

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Free WIFI is definitely a turn on as far the ratio of third place and a cup of coffee quality while its subjective to what the user demands. There are many independent coffee shops competing with starbucks, of course some indy's are just as bad even if they produce a great cup of joe, they have bad customer service or don't understand certain amenities or pricing that they should have.

For that reason, starbucks still seems to survive even with a bad cup of coffee as a third place aka a hang out and talk environment. Mcdonalds does have great competition and is probably trying to compete for the more budget minded consumer who make want a splurge but not as much as starbucks. They probably in my opinion won't take a lot away from starbucks compared to the indy's but may make folks think twice especially in that there are more mcdonalds than starbucks even in areas without a starbucks.


I disagree with Jim's post - Starbucks success wasn't because of the "great" cup of coffee. There were lots of companies offering high end cups of coffee but Starbucks created an experience beyond the cup - they offered a third space that no one else was offering and that was the first of its kind. This is what took starbucks to the top. Think about Starbucks and what comes to your mind first. It's not the cup of coffee. It's not the fancy high end names. It's the dim lighting with the cozy work spaces. It's the lamps on the table and the comfortable seats. It's the third space - and they forgot their why. If they had improved the quality of their third space, if they had added even more comfortable seats and more technologically advanced work spaces AND FREE WIFI - they wouldn't be worrying about McDonald's "better" coffee offered at lower prices.


I like articles like this. They provide a different perspective I never would have considered. But,..

Agreed, "Why" defines product strategies and helps to prevent companies from fighting the wrong fight. It's far too easy to chase the wrong tail, rather than extend their core strengths. Particularly in this economy / job market.

But as I recall, Starbucks was about a great cup of coffee at a time when high disposable income fueled a consumer thirst for something better than 7-11 and AmPm coffee. "Espresso ? Dry non-fat cap ? Sure, its only money. Ill take three."

The "third space" developed much later, and in my opinion hurt the brand. When Starbucks was the only game in town, their coffee was the Why for their business and my patronage. Faced with growing competition they reached for "lifestyle marketing" to justify a $5 latte, and lost their Why. It was distracting, took focus off of a great cup of coffee. Any one else remember when their espresso was handmade ?

Silly me, I thought free ATT WiFi was the result of cost analysis on a load reduction of their 3G network vs. a loss of WiFi revenue. Is free WiFi a value add ? Sure it is. But just as mints on the pillow dont matter if the sheets are dirty, free WiFi only goes so far if your coffee is crap.

I feel you may have over analyzed this.

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Well sure the kind of lost their Why. But how can you leave your Why untouched when you are worrying about shareholders value? I mean, there is a constant pressure for public companies to evolve, to come up with new ideas, to be different, to maximize return on investment..

I think that finding that balance is the real deal.

Mike Johnson

I can think of a dozen other companies like this off the top of my head. Once you hit a certain point, it is all about the money. . .but that is why we are a capitalistic country some would say. . .and they all have huge lobbyists in Washington DC that influence our politicians with their votes. It is very depressing.

Personally, I would never want to be a part of something that big. I think that if I saw that coming I would sell it and start over with the intentions of what my company business model is.

Jason Cohen

You say Starbucks lost their way, but couldn't you instead say they evolved?

Sometimes your original assumptions or values hold you back and change is good. How can you tell the difference?

Patrick Wallace

Wow, what a great post. I guess sometimes we all need to remember that to soar with the eagles, we need to stop trotting with the turkeys.

Jerry Kennedy


Great post! I used to love going to Starbucks, but when every other mom & pop coffee shop started offering free WiFi and Starbucks was the only hold-out, I shifted my habit. Of course, I get a lot of funny looks when I order a "venti" coffee at the other places, but they eventually figure out what I mean. :)


Mars Dorian

Hey Simon, I understand your opinion. But Howard Schultz is obsessed with coffee, and that's why Starbucks has that crazy variety. Maybe he cares more about the product, and why should he neglect that ?

Sure, the company is playing it safe now (like most big companies that were once innovative ), but that's because they are not pushing their edges anymore.

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