Who wins the coffee war?
It is quite ironic that McDonald's and Dunkin Donut entering the comfort zone of Starbucks was apparently going to slow down their sales but it turned to be the other way round where they started to sabotage one another without denting Starbucks in general.
When the doughnut giant started to sell brewed coffees, lattes, cappuccino it was estimated that it would directly rupture Starbucks who is the leading coffee chain since decades. Five years back, McDonald's also thought to come up front and started their premium coffee line known as McCafe. This was not as big a threat as Mickey D's entrance in the business which was termed as a game changer for Starbucks.
The switch was expected in the time of the global recession. We are aware about the brutality of that time and considering the economics of the era it was certain that to overcome the global financial crisis. Since the unemployment rate accelerated and people had limited incomes hence they preferred to switch from Starbucks which has a fairly expensive and fancy menu to McDonalds or Dunkin' Donuts cheaper coffee menu.
Although coffee is one thing that you desperately need to fix your morning up. To give it that kick start that revitalizes your day hence avoiding it is not an option. Hence one can switch to alternate options but one cannot completely let go. McDonalds and Dunkin Donuts whose target audience is primarily the average middle class or the working class saw that there was an opportunity waiting for them. In the fast five years it has been proved that this was a wrong initiate as their wisdom was proved wrong.
This was proved when Starbucks published its report for the quarter in which it claimed that the company experienced a great boost in profit with an overall increase of 11% for the same quarter the previous year.
One reason behind Starbucks immense success is that it is a class war in general. Dunkin Donut or any other brand no matter how hard they try can never become a popular coffee destination the way Starbucks is. Selling coffee might be easy for them but replicating their menu is a hard task in general. .
You would be astonished to know that Dunkin Donut earns more from its coffee and other beverages sale than doughnuts itself.
Hence it is no surprise that McDonald's stocks and Dunkin Donuts stocks are battling among themselves and hence have not even hampered Starbuck sales at all.
When the doughnut giant started to sell brewed coffees, lattes, cappuccino it was estimated that it would directly rupture Starbucks who is the leading coffee chain since decades. Five years back, McDonald's also thought to come up front and started their premium coffee line known as McCafe. This was not as big a threat as Mickey D's entrance in the business which was termed as a game changer for Starbucks.
The switch was expected in the time of the global recession. We are aware about the brutality of that time and considering the economics of the era it was certain that to overcome the global financial crisis. Since the unemployment rate accelerated and people had limited incomes hence they preferred to switch from Starbucks which has a fairly expensive and fancy menu to McDonalds or Dunkin' Donuts cheaper coffee menu.
Although coffee is one thing that you desperately need to fix your morning up. To give it that kick start that revitalizes your day hence avoiding it is not an option. Hence one can switch to alternate options but one cannot completely let go. McDonalds and Dunkin Donuts whose target audience is primarily the average middle class or the working class saw that there was an opportunity waiting for them. In the fast five years it has been proved that this was a wrong initiate as their wisdom was proved wrong.
This was proved when Starbucks published its report for the quarter in which it claimed that the company experienced a great boost in profit with an overall increase of 11% for the same quarter the previous year.
One reason behind Starbucks immense success is that it is a class war in general. Dunkin Donut or any other brand no matter how hard they try can never become a popular coffee destination the way Starbucks is. Selling coffee might be easy for them but replicating their menu is a hard task in general. .
You would be astonished to know that Dunkin Donut earns more from its coffee and other beverages sale than doughnuts itself.
Hence it is no surprise that McDonald's stocks and Dunkin Donuts stocks are battling among themselves and hence have not even hampered Starbuck sales at all.
