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Starbucks Faces Existential Crisis In Downturn

I had a "duh!' moment reading this story. "A major problem for Starbucks is that, these days, you can get a good cup of coffee at a Chevron station," Dan Mitchell writes. Starbucks growth, he says, was possible because of the dearth of good coffee elsewhere. I never thought of it quite that way and, now that I've thought of it, I still don't.

The operative word is "can," is it not? I don't know about you, but I'm not at the point where I'm sure I'm going to get a consistently good cup of joe at every Chevron station I walk into. Sure, some folks like McDonald's or Dunkin Donuts, but has the overall quality and consistency of coffee improved that much since Starbucks starting popping up everywhere?

"Experience" -- store ambience, personalized service, etc. -- is a tough sell during a deep recession, Mitchell says, so Schultz is now trying to make the Starbucks experience a "value" proposition. He seems to be pulling it off, but faces a tough year ahead in trying to recast Starbucks as affordable without harming its "specialness"; cutting costs while investing in growth; fending off McDonald's and Dunkin' Donuts, and persuading people to drink Via instant coffee. True that.

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