1) Starbucks’ product is not only its premium beverages and food, but also its comfortable atmosphere. Starbucks has created a “third place” between home and work where people can go to relax and hang out with friends, read, work on their laptops, or just sit in a comfortable chair quietly while enjoying a premium beverage. Their actual product line includes more than 30 blends or coffees, handcrafted espresso and blended beverages, Tazo teas, bottled Frappuccino drinks, and also Starbucks DoubleShot. Starbucks also offers home espresso machines, coffee brewers and grinders, freshly baked pastries, premium ice cream, premium chocolate, sandwiches, salad, coffee mugs and accessories, CDs, and gifts. Starbucks has also partnered with other companies to distribute its products in supermarkets, warehouse clubs and institutional food services. It also has partnered with Jim Beam to manufacture a starbucks liqueur.
2) In competing with Starbucks for coffee sales, McDonalds has the advantage of being able to offer a lower priced coffee that is most likely of a lesser quality. People generally have lower expectations of McDonalds than Starbucks since most people go there for low-priced, decently tasting food and beverage options. Also, McDonalds has the advantage of being known for its fast service and convenience, whereas Starbucks is more of an experience. If someone just needed to grab a quick and large cup of coffee before work, they would be more apt to head to their local McDonalds. Another advantage that McDonalds has over Starbucks is that McDonalds might be more attractive to a coffee drinker who has children. Children can enjoy a happy meal with toy and play in the McDonald’s play area while their parent enjoys their coffee in peace.
3) There have been a few changes in society that has helped Starbucks become successful. First, in the U.S. there has been an increase in the amount of coffee drinking in the out-of-home...