Filed under: International markets, Other issues, Products and services, Management, Consumer experience, Rants and raves, Competitive strategy, Microsoft (MSFT), Apple Inc (AAPL), Starbucks (SBUX), McDonald’s (MCD), Adobe Systems (ADBE), Serious Money, Commodities

We have seen this play before, and there are two scenarios as to how it could end. Starbucks Corporation (NASDAQ: SBUX) is being challenged like never before, having saturated the market place in some locations it is now facing the challenges of selling expensive coffee in a slowing economy.

Would you rather pay $4 for a cup of coffee or a gallon of gas? You can find cheaper coffee but you have few options to find cheaper fuel. Amid the already difficult operating environment Starbucks is faced with competition from the largest restaurant chain in the world, McDonald’s Corporation (NYSE: MCD). McDonald’s is looking to steal its morning thunder with competitive offerings at a far lower pricing structure. The threat is very real no matter what spin Starbucks puts on it.

This brings to mind two similar situations both involving Microsoft Corporation (NASDAQ: MSFT) and past competitors. Early on there were two word processing programs that together probably had 90% market share. Those were Wordperfect and Wordstar. Both of them were fine programs offering strong features, and now they are nowhere. Microsoft displaced both of them with MS-Word integrated with their Office suite of products, and is now king.

Continue reading Serious Money: Starbucks vs McDonalds: an old story

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This entry was posted on Friday, April 4th, 2008 at 1:11 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.