This Business Week story explores the McDonald's decision to sell upscale coffee at a lower price than Starbucks.
It won't work.
The coffee is only an ancillary part of the Starbucks experience. Starbucks is a faux European coffeehouse. It is a combination living room and town square; a corner pub without the drunks. You can work on a novel or a presentation while sitting in Starbucks. You can waste time without appearing to do so. Being there is respectable. Plus it is a great people watching place.
The coffee is okay - I think Dunkin Donuts coffee is better - but that's not why people go to Starbucks. The coffee is only a cover story. They go to Starbucks to escape to an area that has the trappings of civilization. It is the poor person's version of a gentleman's club.
McDonald's won't be able to match that.
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