Starbucks Missing the Point on Their Business Challenges

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Starbucks Isn't Looking In the Right Place for Answers

CEO Howard Schultz told shareholders at the annual stockholders meeting that the company will not only survive, but thrive by changing their message and their image.

“Starbucks Coffee Co. will not only survive but we will succeed during this environment. I promise you that."

According to Business Week , Starbucks CEO Schultz plans to dispel the myth that all Starbucks coffee drinks cost $4. This "perception" (which my wallet tells me is true!) has helped competitors like McDonald's Corp. break into the espresso beverage market.

I stopped going to Starbucks for morning coffee months ago when I moved -- to an area where I have a Starbucks with crappy service and high prices on one corner, and a Dunkin' Donuts where they remember my name AND get my order out quickly for half the price.

This sort of makes the buying decision a no brainer.

‘We've allowed other people to define us,’ he said.”“We've become the poster child for excess. ... We are going to dispel this myth about a $4 cup of coffee,” Schultz said, noting that the company is working overtime to be sensitive to consumers’ evolving priorities: “We're being incredibly smart. We're doing everything we can to be sensitive to the needs of our customers. We can no longer sit back and ignore the pressure that our customers are under."

As a reformed Starbucks loyalist, I would suggest to Mr. Schultz, that the chain can no longer afford to sit back and ignore the competitive pressures they themselves are under.

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