case

Journal of Case Research in Business and Economics

Coffee Wars - The Big Three: Starbucks,
McDonald’s and Dunkin’ Donuts
Michael G. Brizek
South Carolina State University
ABSTRACT
Coffee – for some, a morning cannot begin without it. Many daily rituals include it. It can be seductive, enticing, and addictive. Hard-core coffee drinkers pride themselves on their coffee palettes, their refined ability to distinguish “good” coffee from “bad.” And once a diehard coffee drinker finds his favorite blend, mountains sometimes must be moved to entice him to deviate from it.
But, for decades, the idea of “good” coffee was synonymous with “expensive.” If a consumer wanted to try the best blends or flavors, he had to be prepared to pay for it. Wallets were emptied, change was gathered, and the coffee-hooked consumer was walking into the coffeehouse ready and quite willing to hand over $4 to a smiling barista. Perhaps it was true that the coffee was the best to be offered. Perhaps the ambience and cozy atmosphere was a drawing factor. Perhaps it was the label that was associated with it, the feeling that he now belonged to an upscale club or group that not everyone else was entitled to join. Whatever the draw, the consumer continued to come back; day after day, week after week.
Then something happened. The economy began spiraling downward, prices rose, and suddenly, a $4 cup of coffee was not quite as attractive as it once had been. Enter: The Coffee
Wars. Premium coffee shops like Starbucks were suddenly faced with competition from fast food upstarts like McDonald’s and Dunkin’ Donuts, operations that were abruptly breaking into the premium coffee industry with “cheaper, but almost as good, coffees.” Life as the coffeedrinker once knew it had changed forever. For the better? That question remains unanswered as the war continues. But one fact is for certain; the battlefield will never be the same again.
Keywords: economic recession, competition,

References: Associated Press (2007). Starbucks’ Rivals Brew Up a Coffee War. Money Central. Retrieved July 18, 2010 from Associated Press (2009). Coffee Wars Heat Up As McDonald’s, Starbucks Pump Big Bucks Into Marketing Dunkin’ Brands / Corporate History (2007). Dunkin’ Brands Corporation. Retrieved July 12, 2010 from http://www.dunkinbrands.com/aboutus/history.html Dunkin’ Brands / Strategic Heartbeat, Values and Principles (2007). Dunkin’ Brands Corporation http://www.dunkinbrands.com/aboutus/values_philosophy.html Dunkin’ Donuts / Company Information (2010) Corporation. Retrieved July 12, 2010 from https://www.dunkindonuts.com/aboutus/company/ Golde, Michael J. (2009). Starbucks vs. McDonald’s: Filtering Through the Coffee Wars. Seeking Alpha. Retrieved July 16, 2010 from http://seekingalpha.com/article/144546starbucks-vs-mcdonald-s-filtering-through-the-coffee-wars Halpern, Steven BloggingStocks. Retrieved July 18, 2010 from http://www.bloggingstocks.com/2008/02/12/the-coffee-wars-starbucks-sbux-vsmcdonald-s-mcd/ Hoovers (n.d.). Top Starbucks Competitors. Retrieved July 12, 2009, from http://www.hoovers.com/starbucks/--ID__15745--/free-co-competitors.xhtml Isidro, Isabel (2004). Learning from Starbucks:10 Lessons for Small Businesses. PowerHomeBiz.com. Retrieved July 12, 2009, from http://www.powerhomebiz.com/vol144/starbucks2.html James, Andrea. (2008). Starbucks Won’t Slug it Out in Ad Wars; Coffee Chain Says It’ll Take High Road Jargon, Julie. (2009). Corporate News: New Ads Will Stir Up Coffee Wars – As Starbucks Touts ‘Perfect’ Cup, McDonald’s Promises an Affordable Lift Retrieved July 16, 2010 from http://online.wsj.com/article/SB124139141624581429.html Johnston, Maura Overstimulation. Retrieved July 18, 2010 from http://www.theawl.com/2010/03/thecoffee-wars-will-not-end-until-america-is-a-shaking-heap-of-overstimulation Liu, Leona http://abcnews.go.com/Travel/mccafs-compete-starbucks-europe/story?id=8690156 McDonald’s History / Our Company (2010) from http://www.mcdonalds.com/us/en/our_story/our_history.html McDonald’s Mission / About McDonalds (2009) McDonald’s Values / Corporate Responsibility Report (2009). McDonald’s Corporation. Retrieved July 12, 2010 from http://www.aboutmcdonalds.com/mcd/csr/report.html Noorbaloochi, Shahrzad (2010) Organic Consumers Association (n.d.). Fair Trade vs. Starbucks. Retrieved July 17, 2009, from http://www.organicconsumers.org/starbucks/index.cfm Petrecca, L., & Kirchhoff, S. (2007, July 24). Coffee king Starbucks raises its prices. USA TODAY Notte, Jason. (2009). Who’s Winning the Coffee Wars. Retrieved July 18, 2010 from http://articles.moneycentral.msn.com/Investing/Extra/who-is-winning-the-coffeewars.aspx Reiley, Laura. (2009). Coffee Wars: Taste Test of Starbucks, McDonald’s, 7-Eleven and Dunkin’ Donuts coffee products http://www.tampabay.com/features/food/general/article1012417.ece Starbucks Heritage / Starbucks Coffee Company (2010) 10, 2010 from http://www.starbucks.com/about-us/our-heritage Starbucks Mission Statement / Starbucks Coffee Company (2010) Retrieved July 10, 2010 from http://www.starbucks.com/about-us/companyinformation/mission-statement Starbucks Timeline / Starbucks Coffee Company (2010) 10, 2010 from http://assets.starbucks.com/assets/starbucks-timeline-basic-jan2010.pdf Coffee wars, Page 11