Cuz there ain't enuf places to get coffee

[Kevy Baby]

Originally Posted by Alex

On the other hand, unlike McDonald's the coffee isn't the main thing so they don't have to derive all their profit from it. They don't have to build stores and pay the rent off of coffee sales. Their overhead in expanding into coffee is much smaller than Starbucks so I've no doubt that they could sell coffee at fractions of the Starbucks' price and it would still be a fair profit. And if they are able to even approach Starbucks pricing it'll be easy money.

A very large part of the Starbucks business model is the "experience" that they try to create within their stores. The initial concept of Starbucks was to recreate the social gathering spot experienced in France (at least I think it was France).

On a related topic, Starbucks announced today that Howard Schultz would be taking back over the reins of the company.