Schultz “Blinked”

I think Howard Schultz blinked. It's understandable -- when McDonald's runs ads that say, "four dollars is dumb," it's bound to piss him off. I'll be watching for the ads to see how he's responding.

BUT, I think he's missing the real value in the Starbucks proposition: He pioneered the "third space" notion -- gotta go to work; gotta go home; Starbucks is the "green room" for both venues.

First up: Anyone who has ordered a cup of coffee at a McDonald's or Dunkin' Donuts knows they don't want you to linger there -- and you don't want to. Their model is the old one -- turn those tables, move 'em in and out, fast.

Starbucks is the place you go and feel it's perfectly okay to linger. That's a tremendous value -- particularly as people get laid off and need a place to go (rather than hanging out at home in their bathrobes) to work on their resume, see people, wait for the interview or decompress after it.

I think Starbucks ought to be talking about that welcoming part of the brand DNA, that and then too, there's the less consumer-centric bits that still add up to a terrific brand personality, i.e. the professionalization of the barrista -- and the company's values in terms of healthcare and stock options for part-time workers, free trade coffee, all that.

Starbucks shouldn't be competing on price with McD's. Eeck.