Starbucks faces new challenge and some arrogance from Dunkin’ Donuts
Posted by: in Companies Competitive StrategyFiled under: Forecasts, Competitive strategy, Starbucks (SBUX), McDonald’s (MCD)
Dunkin’ Donuts seems to believe that if McDonald’s (NYSE: MCD) can take business from Starbucks (NASDAQ: SBUX) that it has a opportunity to as well.
According to Reuters, “Dunkin’ Donuts — the East Coast coffee shop chain called by some the “anti-Starbucks,” because of its core blue collar customer base, still plans to more than double its U.S. stores to 15,000 by 2020.”
Pretty arrogant. The plan by Dunkin’ Donuts sounds like comments from Starbucks more than two years ago. It stated it would eventually have 40,000 stores worldwide. At the time, it had well under half that many. Wall Street bought into the plan and when Starbucks began to see slowing in its business, investors punished it by selling its shares down by 60%.
Starbucks has been damaged by its own expansion. That does not mean that it makes sense for a competitor to state it can increase its business by 100%. With McDonald’s in the market, no other company might be able to ramp up its coffee business by any meaningful amount.
Superior for Dunkin’ Donuts to keep its mouth shut and impress people with its performance than to set a goal that it may not reach.
Douglas A. McIntyre is an editor from 247wallst.com
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