2/27/2008

Starbucks is Shutting Down!

On Tuesday February 26th Starbucks shutdown all of their United States stores for three hours so they could hold a training. For three hours they were going to be obsolete and Dunkin Donuts would have a dominant hold on the market. The Chicago Tribune reports that the 450 Dunkin Donuts in the Chicago area provided small lattes, cappuccinos or espressos for free during these three hours. This was a great move by Dunkin Donuts as it would likely bring in customers that have never set foot into their establishment. In the battle of the caffeine fix provider, if you’re able to get at least one individual to switch from the competitor to your establishment it will make up for the cost of the products you gave away free.

11 comments:

Avery said...

Instead of focusing on energizing their employees, maybe Starbucks should look into getting rid of their pre-ground, pre-packaged coffee. I can see why McDonald's and Dunkin' Donuts are gaining market share as Starbucks becomes more and more like them, but still charges high prices.

binoculars said...

Aidan - I totally agree with you. Just one customer can truly make a difference for an organization. It's a really great way to attract the competitor's customers.
Here are some interesting statistics:
80% of business's sales come from the top 20% of their customers/clients.
It costs 6x more to sell something to a prospect than selling it to an existing customer.

Emma said...

I also agree with Aidan. It's important to note how big the coffee industry is today. So many customers drink coffee as a daily routine. When coffee drinkers decide to switch coffee brands, it is usually a life time change. The decision by Starbucks to close all American stores, even temporarily, was not a smart idea. I think the outcome hurt their image and will push coffee drinkers toward their close competitors.

Dr. Tufte said...

I'm speechless about this whole thing - really just no idea what to make of it.

Anonymous said...

Don’t believe one optimistic word from any public figure about the economy or humanity in general. They are all part of the problem. Its like a game of Monopoly. In America, the richest 1% now hold 1/2 OF ALL UNITED STATES WEALTH. Unlike ‘lesser’ estimates, this includes all stocks, bonds, cash, and material assets held by America’s richest 1%. Even that filthy pig Oprah acknowledged that it was at about 50% in 2006. Naturally, she put her own ‘humanitarian’ spin on it. Calling attention to her own ‘good will’. WHAT A DISGUSTING HYPOCRITE SLOB. THE RICHEST 1% HAVE LITERALLY MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. Don’t fall for any of their ‘humanitarian’ CRAP. ITS A SHAM. THESE PEOPLE ARE CAUSING THE SAME PROBLEMS THEY PRETEND TO CARE ABOUT. Ask any professor of economics. Money does not grow on trees. The government can’t just print up more on a whim. At any given time, there is a relative limit to the wealth within ANY economy of ANY size. So when too much wealth accumulates at the top, the middle class slip further into debt and the lower class further into poverty. A similar rule applies worldwide. The world’s richest 1% now own over 40% of ALL WORLD WEALTH. This is EVEN AFTER you account for all of this ‘good will’ ‘humanitarian’ BS from celebrities and executives. ITS A SHAM. As they get richer and richer, less wealth is left circulating beneath them. This is the single greatest underlying cause for the current US recession. The middle class can no longer afford to sustain their share of the economy. Their wealth has been gradually transfered to the richest 1%. One way or another, we suffer because of their incredible greed. We are talking about TRILLIONS of dollars. Transfered FROM US TO THEM. Over a period of about 27 years. Thats Reaganomics for you. The wealth does not ‘trickle down’ as we were told it would. It just accumulates at the top. Shrinking the middle class and expanding the lower class. Causing a domino effect of socio-economic problems. But the rich will never stop. They will never settle for a reasonable share of ANYTHING. They will do whatever it takes to get even richer. Leaving even less of the pie for the other 99% of us to share. At the same time, they throw back a few tax deductable crumbs and call themselves ‘humanitarians’. IT CAN’T WORK THIS WAY. Any 'humanitarian' progress made in one area will be lost in another. EVERY SINGLE TIME. IT ABSOLUTELY CAN NOT WORK THIS WAY. This is going to end just like a game of Monopoly. The current US recession will drag on for years and lead into the worst US depression of all time. The richest 1% will live like royalty while the rest of us fight over jobs, food, and gasoline. Crime, poverty, and suicide will skyrocket. So don’t fall for all of this PR CRAP from Hollywood, Pro Sports, and Wall Street PIGS. ITS A SHAM. Remember: They are filthy rich EVEN AFTER their tax deductable contributions. Greedy pigs. Now, we are headed for the worst economic and cultural crisis of all time. SEND A “THANK YOU” NOTE TO YOUR FAVORITE MILLIONAIRE. ITS THEIR FAULT. I’m not discounting other factors like China, sub-prime, or gas prices. But all of those factors combined still pale in comparison to that HUGE transfer of wealth to the rich. Anyway, those other factors are all related and further aggrivated because of GREED. If it weren’t for the OBSCENE distribution of wealth within our country, there never would have been such a market for sub-prime to begin with. Which by the way, was another trick whipped up by greedy bankers and executives. IT MAKES THEM RICHER. The credit industry has been ENDORSED by people like Oprah, Ellen, Dr Phil, and many other celebrities. IT MAKES THEM RICHER. Now, there are commercial ties between nearly every industry and every public figure. IT MAKES THEM RICHER. So don’t fall for their ‘good will’ BS. ITS A LIE. If you fall for it, then you’re a fool. If you see any real difference between the moral character of a celebrity, politician, attorney, or executive, then you’re a fool. WAKE UP PEOPLE. ITS ALL ABOUT THE MONEY. The 1% club will always say or do whatever it takes to get as rich as possible. Without the slightest regard for anything or anyone but themselves. Vioxx. Their idea. Sub-prime. Their idea. NAFTA. Their idea. Outsourcing. Their idea. The commercial lobbyist. Their idea. The multi-million dollar lawsuit. Their idea. $200 cell phone bills. Their idea. $200 basketball shoes. Their idea. $30 late fees. Their idea. $30 NSF fees. Their idea. $20 DVDs. Their idea. Subliminal advertising. Their idea. The MASSIVE campaign to turn every American into a brainwashed credit card, pharmaceutical, love-sick, celebrity junkie. Their idea. All of which concentrate the world’s wealth and resources and wreak havok on society. All of which have been CREATED AND ENDORSED by celebrities, athletes, and executives. IT MAKES THEM RICHER. So don’t fall for their ‘ good will’ ‘humanitarian’ BS. ITS A SHAM. NOTHING BUT TAX DEDUCTABLE PR CRAP. Bottom line: The richest 1% will soon tank the largest economy in the world. It will be like nothing we’ve ever seen before. and thats just the beginning. Greed will eventually tank every major economy in the world. Causing millions to suffer and die. Oprah, Angelina, Brad, Bono, and Bill are not part of the solution. They are part of the problem. EXTREME WEALTH HAS MADE WORLD PROSPERITY ABSOLUTELY IMPOSSIBLE. WITHOUT WORLD PROSPERITY, THERE WILL NEVER BE WORLD PEACE OR ANYTHING EVEN CLOSE. GREED KILLS. IT WILL BE OUR DOWNFALL. Of course, the rich will throw a fit and call me a madman. Of course, their ignorant fans will do the same. You have to expect that. But I speak the truth. If you don’t believe me, then copy this entry and run it by any professor of economics or socio-economics. Then tell a friend. Call the local radio station. Re-post this entry or put it in your own words. Be one of the first to predict the worst economic and cultural crisis of all time and explain its cause. WE ARE IN BIG TROUBLE.

Trinity said...

Dr. Tufte said he has no idea what to make of this. I would agree. Why in the world wouldn't Starbucks just schedule the training in a way that would allow them to stay open. It is absurd to allow competitors an advantage like this.

Also, the anonymous post above mine is ridiculous. Don't bother reading it. I can refute his/her statement with 1 sentence- The wealthy create wealth and jobs, while the poor only spend on immediate needs.

Gavin said...

Extra Credit - Dr. Tufte
This really appears to be a contradictory effort by Starbucks. This article reveals the difficulty companies face when they become the front-runner. This move does not seem to be a good way to re-invent their brand.

Anonymous said...

Trinity. That really is a small minded under-thought short sighted statement. Especially after 27 years of Reaganomics to learn from. Jobs don't 'generate' wealth. They only circulate it. In other words, if I expand my business and hire 5 workers, their pay must be drawn indirectly from others. Who split their little share of the pie with me in return for a product or service. Unfortunately, the 1% have shown throughout history that they will charge as much as possible and pay as little as possible. IT MAKES THEM RICHER. So don't feed me that crap about 'jobs'. In case, you havn't noticed, most people are working more hours and have less to show for it. This can be attributed to the obscene profits of the 1% club and the distribution of wealth. Tell you what. Why don't you run your little theory about 'jobs' by any professor of economics along with my rant. Let me know how he/she responded to your one-liner. No? THATS WHAT I THOUGHT. By the way. If you want to run your mouth about 'economic growth', thats fine by me. But don't forget about consumer debt, the shrinking middle class, the national deficit, or the crumbling infrastructure. You already made one stupid mistake. Don't make another. Now, get out of my face. I have work to do.

Reagan said...

Dr. Tufte-Extra Credit

Why in the world would the largest coffee shop in the world shut down operations for three hours? I have the answer, stupidity! Never give your competitors an opportunity to steal your customers. I just watched Starbuck's most recent propaganda to rebuild their business on ABC's Nightline. Their CEO admits they have strayed from their original business that made them popular and want to go back to who they used to be. He gave a cute catch phrase that they are not in the coffee business but in the "serving people business". I wonder if he thought about the fact that if you shut your doors you can't serve your patrons. I would love to know how many of their customers they lost to Dunkin' Donuts.

TheFindlay said...

Dr. Tufte
Speechless huh, that really is a shocker! Surprisingly, I do have something to say about the whole Starbucks thing. Were they trying to show consumers that they care about quality and customer service by shutting down their stores to have a training? It just doesn’t make sense to me. What message did that act really send? I mean come on, you are a business, if you really need to train everyone at the same time around the globe make them come in early or stay late. Let’s also be honest with ourselves, Dunkin Doughnuts is in a whole different market; shouldn’t espresso cafes have offered free coffee?

Dr. Tufte said...

Ummm ... yikes ... so "anonymous", are you going to be so vocal when things don't pan out that way?