While Starbuck’s instant coffee may bring instant revenue (pun intended), will it enhance Starbucks’ brand value? I don’t think so. Instant Coffee pulls Starbucks further from a more differentiated value promise, a critical component of a winning business model innovation.
Starbucks’ original value promise – the one that created its success – was a pleasurable place in the midst of busy lives to pause and connect with yourself or others. Starbucks made coffee into an affordable, luxurious time-out.
Where Is Starbucks on the Slippery Slope to Commoditization?
Starbucks’ push for global brand domination transformed its stores into miniature big box retail space, devoid of local content. Competitors copied the easy-to-copy coffee. No wonder McDonalds easily stole Starbucks’ customers by offering faster lines and lower prices for equivalent taste.
Instant coffee isn’t the way back to uniqueness. Instant coffee is the antithesis of a pleasurable pause. It reinforces our rush, whatever its taste. Furthermore, Starbucks competing on “best taste” instant coffee reminds us of how Starbucks is anything but best taste. Its beans are less fresh than local coffee shops’ beans. Its bakery items taste like packaged manufactured items on grocery store shelves.
Do you think Starbucks’ instant coffee entry a smart business model innovation?
The March 16th 2009 Wall Street Journal reports that Starbucks is experimenting with a remodeled store appearance – dark wood décor and traditional coffee drinks. “A spokesperson for Starbucks” the article reports, “said the changes were aimed at making the store feel more like a coffeehouse.” With instant coffee?
For insight on business model innovation and business model differentiation, read my recently released book, Beyond Price.