Apr 16

Apr 16 Starbucks versus McDonald's: The Postmodern McMocha?

I just read an article on Time about a coffee war that is brewing between Starbucks (NASDAQ: SBUX) and McDonald's (NYSE: MCD). Apparently McDonald's is hoping to cash in on the $4/cup coffee craze and is going to be putting espresso machines inside nearly 15,000 of its locations.

Now as someone with a Germanic temperament, I tend to like neat categories and rigid structures. I am inclined to think that most businesses should stick to what they are best at and stick to their reason for being. When I think of McDonald's I don't think of premium coffee. McDonald's is a Big Mac, McDonald's is a Quarter Pounder, McDonald's is french fries, but McDonald's is not espresso. The clientele is the wrong crowd, or maybe the right crowd in the wrong mindset, but I'm sure that the great espresso experiment will go over like a lead balloon.

There is something in today's postmodern culture that encourages this mixing and blending of things that are best kept separate. Whether it is the blending of different business spheres in a postmodern "fusion" (think Asian-Fusion cuisine), or whether it is the trend toward interdisciplinary research in higher education, traditional boundary lines are being abandoned in favor of this postmodern mix.

Jean-Francois Lyotard considered this to be an indication of the erosion of the legitimacy principles behind traditional concepts of knowledge, ethics, and even business practices. It used to be that we had grand narratives of progress and liberation to guide us as a society, all of which were reciprocally reinforced by the traditional boundaries in our concepts and categories.

With the decline in our faith, as a society, in these traditional concepts, novelty for its own sake has become the modus operandi for business and research. As Lyotard says in his Postmodern Condition, "They have at their disposal no metalanguage or metanarrative in which to formulate the final goal and correct use of [their] machinery. But they do have brainstorming to improve its performance."

What better summary could there be of the current economic, governmental, and academic state of affairs? Espresso at McDonald’s was undoubtedly dreamed up inside of a corporate board room or a customer focus group, with novelty as its primary motivator. Yes it is true that novelty motivates investors and hence affects a company's stock value, but I yearn for the days when a company could be a sound investment just by doing what it does, and that alone, and doing it very well.

Inevitably what will occur is that McDonald's will introduce its new espresso service, it will become a fad, and then there will be a call for a return to McDonald's core elements. This has occurred every time McDonald's has attempted to stray from its original formula (McDonald's salads anyone?). The return to McDonald's basics will itself be presented as a type of novelty, which can be touted to shareholders as a form of corporate carrot-waving.

I think it is fair to say that we can already kiss the McDonald's McMocha goodbye, although not before millions of dollars are spent in advertising and planning this espresso adventure. It's a good indication of these postmodern times and just how fragile, shadowy, and contingent our economy has become.