Description and "Diagnosis" of the Organizational Problem Since its creation in 1971, Starbucks had managed to consistently expand to and increase profit, yet in 2008 Starbucks began to report declines in profit and by 2009 net income had dropped 77% (Starbucks, Awaiting Recovery…). Furthermore, the quality of the once admired coffee began to decline as customers noted a charred flavor and while some even ranked the supposedly lower-end McCafes above Starbucks (Consumer Reports). Although, “some industry forecasters foresaw Starbucks’ disappointing performance as an early indicator of a weakening economy”, Starbucks’ own internal research indicated that that this was not the case. Rather than simply reflecting the downturn in the economy, this shrinkage was the result of the changes being made within Starbucks and the increasing competition outside of Starbucks. As the first of its kind, Starbucks initially experienced very little competition, but through the decade of the 00s both McDonald’s and Dunkin Donuts began to gain access and success in the market. In 2001, McDonald’s reinvigorated “McCafe”, and began offering espresso drinks in addition to teas and pastries (Starbucks: Maintaining a Clear Position). McDonald’s also emulated Starbucks by declaring in 2008 that they would, “begin installing coffee bars with ‘baristas’ throughout its US stores over the next two years” (Starbucks: Maintaining…). With prices between $1.99 and $3.29 as opposed to Starbucks’ $2.65 to $4.15, McDonald’s also held a clear advantage in the lower budget market. Although Dunkin Donuts had historically been focused on donuts, in the 2000s Dunkin Donuts also came to compete with Starbucks as it “pursued an aggressive growth strategy that shifted its positioning to coffee” (Starbucks: Maintaining…). Dunkin Donuts also “began offering free Wi-Fi and piped-in music. These