To be sure, Starbucks has a lot going for it as it confronts the
challenge of regaining its growth. Nearly free of debt, it fuels expansion with internal cash flow. And Starbucks can maintain a
tight grip on its image because stores are company-owned: There
are no franchisees to get sloppy about running things. By relying
on mystique and word of mouth, whether here or overseas, the
company saves a bundle on marketing costs. Starbucks spends just
$30 million annually on advertising, or roughly 1 percent of revenues, usually just for new flavors of coffee drinks in the summer
and product launches, such as its new in-store Web service. Most
consumer companies its size shell out upwards of $300 million
per year. Moreover, Starbucks for the first time faces competition
from large U.S. competitors such as McDonald’s and their new
McCafés.