McDonalds is competition, and Starbucks is blind to the fact.
Exhibit A: premium coffee for around one dollar that can be served drive-through and which, according to an authoritative recent survey, tastes better than all other offerings. Exhibit B: premium coffee for about 4 dollars, served after a five-to-ten minute wait by baristas who raise judgmental eyebrows at you if your order lacks a long and precisely ordered string of specifications. Which would you choose?
For a lot of people--the price-conscious, the busy, the thin-skinned, the taste connoisseurs--the answer is A, McDonalds. (And never mind Starbucks' "promising overseas expansion opportunities" (read: China). McDonald's has China on lock--it's massively popular, plus the Chinese Golden Arches carries none of the cheap, white-trash stigma its American cousins must face down.)
The remainder who choose B, Starbucks do so for Starbucks brand loyalty, a sense of sophistication, eco-friendliness, and a "fight The Man" mentality. But of these four reasons to choose Starbucks, the latter three go just as well with a vote for C, the local privately owned coffee shop. Indeed these littler community offerings are often trendier, more environmentally/trade conscious, and definitely more personal/less corporate than the Starbucks every-cafe. It doesn't matter that these little guys have no market capitalization worth speaking of--the lost sales add up for Starbucks. Who consistently chooses Starbucks in the end? The Starbucks brand-loyal. Whoopee. What a haul to look forward to.