Starbucks Corporation (NYSE:SBUX) announced a broad restructuring plan aimed at turning around the specialty coffee maker. The company began by ousting CEO Jim Donald yesterday and handing the reins to current Chairman and founder Howard Schultz to bring investors some relief after a steep 48 percent decline in the share price during the last year. Shareholders applauded the news by sending shares up over 9 percent in today’s session.

Starbucks announced in a letter to employees that it had to shift focus away from bureaucracy and back to customers. Many argue that the firm’s rapid expansion forced it to cut down on aspects that made its cafes an exciting place with new products. Now, the company faces increased competition from fast food joints that are quickly adding premium coffee blends and a classier atmosphere to their own locations. Combined, these factors have put Starbucks in a tough spot.

However, shareholders are confident that Schultz is the right man to orchestrate a turnaround. He is well known as a fighter with tough standards and a strong desire to succeed. He stuck with the company as its chairman since stepping down and oversaw many side projects – such as Starbucks’ move into the music and film business. Schultz plans on restructuring the firm’s U.S. locations by giving employees better training and tools and launching new products, which he claims will have just as much of an impact as the Starbucks Card and its Frappuccino products.

In the end, this is all great news for shareholders. Schultz had what it takes to build up a billion dollar business behind coffee and now the same great leadership is again behind the company. Shareholders are hoping that he will be able to orchestrate a turnaround and make Starbucks a great brand once more, able to stand up to mounting competition. Combined, these factors make SBUX a stock worth watching!

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CNET Networks (NDAQ:CNET) moved higher this morning after a group of investors, led by Jana Partners, nominated seven candidates to the company’s board of directors. The investors are hoping to curb the stock’s continuing decline by assembling an experienced team of directors to orchestrate a turnaround. Shareholders are hoping to see some changes as shares sit off their 52-week lows but well below intrinsic value.

“This effort is about taking an underperforming company and increasing shareholder value by building on its top-notch editorial talent and premier internet assets,” said Barry Rosenstein, Manaing Partner at Jana Partners. “Together with Paul Gardi and Spark Capital, we have assembled a group of nominees we believe has the technical skills and business experience to reverse CNET’s ongoing underperformance and start delivering value for shareholders.”

Jana Partners noted that in addition to its 8 percent voting stake in CNET, it also has an 8 percent non-voting interest and recently enlisted Sandell Asset Management – which holds a 5 percent non-voting interest – as an ally. However, the investors may have run into a small problem with the company’s bylaws, which prevent any shareholders from nominating directors until they have held their stock for one year – a provision Jana calls “discriminatory”.

In the end, this is good news for shareholders as it could finally mean change in a company that has only seen problems for the last few years. The investor group’s nominations to the board have vast experience and would likely be able to bring some change. Combined, these factors make CNET a stock worth watching!

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Starbucks Corporation (NDAQ:SBUX) may be trading near its 52-week lows but many believe that it has nowhere to go but down. The coffee chain is facing increased competition from convenience-industry players like McDonalds, Dunkin Doughnuts, and regional coffee shops that threaten to slow the growth numbers to which investors have been accustomed.

McDonalds (NYSE:MCD) announced plans to take on Starbucks more directly today by installing premium coffee bars with baristas serving up cappuccinos, lattes, mochas, and frappes. Internal documents project that this program will add $1 billion to McDonald’s annual sales of $21.6 billion. The move marks another jump for a company that is already in its sixth year of a successful turnaround, while Starbucks has been struggling after years of strong growth numbers.

Starbucks has traditionally relied on the quality of its coffee to set it apart from fast food companies like McDonalds; however, the fast food chains recent switch to premium blends has many worried. It fact, the February issue of Consumer Reports even rated McDonald’s drip coffee as better-tasting than Starbucks! Since 80% of Starbucks customers do not drink in the store, quality may be the only thing keeping them coming back, which could present a problem.

Starbucks has taken actions of its own in order to combat the growing fast food threat. The coffee chain started serving lunch at many of its locations, offering customers a healthier alternative to fast food joints like McDonalds. The move has some worrying, however, that the chain may be eroding its good name by lowering itself to fast food standards. Starbucks also continues to boast the largest selection of specialty coffees, which should keep it ahead of McDonalds for serious drinkers.

Overall, Starbucks appears to be in danger of at least a significantly slowed growth with premium coffee blends expanding into fast food chains. Meanwhile, its own plans to introduce food has alienated some customers and has had very little impact on the company’s bottom line. It will be interesting to see how Starbucks responds to these threats as its shares continue to trend lower in the medium term.

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