Well, I have shamelessly copied this from Startup news. I like what they said.
What happened was, there was a coffee shop called “its a grind” and one day starbucks moved in accross the street. It seemed impossible for the small coffee shop to compete with the Giant Starbucks. And there the owner of It’s a Grind posted this message for his employees.

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To: TEAM GRIND

From: John

Guys,

We have had a lot of questions from customers and friends about Starbucks going in across the street. Here are some things you might share with customers, assuming that you agree with them:

1) Starbucks WILL be competition. Will Starbucks get some of our business? -yes. Will we get some of their business? -YES. Our drinks taste better than theirs, our store is nicer and more comfortable and our staff is more friendly. I get a lot of positive comments about our staff-it’s doubtful that Starbucks does. These things will keep us competitive in spite of Starbucks brand recognition. An important thing to remember is that many people relate to locally owned businesses. Large international companies like Starbucks have the bottom line (stock price) first in mind and a lot of people don’t relate to that.

2) We are doing well with speed of service at the drive-thru. This is important because Starbucks is good at that. We need to make sure we keep it up and maybe get a little better.

3) Our regulars will stay with us-we have a great core of regular customers that know us and this is important. Our core of customers will grow as the area grows.

4) Food-this will be key in differentiating us from Starbucks. We are in the process of getting our menu set up. This will be in place before the end of the month.

5) Every business that I’ve ever been involved with is competitive-that’s the way life is. People who put their tails between their legs and pout never succeed. People with positive attitudes that stay focused almost always succeed.

6) We will not only succeed but we will be thriving 2 years from now. That’s because we have a great crew, a superior product and competitive prices. If somebody comes in whining-”You can’t compete with Starbucks”-that’s baloney and they have a loser attitude. Keep your chin up and don’t be afraid of competition!

John

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Now, thats a real never say die attitude. And as Google proves it over and over again, having great employees can really enhance your business.