My Blog: Competing as Starbucks

Starbucks can be considered to be part of a perfect competition market because compared to other companies, they are one of the top successful. With their friendly "partners" (employees), great training, fresh products, variety of merchandise and over 10 different types of coffee beans to purchase, compared to the competition, I would choose Starbucks. Starbucks would realign their business practices mainly to satisfy the average customer. For example, Starbucks has changed the height of their bar and their espresso machines so that customers were seen. This is to provide the partners a chance to connect with their customers. Starbucks also wanted to change recipes of their products to meet quality expectations.

Starbucks had to close down stores because they were unprofitable due to the fact that another nearby Starbucks were taking all their business. Starbucks is planning to close down 5% of U.S. stores. The reason being is that they are trying to boost its stock prices. Starbucks would have lost profits due to store closures. Long run costs to stores would be advertising, and inventory costs.

To compare to Starbucks for me is easy. This is because I am currently working as a shift supervisor. As an employee, I still think that our products are expensive. At least once a day, I get a customer saying that a product is too expensive. But they have to know that we need to cover inventory costs, equipment and labour. I once had a customer tell me that Starbucks is too expensive that they are the reason people are on welfare. I think this is unfair because we are not forcing people to be our customers, we are just known to provide a excellent experience to customers. I think that if Starbucks were to lower prices, demand would increase and supply would decrease, maybe causing a slight shortage.