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Coffee Industry Market Structure

Bob Recardo for president
by

Michael O'Neil

on 15 April 2013

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Transcript of Coffee Industry Market Structure

Businesses Similarities 1. All of the businesses offer similar coffee drinks:

- Lattes
- Espressos
- Cappuccinos
- Hot Chocolate
- Teas

2. All of the businesses sell baked goods like cakes, muffins, and scones; lunch foods like sandwiches, soups, and more are also provided.

3. The prices of the products are almost the same.
- Caribou Blend: 1 lb = $12.99
- Starbucks Blend: 1 lb = $11.95 Differences Ease of Entry Clues for Market Structure 1. Somewhat low barriers of entry.

2. Many different suppliers.

3. All of the businesses essentially offer the same products, but they try to differentiate between them (product attributes). Coffee Industry 1. Caribou

2. Starbucks

3. Dunn Bros Coffee

4. Ambrosia Coffee by Michael O'Neil, Nick DeBoom, and Talia Willmert Significance to Consumers - It is relatively easy to enter the coffee industry because anyone can start their own local coffee shop if they have the determination, time, and money.

- However, coffee shops are not always successful unless they are part of a well known franchise. 1. Company Names
2. Product Names
3. Number of locations
4. Accessibility
5. Ownership
6. History 1. Taste of Products
2. Quality of Products
3. Product Price
4. "Mood" of shop Knowing that the coffee industry's market structure is 'monopolistic competition' is significant to consumers because...

- They will know that there are several different coffee shops to choose from.

- They will know that the products these shops offer will be relatively the same when it comes to taste, quality, and price.

- They will know that the prices they are paying are reasonable because providers do not have much control over the price. Differences 1. Number of shops...

- Caribou: 322
- Starbucks: 8,000
- Dunn Bros: 85
- Ambrosia Coffee: 3

2. Starbucks is more accessible because it has a drive thru, whereas a local shop like Ambrosia Coffee requires you to go in and order.

3. Starbucks, Caribou, and Dunn Bros are franchises, but Ambrosia Coffee is owned by a Minnesota family. Real or Imagined Real: Imagined: Monopolistic
Competition! Bibliography 1. "Ambrosia Coffee - Espresso Bar Cafe©." Ambrosia Coffee. N.p., n.d. Web. 17 Dec. 2012. <http://ambrosiaespresso.com/>.

2. "Beverages." Dunn Bros Coffee. N.p., n.d. Web. 17 Dec. 2012. <http://dunnbros.com/>.

3. "Caribou Coffee." Caribou Coffee. N.p., n.d. Web. 17 Dec. 2012. <http://www.cariboucoffee.com/>.

4. "Case Study: Caribou Coffee vs. Starbucks - Seoanalysisnow." Case Study: Caribou Coffee vs. Starbucks - Seoanalysisnow. N.p., n.d. Web. 17 Dec. 2012. <https://sites.google.com/site/seoanalysisnow/case-study-caribou-coffee-vs-starbucks>.

5. "Market Structure." Market Structure. N.p., n.d. Web. 17 Dec. 2012. <http://www.westga.edu/~bquest/1997/ecnmkt.html>.

6. "Now Comparing Starbucks CorporationvsCaribou Coffee Companyvs."Www.goodguide.com. N.p., n.d. Web. 17 Dec. 2012. <http://companies.goodguide.com/compare/1037-216703/Starbucks-Corporation-vs-Caribou-Coffee-Company>.

7. "Starbucks Coffee Company." Starbucks Coffee Company. N.p., n.d. Web. 17 Dec. 2012. <http://www.starbucks.com/>.

8. Google Images for pictures What is the market structure?
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