Pricing
Economics & Institutions
TReNDS
Martin Pitek
MGMT - 7730
March 20, 2009
Starbucks Coffee
Table of Contents
Introduction 3
Product Analysis 3 Product Overview 3 Market Structure 4 Competition 5 Dunkin Donuts 7 Krispy Kreme 3 McDonalds 8 Panera Bread 8 Elasticity Estimates Pricing Strategy 10
Forecast 12 Determants of Demand 13 Forecast Model 15 Forecast Error! Bookmark not defined.
Summary 15
Works Cited
Introduction
With the economy in trouble, the stock market tanking it is important to start your day with a good cup of coffee to take on these challenges. Can Starbuck’s sustain it business model and place in the market? The paper examines Starbucks business and it respective practices.
In 1971, the original Starbucks opened in Pike Place Market in Seattle, Washington by three partners named Jerry Baldwin, Zev Siegal, and Gordon Bowker. Their focus was to sell coffee beans and equipment. They purchased green coffee beans from Peet’s, a specialty coffee roaster and retailer, during their first year of operation. Later, they began buying coffee beans directly from the growers. In 1983, an entrepreneur by the name of Howard Schultz joined the company; Schultz felt that the company should sell coffee and espresso drinks as well as coffee beans. The partners felt that selling coffee and espresso drinks would take away from their primary focus of selling coffee beans. Since the idea did not work, Schultz started his own company called II Giornale coffee bar chain in 1985. In 1987, the original owners of Starbucks sold their chain to Schultz’s II Giornale. Schultz changed II Giornale outlets to Starbucks chains and quickly began to expand.
Starbucks coffee has grown into the largest coffeehouse company in the world with 16,120 stores in 94 countries such as in Australia,
TReNDS
Martin Pitek
MGMT - 7730
March 20, 2009
Starbucks Coffee
Table of Contents
Introduction 3
Product Analysis 3 Product Overview 3 Market Structure 4 Competition 5 Dunkin Donuts 7 Krispy Kreme 3 McDonalds 8 Panera Bread 8 Elasticity Estimates Pricing Strategy 10
Forecast 12 Determants of Demand 13 Forecast Model 15 Forecast Error! Bookmark not defined.
Summary 15
Works Cited
Introduction
With the economy in trouble, the stock market tanking it is important to start your day with a good cup of coffee to take on these challenges. Can Starbuck’s sustain it business model and place in the market? The paper examines Starbucks business and it respective practices.
In 1971, the original Starbucks opened in Pike Place Market in Seattle, Washington by three partners named Jerry Baldwin, Zev Siegal, and Gordon Bowker. Their focus was to sell coffee beans and equipment. They purchased green coffee beans from Peet’s, a specialty coffee roaster and retailer, during their first year of operation. Later, they began buying coffee beans directly from the growers. In 1983, an entrepreneur by the name of Howard Schultz joined the company; Schultz felt that the company should sell coffee and espresso drinks as well as coffee beans. The partners felt that selling coffee and espresso drinks would take away from their primary focus of selling coffee beans. Since the idea did not work, Schultz started his own company called II Giornale coffee bar chain in 1985. In 1987, the original owners of Starbucks sold their chain to Schultz’s II Giornale. Schultz changed II Giornale outlets to Starbucks chains and quickly began to expand.
Starbucks coffee has grown into the largest coffeehouse company in the world with 16,120 stores in 94 countries such as in Australia,
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