I\'m chatting with the proprietor of a small chain of coffee shops in Montana. S

Question

I'm chatting with the proprietor of a small chain of coffee shops in Montana. She tells me that starcuks just can't make the variety of coffee that she can, particular those that involve lighter rasted beans. Apparently the huge chain uses immense roasters (3,500 pounds at a roaster beans. Apparently the huge chain uses immense roasters (3,500 pounds at a time) that are not well suited to lighter beans. THe economic of scale generated in using these roasters make possible substantial profits, but they no allow rasting small amounts that she says, are essential for light roating I don't know the technology of coffee roasting; but if she is correct perphaps starbucks will wind up like the beer giant Miller and Anheuser-Busch, having large sharges of the popular market with substaintial room left for local brands and micro-roasters.

Explanation / Answer

Yes Like Burger King, Barista, CCD and Costa Coffe. CCD, Barista & Costa coffee are famous and survive only on coffee selling and differentaiting there product with each other & demarketing within prior to offering to consumers. Burger king has a lot of competition within the market with Wendy's or with Mc donald (the cheapest) So it has to distinguish itself by setting a profit which earns it higher and able to distinguish his products within that cost.

For example Coke and pepsi both have a same price but just a minor taste choice. In order to distinguish itself and earn profit, capture each other market they have to bank upon the advertsment and promotion. The cost and factor set up may also earn profit if its in a less rental cost place. raw materils to generate and firm operting in economies of scale will make them earn a substantial profit.

If the due to high labour cost, raw materals included, high rental, machinery set up are high, firms operating in the certain places which have a high opreating cost will ultimately lead to less profit and closing out of the franchise from that place.

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