Professor Mark J. Perry's Blog for Economics and Finance
As anti-corporate crusaders are now discovering, instead of advocating for legal prohibitions on chain stores or attempting to zone the offending businesses off of Main Street USA, mom-and-pop shops can successfully combat the coffee behemoth by using old-fashioned market competition.
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
3 Comments:
Even if true, it will not result in any reduction in the efforts of anti-corporate crusaders to zone out businesses they don't like.
I actually live in the DC area and just went to that coffee place in the video last night! Theres a reason why it can compete and is always packed. Its a little pricey but it has a great atmosphere and it has some very unique coffee and alcoholic drinks that you'd never find much anywhere else never mind a starbucks. In short they have offered consumers options and have been able to compete.
One advantage that the little guy never has is greater access to capital. Starbucks can afford to take losses for quite a while on each store before realizing a profit because their pockets are deeper. They can take bigger bets due to their size.
The little guys can do no such thing. That still doesn't mean that they won't outcompete starbucks (starbucks coffee does taste like dirt, after all), but they have a natural disadvantage.
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