Economic Analysis of Starbucks: The Cyprus Economy

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Economic Analysis of Starbucks: The Cyprus Economy Introduction The original Starbucks opened in 1971 in Pike Place Market in Seattle, Washington. The business was opened by three partners, specifically Jerry Baldwin, Zew Siegal and Gordon Bowkrer. The first year of business the company bought its green coffee beans from Peet's, a speciality coffee roaster and retailer but later began purchasing the coffee beans directly from the growers. Starbucks coffee has grown and is the largest coffeehouse company globally with 16,120 stores in 94 countries. Starbucks has thirty blends of coffee and single origin coffee. And the stores brands can be purchased in local stores to brew at home. The company employs more than 140,000 individuals globally and claims more than five million customers each week. I. Starbucks Market Structure Starbucks is reported to have been able to "create a sense of brand loyalty with an array of loyal followers…despite their inflated prices." (Pitek, 2009) It is reported as well that coffee is "…a fairly homogeneous item which Starbucks has been able to market their standards of portraying a luxurious lifestyle." (Pitek, 2009) The market structure within which Starbucks operates is described as a "…a monopolistically competitive market structure in which they have been able to maintain a control over their inflated prices. They have been able to create a standard for their coffee and in which they require their customer base to be exaggerated

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