Starbucks Starbucks Economic Analysis - 1673 Words

Starbucks Economic Analysis 1 Starbucks Economic Analysis PATTEN UNIVERSITY JULY 29, 2015 MGT407 Managerial Economics Starbucks Economic Analysis 2 The coffee industry had never been the same since the early 1970s when three investors started a Seattle business called Starbucks Coffee, Tea, and Spice in Pikes Peak Market. Each invested about one thousand dollars and-and borrowed five thousand more from a bank to launch their endeavor. The coffee-loving character in Herman Melville’s great novel Moby Dick inspired the name. The first location had hand-built nautical features in line with Melville’s inspiration. One full wall was devoted to whole bean coffees while another wall consisted of shelves of coffee related products. Samples were†¦show more content†¦The company has recently entered into licensing agreements to supply locations that do not merit a store presence. These agreements allow Starbucks to have sales in airlines, hotels, hospitals, universities, and other business areas. Starbucks has become ubiquitous with coffee by 2015. Supply And Demand of Starbucks Coffee Coffee is the second to oil as the most traded commodity. Coffee is grown in over 75 countries and employs more than 20 million farmers. Altogether, millions of people are involved in the harvesting, handling, exchanging and selling of the product. In 2008, these farmers harvested over 15 billion pounds during the same period the markets only traded 13 billion pounds. This overproduction in this industry is not a usual thing and is one of the major reasons why prices vary throughout the industry. (National Coffee Association, 2015) When it comes to the supply and demand of Starbucks coffee, there are certain factors that can fluctuate. The seasons are one example that affects the consumption of coffee. People tend to consume more in the winter rather than the summer due to the cold temperature and shorter days. Starbucks counteracts in the summer by offering iced drinks. However; during the summer, these factors are considered more of a want compared to almost a need during the wintertime. Another major factor that hinders the supply of coffee is the tariffs that the differentShow MoreRelatedEconomic Analysis Of The Starbucks Corporation Essay4621 Words   |  19 PagesEconomic Analysis of the Starbucks Corporation Nothing like the fresh scent of brewed coffee in the morning – â€Å"Starbucks† a well-known coffee house that is still growing and expanding their operations today is considered the number one specialty coffee retailer around the world and abroad. Therefore, the supply and demand for coffee is on the incline and is regarded as one of the most rapid growing organizations in the world. 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