Starbucks opened its first store in 1971 in Seattle. A little coffee store in a common street, but forty years later the company has more than 24.395 stores worldwide and revenues of billions of dollars each year (21.32 billion in 2016 ). It is right now a phenomenon and a guide to teach how to make a successful business. But how can a company produce these large amounts of profits with an elastic product as coffee? Maybe because for its clients the coffee from them is not any coffee or coffee in this era is not an elastic good. Before discussing the specific case of Starbucks, it is important to determinate if regular coffee is an elastic or inelastic good. The first problem around this case is the different brands of coffee. The coffee has different qualities which depends of the beans and where the beans are. …show more content…
Moreover, 2014 is an interesting year to expand the idea about the inelasticity of the Starbucks’ coffee. In July of 2014, Starbucks rose its prices of coffee in 8%, but the profits of the year still positive and this happens because Starbucks sells more than coffee they sell an experience . The coffee from Starbuck represent for its clients more than a common coffee, clients from Starbucks go there not only for the coffee but also for the simple fact to go there, making the place a meet point to talk or kill some time. But only create a special environment is it enough to keep the inelasticity of the coffee? The answer is not. Another important aspect of the Starbucks’ coffee is the fact they offer different types of special coffees. Expressos, macchiatos, black coffee are common, and they are more elastic than some special products as Java Chip Frappuccino. The less substitutes more inelastic the good, Starbucks understand this concept and take advantages creating new special products to keep fresh its