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>Small cafes can’t compete with Starbucks Why do you say this? I don't randomly change pharmacies for my prescriptions, so I can't think of a "mom and pop phar

>Small cafes can’t compete with Starbucks Why do you say this? I don't randomly change pharmacies for my prescriptions, so I can't think of a "mom and pop pharmacy" off hand, but non-Starbucks coffee shops are everywhere. This has been my experience everywhere I've been in eastern states in the US from Virginia to New York. My perception is that Starbucks is primarily a place to get milkshakes, and their coffee is undrinkable, and their food is worse. Most other coffee shops do much better in those two categories. Some are also chains, but many aren't.

dehrmann 5y ago
That, and Starbucks and independent coffee shops sell a different product.
- perl4ever 5y ago
  I think everybody sells a slightly different product. I see, and other people have also noticed, that similar businesses often cluster together. How could this be explained, except by them adjusting their offerings on a bunch of dimensions so that they sort customers between them and avoid direct competition?
robbedpeter 5y ago
Starbucks will set up shop next to small cafes and offer lower prices until they've driven the other shop to close up. Once this is done, they will raise the prices back to standard. Starbucks is a great case study because they can even afford to give away free coffee long enough to shut down any small business - they have an unbeatable advantage. Many small cafes will simply shut down and not even fight when a Starbucks pops up nearby. It's the same with Walmart, Amazon, Google, etc - once a company becomes big enough, it's literally impossible for small business to compete. Quality suffers, and consumers don't get fair prices that come from healthy market competition. Everything is standardized at the largest scale at which the monopoly operates, so Starbucks in bumfuck, Arkansas charges the same as Manhattan or Beverly Hills. This creates vulnerabilities in the ecosystem of markets that are similar to the dangers of monocrop cultivation, with complex failure modes that endanger entire market segments. If Starbucks fails, coffee everywhere suffers. If Microsoft fails, the long tail effects endanger western civilization. Monopolies aren't just a matter of paychecks and fairness for the little people, but are threats to the well-being of civilizations as systems and supply chains have single points of failure. It may be desirable to cap the wealth and/or market share of a given company. Once a company achieves its legal limit, it can no longer advertise or market existing products, or something like that. This could force markets to create interoperability standards to achieve maximum roi, diversifying competition in all markets, and create better incentives for long term supply chain security. It also removes many opportunities for graft and corruption.
- aliswe 5y ago
  > Starbucks will set up shop next to small cafes and offer lower prices until they've driven the other shop to close up. Once this is done, they will raise the prices back to standard. source if fact?
  - robbedpeter 5y ago
    https://money.cnn.com/2006/09/26/news/companies/starbucks/ https://money.cnn.com/2006/09/26/news/companies/starbucks/ https://nymag.com/intelligencer/2017/12/open-markets-institute-antitrust-for-silicon-valley.html https://nymag.com/intelligencer/2017/12/open-markets-institu... There are myriad examples of Starbucks predatory pricing strategies, among all sorts of other global monopolistic hijinks over the last two decades.
    - perl4ever 5y ago
      There is a style of argumentation on the Internet that I find really bewildering. Someone asserts a fact, someone else counters with incompatible (asserted) facts, and then the first person comes up with more things in support of their original claim. How is that supposed to work, in the abstract? If I say swans are white, and you say "there are black swans everywhere where I live", what is the relevance of me countering with evidence (of whatever quality) of swans being white? For most of my life, I've separated this sort of behavior from "real life" and kind of assumed that there were "internet people" who always will be inscrutable to me. But disturbingly I've run into a few people IRL in recent years who do it too. *https://en.wikipedia.org/wiki/Black_swan https://en.wikipedia.org/wiki/Black_swan
- perl4ever 5y ago
  >once a company becomes big enough, it's literally impossible for small business to compete I understand that storytelling is a basic human thing, and repeating a good story is something virtually everybody does, including me, constantly and compulsively. But a story that is false can't provide useful guidance, can it? What is the attraction in repeating it in the face of incompatible facts? >Many small cafes will simply shut down and not even fight when a Starbucks pops up nearby. I literally used to work in the downtown of a small city, diagonally across an intersection from a Starbucks, and it was, for a time, an almost daily ritual for my office to go there. But there was another coffee shop basically the same straight-line distance to the west. And there was a donuts & coffee place a few meters to the north. Some people (well, a lot) only go to Starbucks. But that's a choice, or peer pressure, or a mental trap, not some kind of economic hegemony. Or for all I know people actually like the coffee. Why do similar businesses locate near each other? Many people have noticed this pattern besides me; I bet you can find more by searching the internet, if you will accept that it happens in the first place. Another instance: I can think of two places in my area right offhand where there is a Rite-Aid and a CVS as close as possible to each other.

dehrmann 5y ago

That, and Starbucks and independent coffee shops sell a different product.

perl4ever 5y ago
I think everybody sells a slightly different product. I see, and other people have also noticed, that similar businesses often cluster together. How could this be explained, except by them adjusting their offerings on a bunch of dimensions so that they sort customers between them and avoid direct competition?

robbedpeter 5y ago

Starbucks will set up shop next to small cafes and offer lower prices until they've driven the other shop to close up. Once this is done, they will raise the prices back to standard. Starbucks is a great case study because they can even afford to give away free coffee long enough to shut down any small business - they have an unbeatable advantage. Many small cafes will simply shut down and not even fight when a Starbucks pops up nearby. It's the same with Walmart, Amazon, Google, etc - once a company becomes big enough, it's literally impossible for small business to compete. Quality suffers, and consumers don't get fair prices that come from healthy market competition. Everything is standardized at the largest scale at which the monopoly operates, so Starbucks in bumfuck, Arkansas charges the same as Manhattan or Beverly Hills. This creates vulnerabilities in the ecosystem of markets that are similar to the dangers of monocrop cultivation, with complex failure modes that endanger entire market segments. If Starbucks fails, coffee everywhere suffers. If Microsoft fails, the long tail effects endanger western civilization. Monopolies aren't just a matter of paychecks and fairness for the little people, but are threats to the well-being of civilizations as systems and supply chains have single points of failure. It may be desirable to cap the wealth and/or market share of a given company. Once a company achieves its legal limit, it can no longer advertise or market existing products, or something like that. This could force markets to create interoperability standards to achieve maximum roi, diversifying competition in all markets, and create better incentives for long term supply chain security. It also removes many opportunities for graft and corruption.

aliswe 5y ago
> Starbucks will set up shop next to small cafes and offer lower prices until they've driven the other shop to close up. Once this is done, they will raise the prices back to standard. source if fact?
- robbedpeter 5y ago
  https://money.cnn.com/2006/09/26/news/companies/starbucks/ https://money.cnn.com/2006/09/26/news/companies/starbucks/ https://nymag.com/intelligencer/2017/12/open-markets-institute-antitrust-for-silicon-valley.html https://nymag.com/intelligencer/2017/12/open-markets-institu... There are myriad examples of Starbucks predatory pricing strategies, among all sorts of other global monopolistic hijinks over the last two decades.
  - perl4ever 5y ago
    There is a style of argumentation on the Internet that I find really bewildering. Someone asserts a fact, someone else counters with incompatible (asserted) facts, and then the first person comes up with more things in support of their original claim. How is that supposed to work, in the abstract? If I say swans are white, and you say "there are black swans everywhere where I live", what is the relevance of me countering with evidence (of whatever quality) of swans being white? For most of my life, I've separated this sort of behavior from "real life" and kind of assumed that there were "internet people" who always will be inscrutable to me. But disturbingly I've run into a few people IRL in recent years who do it too. *https://en.wikipedia.org/wiki/Black_swan https://en.wikipedia.org/wiki/Black_swan
perl4ever 5y ago
>once a company becomes big enough, it's literally impossible for small business to compete I understand that storytelling is a basic human thing, and repeating a good story is something virtually everybody does, including me, constantly and compulsively. But a story that is false can't provide useful guidance, can it? What is the attraction in repeating it in the face of incompatible facts? >Many small cafes will simply shut down and not even fight when a Starbucks pops up nearby. I literally used to work in the downtown of a small city, diagonally across an intersection from a Starbucks, and it was, for a time, an almost daily ritual for my office to go there. But there was another coffee shop basically the same straight-line distance to the west. And there was a donuts & coffee place a few meters to the north. Some people (well, a lot) only go to Starbucks. But that's a choice, or peer pressure, or a mental trap, not some kind of economic hegemony. Or for all I know people actually like the coffee. Why do similar businesses locate near each other? Many people have noticed this pattern besides me; I bet you can find more by searching the internet, if you will accept that it happens in the first place. Another instance: I can think of two places in my area right offhand where there is a Rite-Aid and a CVS as close as possible to each other.