Close competition validates a business sector. "This intersection has four gas stations--let's stop at one now, like everybody else has." In fact, like the ma

Close competition validates a business sector. "This intersection has four gas stations--let's stop at one now, like everybody else has." In fact, like the manager implies, it's more likely that Second Cup will be stealing business from Starbucks than vice versa! It's very simple. Almost every local and visitor who notices the two coffee shops will automatically think Second Cup must be much better if it's surviving against a franchise setup across the street! Their curiosity will get the better of them. The only way Second Cup can lose is if they have a pessimistic attitude with the customers, because word will spread. The local newspaper will write an article about the coffee business in three months time--it will either say Starbucks is a welcome addition; that they're hurting small businesses; or, in the best case, that both businesses are doing well. It's free publicity in any case. I think Second Cup will see an increase in out-of-town visitors. A lot of visitors will have already tried Starbucks coffee elsewhere, and when they're asking for recommendations, the locals will recommend 100 Coffee Street where Starbucks and Second Cup are, than Trevor's Coffee at 23 Vine Drive where there's only one option. But Second Cup won't only benefit from out of town visitors. The locals will respect Second Cup even more for being the little guy. (Remember, until paired up with the big guy, they were just another small business, like a Laundromat.) Next, anybody who wants coffee is now much more likely just to drive down that street, and make up their mind on which business to visit while driving there (customers know they don't have to make a decision until they get there, and if one is closed or busy, the other one will be open.) Third, businessmen have a safe bet on taking clients to a coffee shop, as well--whether the client wants a Starbucks they're familiar with or a local flavor. Finally, anybody who runs errands to pick up coffee for a group of employees can easily pickup coffee ordered from either place. The true business that would be hurt in this case would be a 3rd, lonely coffee shop in that town.