OMPANY DESCRIPTION

In case you didn't understand Starbucks is everywhere. The Starbucks Coffee Corporation was based in 1985 in Seattle,
Washington (International Directory of Company Histories, 2000). Starbucks is advised the number one specialty coffee retailer in
the world, with more than 16,000 coffee stores in over 35 nations over the globe. Each outlet boasts value coffee beverages, noncaffeinatedbeverages, as well as nourishment items. In supplement, Starbucks boasts a broad kind of baked coffee beans as well as
coffee and tea brewing accessories. The Starbucks Corporation owns roughly 9,000 stores worldwide; most of them established in
the United States of America. Licensees function more than 7,400 added flats worldwide (most of them
in aerodromes and buying centers). Starbucksmakes, deals, and markets ready-to-drink off-the-counter embodied beverages as
well as their own ice elite line. Starbucks furthermoreowns the Seattles Best Coffee emblem as well as the Torrefazione Italian
coffee brand.
Second Cup begun their business in 1975 as a buying shopping centre kiosk that only traded entire bean coffee.
Although unfastening10 years previous than its American equivalent, Second Cup still lags behind in sales
and worldwide representation. On a nationwidescale, although, Second cup has become the biggest Canadian belongs to specialty
coffee retailer. (Second Cup: Our Story, 2008). Second Cup has developed to more than 360 coffee stores over Canada and 15
coffee stores internationally in nations for exampleTurkey, Lebanon, Kuwait, The United Arab Emirates, Saudi Arabia and Oman.
(Second Cup Coffee, 2000) The Second Cup merchandiseline comprises of more than 30 premium coffees, specialty beverages as
well as complimentary nourishment items. In 2002, Second Cup became part of the Cara procedure family string of connections of
restaurants. Second Cup furthermore made their assortment of premium coffee combines and their well liked with added
flavour coffee accessible for buy in Canadian shopping centres Second Cup, much like Starbucks in the U.S., is the biggest Canadian
coffee franchisor (Second Cup: Our Story, 2008).
ANALYSIS OF THE COFFEE-SHOP-INDUSTRY IN NORTH AMERICA
By the end of 2007 the dimensions of the North American coffee shop market was roughly 16 billion U.S. dollars, while U.S.
marketcapacity is about US$ 12.9Billion (81%) and the Canadian market capacity is about US$ 3.1Billion (19%). Looking at the
marketcapacity of the past 4 years one can effortlessly observe the fast and exponential development of the coffee
retail commerce in North America.
Mintel, a worldwide foremost of comparable newspapers, merchandise, and buyer understanding, recounts the American coffee
shop market saying that the market skilled 157% development between 2000 ($3,258m) and 2005 to come to some $8,372m,
andregardless of being a maturing market, coffee stores are set to extend full vapour ahead (Mintel, 2008).
Mintel identically states that over the next five years, sales are anticipated to augment by a farther 125% to come
to an outstanding $18,839m by 2010 (Mintel, 2008). This declaration from Mintel illustrates the tremendous possibilities present
for businesses that invest in the coffee shop market. Alternatively, the detail that Starbucks is overriding the market in the U.S.
with a market share of 73% (Mintel, 2008), and with Tim Hortons retaining 62% (Fineman & Scanlan, 2006) of the Canadian coffee
market share, new businesses have restricted to no space for development in North America. Second Cups market share at the
Canadian market is about 8%.
Upon the written check of these details and statistical facts and numbers, possibilities for actually established coffee
retail businessesin North America appear nearly unlimited. Conversely, one could gaze at coffee from Starbucks and Second Cup as
a luxury good which may not inevitably be spent in peoples every day life due to the detail that coffee can be bought in
every food shop shop at a much lesser price. In times of a international economic urgent position, particularly influencing North
America, the most of persons might be reluctant to spend five dollars on a latte and be more probable to start producing their own
coffee at dwelling and take it on their way to work in a thermos mug rather than of halting by their very well liked coffee shop.
Another significant component to address in thisinvestigation is the transport charges affiliated with the importation of coffee. With
coffee imported mostly from South America (ICO Statistics, 1994), but furthermore from Africa and the South Asian
Pacific, transport charges is one of the major costs affiliated with the retailing of coffee. With

oil cost increasing, these charges will bear an exponential boost which will in turn sway the cost of coffee at retail.
Another component to take into concern with the cost of coffee at retail is the change of the world climate.
Global heating andexpanded contamination in evolving nations, where coffee is accumulated, might have a important influence on
the output of coffee,therefore identically affecting the world charges affiliated with said coffee.
ASSESSMENT OF THE COMPANIES
Since its beginning, Starbucks has strived to be a overriding force in the coffee industry. With its highly
affective trading methods andcomparable power it
has accomplished large achievement after what any individual considered fathomable. With its pursuit
ofdevelopment, command of unaligned vendors, and licensees, Starbucks is going at such an unbelievable rate that
the business has even faced litigation in relative to what some call its monopolist nature.
Starbucks large comparable power are its specialty coffees, its customization, resting natural environment and its ubiquity; one can
find a Starbucks apparently universal these days. Reputation is furthermore a gigantic comparable advantage; Starbucks prides
itself on its fine goods and service that cant be discovered in other coffee shops. Other than coffee, the basic facet of Starbucks is
its service. In 2005, it was entitled in Forbes Magazine as one of the best businesses to work for. This is an often unseen facet of
itsachievement, but a business will not flourish without employees who are correctly taught as well as joyous with
their occupations(Gamble & Thompson, 1999). Because it attracts value workers, it places itself before numerous other coffee
shops. Customers inquirefor such exact beverages that an untrained employee could not probably wish to make correctly.
Starbucks list is habitually expandingand its comparable for demonstration will not be denied. For example, stroll into any
Starbucks and hear to the instructions takinglocation tall non-fat latte or venti ginger break latte;
the list is varied and relentlessly in expansion. The Starbucks ambience is another component appealing customers. Starbucks
has asking for and snug furnishings as well as wireless internet attachments in every location; a clientele could find him or herself
in the locality for hours upon hours, premier to more sales (Enright, 2005).
Starbucks is advised a monopoly by numerous unaligned coffee shop owners. In detail, in 2006 Starbucks was taken to court by
anunaligned specialty coffeehouse because of its monopolist environment (Firmani, 2006). Starbucks has often paid higher than the
market-value for its leases so long as the proprietor denies to open another coffee shop in the vicinity. Steve Berman,
an advocate for an unaligned coffee shop operator, has asserted that Starbucks is a monopolist and Starbucks trading practices are
more about gettingrelieve of affray other than making good coffee.
Second Cups notion is in line with Starbucks and it boasts a exclusive coffee experience. Second Cup shops are furnished and are
oftentopped up with persons revising and gathering for a coffee. Competitively talking, from a economic viewpoint, Second Cup is
notaccomplishing as well as Starbucks. However, the business is increasing and presently has almost 300 shops in Canada.
Metropolisesfor example Toronto and Montreal have a heavier engrossment of Second Cup shops and are often established very
close to Starbucks cafs. The coffee assisted in Second Cup is furthermore high value and
the beverages accessible powerfully competitor those in Starbucks. For demonstration, the caramel Coretto is a drink Second
Cup boasts that has no genuine identical in any other coffee shop. Essentially, this discloses why there will habitually be room for
other coffee stores other than Starbucks: they cant supply every drink. Also, Second Cup boasts an oasis notion, where they are
the district protected location to meet.
ANALYSIS OF CONSUMERS
The Starbucks Coffee Company tends to goal buyers between the ages of 18 and 34. This age
bracket comprises mainly of lifetime Ybuyers, along with a little percentage of lifetime X buyers who are inclined to spend more on
convenience pieces than precedinggenerations. Their buyer groundwork is not restricted to this demographic, although, as
they furthermore offer non-caffeinatedbeverages with young children in brain as well as non-coffee drinkers. Starbucks tends
to goal both men and women proposing a broadkind of dinks, and more lately nourishment, which apply to both sexes. Patrons of
Starbucks are mostly well educated with earnings thatpass $75,000. It has been discovered that forty-six per hundred of those

who profit from more than $75,000 every year accept to buying coffee from Starbucks or alike high-end
coffee stores as in evaluation with just thirty-two per hundred of all coffee drinkers (Dawidowska, 2002). Starbucks has
made paces to apply to clients all through the altering communal tendencies, proposing equitabletrade coffee and nonfat choices for those who desire to assist to evolving nations and those who are observing their waistline. Starbucks
has evolved a form to apply to a international buyer and intentionally boasts the identical goods at every position and strives for
consistency.
Second Cup Ltd. tends to goal buyers in their early twenties to their mid to late thirties. This bracket comprises of
a blend of lifetime Y and X buyers, and is intensified mainly between the two generations. When it arrives to
gender, although, it seems that Second Cuprequests to a clientele that is mainly feminine, with
women producing up nearly eighty per hundred of the patrons. Second Cup has madeproceeds to stay present with
the communal tendencies of consumers. (Mazurkewich, 2007) Although not formally equitable trade, Second Cup asserts that
it buys a premium that far passes the market cost for coffee, in an effort to double-check that those who makeit
are adequately paid. They even proceed a step farther by assisting to the Foster Parents Plan
to assist young children in evolvingcountries. (Mazurkewich, 2007) Second Cup furthermore presents a broad assortment of fat free
or reduced fat pieces, in an try toappeal clients who are seeking to sustain a wholesome lifestyle.
COMPETITIVE ANALYSIS
In the Canadian market for coffee retail and coffee stores, there are rather a couple of unaligned coffee shop proprietors living other
than Starbucks or Second Cup. One illustration of the kind discerned in the market may be glimpsed when strolling round university
campuses nation-wide. There are generally a multitude of coffee stores of distinct kinds and ownerships to provide for the
highlyintensified demand. The most significant Canadian competitor for both Starbucks and Second Cup in Canada is the
highly thriving Tim Hortons brand. Due to its cost oriented trading scheme, whereas Tim Hortons does
not supply the choices of organising high-scale, espresso kind coffees, it is a important competitor when
it arrives to appealing the normal buyers who might be less knowing about coffee and only accept the cost difference. Starbucks
and Second Cup still endure, although, due to their proficiency to investigate the market and the demand for higher-scale coffees.
They supply another market segment with distinct goods at higher prices. Other, lessimportant, competitors in Canada are
Timothys, Le Caffuccino, and other in the local area belongs to little dimensions coffee stores,with
their major comparable for demonstration being their little dimensions and the character affiliated with each shop.
ANALYSIS OF THE MARKETING STRATEGY
Starbucks positioning scheme is amidst the most productive in all brands. It has one of the most recognizable logos
and almost everyindividual in North America could notify you what Starbucks is. The likeness of Starbucks nearly has a high
end seem to it; a clienteleproceeds in for a cup of coffee or tea but departs out with an know-how that they will
not effortlessly forget. Starbucks isnt just a coffee shop but rather a third environment, exception from work and
the dwelling, a location where one can arrive and unwind, rest or managework (Starbucks Marketing Strategy, 2008). Starbucks
has been referenced in numerous TV displays and videos farther solidifying itscontain as the coffee dwelling of the world. Going into
Starbucks, a clientele understands that they will not only get their first genuinecup of coffee but furthermore a exclusive knowhow with melodies that adds to the Starbucks experience. Starbucks can be discoveredin the middle of downtowns as well as in
more suburban locales, supplementing to its likeness of being a location between dwelling and work. As for the emblem, Starbucks
had expended very little cash on advocating, favouring rather than to construct the emblem cup by cup with clients and count on
word-of-mouth and the apply of its storefronts. The business was, although, committed in a increasingeffort to continue the
Starbucks emblem and penetrate new markets. In supplement to increasing internationally, embarking into iceelite partnering with
licensees, and evolving specialty and mail-order sales, Starbucks had lately started trading its coffees in supermarkets. The
Starbucks emblem is apparently universal today.
Second Cups logo and likeness is rapidly evolving as recognizable as Starbucks in Canada. To some it is advised Canadas
Starbucks, but to numerous more it is a certifiable coffeehouse that assists exclusive combines and tasty pastries. Its likeness is
quaint and can be advised the neighbourhood oasis. Presently Second Cup is starting to deal its coffee to Canadian supermarkets.

Customized merchandising flats offer a very broad assortment of Second Cup's better variety of goods from premium
exclusivecombines to well liked with added flavour coffees. Customers can buy entire bean coffee or grind it to their own
specifications in-store. Conveniently pre-ground, pre-packaged coffee is furthermore accessible at the kiosk. Currently, Second Cup
is a strike in the Middle-East even though it is exclusively Canadian. The achievement that Second Cup is glimpsing in the MiddleEast is due to marketunderstanding, quick-witted advancement of a Canadian merchandise and powerful partnerships in the region.
While thriving branding is all about setting up measures, next methods and being reliable, Second Cup has had to make
some changes to match the claims of its new clients. While only about 30% of Canadian purchasers stay in the caf
to spend their buys, 90% of Middle Easterners do. As aoutcome, cafs there are bigger, and the conceive and layout
are changed, with a aim on solace other than capacity and speed. This isexclusive because Second Cups positioning in the MiddleEast is distinct than the positioning in Canada.
The Starbucks merchandise scheme is to diversify beverages circulated to purchasers and to stand by
their merchandise inguaranteeing clients that the coffee they are consuming is the best in the world.
The business begun by trading bean coffee, but shortlyrecognized the promise in making and trading distinct types of beverages.
These distinct kinds of coffee founded beverages were notassisted before and the business only recognized that it would be a
good merchandise scheme to integrate these drinks. Starbucksfurthermore deals a exclusive high value emblem of tea called Tazo
tea. The major aim behind their merchandise scheme is the creation of seen merchandise worth to clients so as to enhance
their clientele experience. Starbucks strives to appeal new buyers, oftenencouraging cyclic goods (Anders, 2001).
Second Cup presents their goods in a distinct light. It focuses and buys into most of its assets in depicting the perfect Canadian
coffee shop with an asking for central design. Although supplying new and good value coffee for their purchasers is one of
their main concerns,the utmost absolutely crucial for Second Cup is the general know-how of buying and enjoying the coffee.
Second Cup encouragesvigorously their independently belongs to and exclusively Canadian likeness, certain
thing their major competitor, Starbucks, couldnot ever strive to achieve. Equally, Second Cup habitually impels for higher sales in its
coffee and tea accessories so as to fartherencourage their goods in the dwellings of their consumers.
When analyzing Starbucks list board, a new buyer might be shock at the relation expensiveness of its coffees. However, what
theclientele really buys for is not only the normalized value of the coffee and clientele service they obtain, but identically the
ambience and the general experience. One will not refute the significance of branding when it arrives to Starbucks products. Not
only is it satisfying to the flavour to most buyers, but because of the high achievement in the word-ofmouth methods, some buyers may blindly purchaseStarbucks goods, easily because they convey the Starbucks brand. Because of
their function as a market foremost and their powerfulemblem title Starbucks is in the place to command the cost of the high scale
coffee market products.
Due to the likenesses between Starbucks and Second Cups goods and services, the last cited sees
itself struggled to supply theidentical value of beverages at smaller charges, to appeal clients into its stores. Using the
competitor groundwork charge scheme,Second Cup is adept to endure, if perhaps not flourish, as a major competitor in the
Canadian coffee shop industry.
The Starbucks Coffee Company has made endeavours to use a business upright trading system. They own their
own output amenities,warehouses and retail shops, this permits for them to maximize earnings and boost the consistency of their
product. Even the coffee beans utilised are those that are developed and baked expressly for the company. Beans
are made and labelled founded upon theirexact flavour and value by the business itself. As well, Starbucks does
not permit franchising, but rather than permits for authorising, in which the Starbucks Corporation keeps full order of
the administration and procedures of each one-by-one cafe. This scheme is utilisedby
the business to sustain the value and measures that they have have established, no issue where the retail outlet
is located,therefore furthering standardization. Utilizing the business upright trading scheme, Starbucks has
been adept to sustain its better valuefrom start to finish. The alternative of position for new shops has
been exceedingly thriving, often selecting to be established roundhefty base traffic, revealing itself to a gigantic market
of promise customers. Starbucks has retail shops disperse all over the world. Starbucks has furthermore become a multi-

channel vendor, supplying its coffees in certain shopping centres for buyers to buy andrelish at dwelling, as well as in their cafes
(Starbucks Marketing Audit, 2008).
Second Cup Ltd. utilizes a contractual upright trading scheme for its circulation channel. Second Cup Ltd has selected to franchise
retail outlets, as are against to sustaining entire command over them. In managing this they accept as factual that they permit for
eachposition to disagree from each other just sufficient to better match the likes of buyers in the area. Over ninety percent of the
retail outlets are franchised out, producing it Canadas biggest specialty coffee cafe franchisor.
Retail positions are usually established in high traffic areas; although the huge most of shops are established in Canada.
In alignment to sustain consistency and high valueservice, Second Cup has supplied its franchisees teaching and directions for how
to make its list items. Second Cup has no long-runagreements with coffee bean suppliers and therefore has little command over
the cost they may have to yield for coffee at any grantedtime. They rely very powerfully on the chronicled connections they
have constructed with suppliers to assurance the accessibility andvalue of the coffee they obtain. This may origin the consistency of
the coffee to be questioned. Second Cup has furthermore madeendeavours to become a multi-channel vendor, trading its coffees
in choose shopping centres (David Bloom, 2007).
The merchandise of Starbucks is the entire experience: the first real cup of coffee, well taught and joyous baristas, and
a comfortableatmosphere. Starbucks does not generally offer promotional charges on
their beverages, which assists the business stay consistent;although, it furthermore illustrates Starbucks trading method being
more concentrated on merchandise acknowledgement and phrase of mouth. Starbucks expends little or
no cash on advocating which is a occurrence numerous have discerned as exclusive to luxury brands. For example, while Tim
Hortons or McDonalds may have commercials on TV or in the bulletin, Starbucks title or logo is nearlynot
ever brandished to clients other than on the shop itself. The charges of Starbucks coffee manage depart a demographic out
whomanage not desire to be expending five or six dollars for a specialty drink. One can now observe Starbucks answering to
the freshlycomparable coffee retail market by seeking to appeal cost perceptive clients through customary advertising.
Starbucks power lays in itsmerchandise diversity and expansion in the market. In periods of position, Starbucks has finished well in
their set about to genuineestate. The business favours to cluster its shops in densely populated localities, giving the feeling that
Starbucks is everywhere. Market share and income have expanded because of
this scheme, producing it identically more inexpensive to strategically circulategoods and components required on a just-in-time
basis. Starbucks has furthermore partnered itself wisely with Barnes and Noble bookstore in the US and with Chapters in Canada
(Isidro, 2004). This set about permitted Starbucks to hold clients longer in theirshops while
reading publications and publications and, of course, buying more coffee. Starbucks
sees possibilities in value goods, theneed of customary advancement, and higher charges to convey in more income in evaluation to
other coffeehouses in clustered locations.
If Starbucks does little advocating, Second Cup does even less. Established in 1975, Second Cup
has constructed its status on valuecoffee and trusted patronage through phrase of mouth. Much resembling Starbucks, Second Cup
has value coffee and a assortment ofnourishment which encompasses grilled sandwiches and will have morning serving of
food sandwiches subsequent this year. With a newleader, Stacey Mowbray, Second Cup is seeking to win clients with
redesigned shops in upscale positions (Strauss, 2008) Second Cup is not almost as ubiquitous as Starbucks, however; it
concentrates itself in downtown localities much like Starbucks does.
CONCLUSION
The trading schemes utilized by Starbucks and Second Cup are very alike, if not identical. With minor dissimilarities for
exampledistinct market segmentation and charge schemes, cost and value-delivery is changed, therefore producing these
entities somewhatdissimilar. Alternatively, their development schemes both aim on Product development due to
their currently comprehensive market positioning. Both Starbucks and Second Cup identically address their macro schemes to be
the centre aim of their cafs. Converging most of their assets and power on clientele, operational, and merchandise excellence,
they conceive an upscale natural environmentwhich develops sentiments of richness and luxury, therefore going by
car the charges and value up-the-roof. Starbucks is still doing wellin overshadowing most of its affray in the United States. Second

Cup, although, is gradually profiting ground in the Canadian market,therefore weakening the monopolistic environment of Starbucks
and night out the competition. It is still to be glimpsed if the Canadian market will answer in a alike way as the American market, or
if, in detail, Second Cup will do well in overpowering Starbucks Americanattractiveness to gain superiority in Canadian markets.

BIBLIOGRAPHY
ANDERS, George, (2001, July), Starbucks brews a new strategy, Retrieved November 10, 2008 from Fast Company:
http://www.fastcompany.com/magazine/49/utw.html
BLOOM, David, (2007, April 11), 2006 Annual Report, Retrieved November 17, 2008, from Second Cup Royalty Income
Fund:http://www.secondcupincomefund.com/2006_Annual_Report.pdf.
DAWIDOWSKA, K., (2002, April 1), CAFFEINE OVERLOAD, Agree that coffee from gourmet coffee stores is too
expensive,. Retrieved November 17, 2008, from Business
Network: http://findarticles.com/p/articles/mi_m4021/is_2002_April_1/ai_87109753.
ENRIGHT, Greg, (2005, February 23), Second Cup brews in-store wireless access, Retrieved on November 10, 2008, from IT
World Canada: http://www.itworldcanada.com/a/Daily-News/00f3373f2cb8-43d6-8835-7a0e5047320b.html

FINEMAN, Josh & David SCANLAN, (2006, March 23), Tim Hortons raises C$783 Million
in initial proposing (update 1), Retrieved November 11, 2008, from Bloomberg News
US:http://www.bloomberg.com/apps/news?
pid=10000103&sid=aVbau_WUTixk&refer=news_index

FIRMANI, Mark, (2006, September 25), Starbucks suspect of mishandling monopoly power
in violation of 'Sherman Act, Retrieved November 10, 2008 from Press Release
Point:http://www.pressreleasepoint.com/starbucks-accused-abusing-monopoly-power-violationsherman-act
GAMBLE, John E. & Arthur A. THOMPSON, (1999), Starbucks Corporation, Retrieved on November 10, 2008, from McGrawHill Companies:http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html

ICO Statistics, (1994, May), Hombres de Caf, Retrieved on November 11, 2008, from Coffee
Research: http://www.coffeeresearch.org/market/exportation.htm
International Directory of Company Histories, (2000), Vol. 34, St. James Press,
Retrieved November 10, 2008 from Funding Universe:
http://www.fundinguniverse.com/company-histories/Starbucks-Corporation-CompanyHistory.html.

ISIDRO, Isabel, (2004, October 5), Learning from Starbucks: 10 Lessons for little businesses, Retrieved November 17, 2008
from Power Home Biz:http://www.powerhomebiz.com/vol144/starbucks.htm

MAZURKEWICH, K., (2007, April), Second Cup's new component escapism - it's employed .Retrieved November 17, 2008,
from Strategy:http://www.strategymag.com/articles/magazine/20070401biz.html?word=second%20cup

MINTEL, (2008), US coffee stores still easily too warm to handle, Retrieved on November 11,
2008, from Market Research World:http://www.marketresearchworld.net/index.php?
option=content&task=view&id=566&Itemid
Second Cup Coffee,(2000, May 26), Retrieved November 6 from BBC Home:http://www.bbc.co.uk/dna/h2g2/A307135

Second Cup: Our Story, (2008), Retrieved November 10, 2008, from
SecondCup.com: http://www.secondcup.com/eng/about_us.php
Starbucks Coffee (2008), Retrieved November 20, 2008, from Starbucks.com: http://www.starbucks.com/
Starbucks Marketing Audit, (2008), Retrieved November 17, 2008, from Business of
Photography: http://ricpeterson.com/ais/wp-content/uploads/2008/07/marketing-audit-example.doc

Starbucks Marketing Strategy, (2008), Retrieved November 10, 2008, from Business &
Companies:http://www.businesspme.com/uk/articles/advertising/99/Starbucks-marketingstrategy.html
STRAUSS, Marina, (2008, February 12), Second Cup fine-tunes combine with
new leader, menu, Retrieved November 17 from Globe and
Mail:https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20080212/RSECOND12