About starbucks market power in theory

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Reference no: EM131669583

Read the following article:

"Starbucks is known for roasting coffee. But in the case of the Seattle-based giant versus a small, family-run coffee operation, Starbucks itself got roasted. The company just lost a 12-year legal battle in which it demanded that Wolfe's Borough Coffee in New Hampshire stop selling a blend called "Mister Charbucks." Wolfe's Borough Coffee CEO Jim Clark appeared on "Street Signs" to discuss the lawsuit.

Though he won it, Clark told CNBC's Mandy Drury and Brian Sullivan that the stress has been brutal and that the publicity has not helped his business, which he and his wife run.

Starbucks sent CNBC the following statement:

"As a responsible trademark owner, Starbucks must take appropriate steps to protect the strengths of our marks. This approach to protecting trademark rights is consistent with the company's overall strategy of upholding the integrity of its intellectual property. ... Of note, this case did not involve damages. Starbucks was only asking for an injunction against the use of "Charbucks." This decision simply denies that request. "

A) Why do you think Starbucks is willing to incur the expense of (litigiously) fighting against small coffee shops who stray uncomfortably close to Starbucks’ brand?

b) What does this story suggest about Starbucks’ market power in theory (e.g., just looking at market share) vs. in reality (e.g., looking at its actions in cases such as these)?

Reference no: EM131669583

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