9 - Tacit Collusion - Starbucks

Although there is no clear evidence of Starbucks collusion, but we can guess it employs strategies to discourage competitors to directly compete. Think about, how many coffee places we know within our own city? Maybe 3 or 4, and Starbucks is mostly one of them. So why is it this way? Starbucks is continually sending soft signals but providing good quality of product with excellent service which is consistent almost every Starbucks store. Other food-chain competitors such as McDonalds and Dunkin are focused on food items and Coffee as side item, whereas for Starbucks Coffee is the main product and even Starbucks not trying to enter food market whole heartily. Starbucks strategy about food is just to offer minimum options with just enough food which would go along coffee. This strategy might not be threating to McDonalds or Dunkin, because as food is side items for Starbucks, Coffee is side item for them.

Although this non-forcible market co-operation working well for these companies, but this really limits options for the customers. For better food options, someone will look for better food chains or local stores, but for better quality they must to go Starbucks or some local coffee shop which is serving at par or better coffee with similar or less price than Starbucks. For e.g. in Memphis, French Truck coffee is one such local vendor for quality coffee. But they are not available at all places like Starbucks.