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by kuschku 3206 days ago
Because Starbucks has found a carefully balanced point between being affordable enough that it has mainstream appeal, and expensive enough that it seems premium.

Any change, absolute or relative, would reduce their margin.

1 comments

Do you claim that the current price of coffee beans is the price that happens to maximise Starbucks' profits? (This seems implausible to me, unless Starbucks has fairly strong control over the price of coffee beans.)

Or is your claim more narrow than that?

My claim is that the current price of coffee beans happens by coincidence to be close to the optimum for Starbucks’ profits, and any major change would be a disadvantage.