Beanz Versus Starbucks: Personality in a Cup!

Beanz Espresso Bar is located in downtown Charlottetown, Prince Edward Island, Canada. It is operating in a market with high rivalry (11 other coffee businesses in a two-block radius). The economy in Prince Edward Island has seen several diners, restaurants, and coffee shops close their doors within the past few years, while simultaneously drawing in large corporate businesses such as Starbucks and Running Room. Beanz has thus far survived the major environmental changes and managed to keep its clientele and the owners, Lori and Doug, feel it is time to either sell Beanz and leave the industry, or exploit their competitive advantages to grow and capture more market share. Beanz specializes in high-quality, baked-from-scratch food and specialty coffee beverages. The café is known for its artistic vibe, warm atmosphere, and eccentric staff. After operating Beanz for 16 years, the couple has made few changes to the decor, menu, the set-up. Internally, the company faces several issues concerning management control systems, marketing, and strategic direction. Lori and Doug must choose between five different directions for the future of Beanz.

This case is intended for use in undergraduate and graduate courses in entrepreneurship and strategy. Students are challenged to consider the future direction of Beanz, taking into consideration Lori and Doug's preferences, the external market, and the current capabilities of the company. This case incorporates four objectives. The first objective is a quick valuation of a lifestyle business. The second is to assess the changing environment in which Beanz is working. The third is to determine the role of knowledge and brand in the entrepreneurial process. The final and most important objective is to evaluate the strategic options available to the founders.

• Business Valuation
• Growth Strategy
• Exit Strategy
• Environmental Analysis
• Service Industry
• Small Business
• Coffee
• Canada