Caribou Coffee, with 430 stores, is the nation's second largest chain of coffee shops behind Starbucks. Both chains seek to provide the highest quality product and service. Which of the following statements is accurate?
A) Because Caribou has fewer outlets, it is using a focused strategy.
B) Because Starbucks was first in the market, it is the differentiated firm.
C) Both Caribou and Starbucks are using the cost leadership strategy based on economies of scale.
D) Caribou is trying to out differentiate Starbucks based on store atmosphere, being environmentally friendly, and free WiFi.

Question

Quizplus · Accepted Answer

Caribou is attempting to differentiate itself from Starbucks based on various factors such as the store atmosphere, environmental friendliness, and free WiFi. This is supported by the fact that the question states that both Caribou and Starbucks are seeking to provide the highest quality product and service, indicating that they are both pursuing a differentiation strategy. Option A and C are incorrect because they suggest that Caribou is using a focused or cost leadership strategy, respectively, which is inconsistent with the information provided in the question. Option B is incorrect because being the first in the market does not automatically make Starbucks the differentiated firm.

Caribou Coffee, with 430 Stores, Is the Nation's Second Largest