le to cover its operating expenses as well as other firms in the industry.-State of the IndustryThe face of the coffee industry has changed dramatically this decade. The number of coffee shops in operations has more than quadrupled since 1991. As of 1997 eight thousand specialty coffee outlets were in operation in the United States. Starbucks good fortune in this industry motivated many aspiring rivals in this industry to pursue a plan of expansion. Analysts of this of the coffee specialty arena believe there is room for two or three major competitors. As of 1997 Starbucks closest competitor, Second Cup which is based mainly in Canada was less than a third of its size. As of August of 1999 Starbucks had opened 2,152 stores in the United States. Starbucks also opened 252 stores internationally. Most of Starbucks international stores were located along the Pacific Rim and the United Kingdom. During the fiscal year of 2000 Starbucks plans to open 600 new stores, 450 in the United States, the rest abroad.-Competitors and their stanceStarbucks may eventually encounter formidable competition. Before 1997 no adversary of Starbucks had as many as 250 stores. In contrast Starbucks had opened over 1500. However according to the Starbucks case analysis there were at least twenty different local and regional chains that wanted to become serious rivals of Starbucks. Such prospects included New World Coffee, Coffee People, Coffee Station, Java Centrale, and Caribou Coffee. Many observers expected these chains to merge to better validate themselves as an alternative to Starbucks. New World in particular is making a concerted effort to compete with Starbucks. In August of 1998 New World purchased Manhattan Bagel Inc. Currently New World not only sells coffee but also is the second largest Bagel retailer in the United States. Also New World Coffee purchased Chesapeake Bagel Bakery. New World's identity is a franchise that sells specialty co...
