市場學Essay代寫范例：An analysis of Starbucks using Game Theory
本文是市場學專業的Essay范例，題目是“An analysis of Starbucks using Game Theory（運用博弈論分析星巴克）”，星巴克公司是一家美國跨國咖啡公司和咖啡連鎖店，在世界各地擁有2萬多家門店，其中大部分位于美國，是世界上最大的咖啡館。
星巴克的名字靈感來自于赫爾曼·梅爾維爾的經典小說《白鯨記》中的大副。該公司的使命是“激發和培育人類精神——每次一個人、一杯咖啡和一個社區”。(1)世界各地的星巴克咖啡店出售咖啡等冷熱飲料，以及糕點、零食等其他食品，以及馬克杯、杯子杯等星巴克商品。該公司的許多產品都是根據商店的位置定制的，該公司的娛樂部門負責圖書、音樂和電影的營銷。自從1971年公司成立以來，它的銷售和收入一直在迅速增長。自1987年以來，該公司平均每天開兩家店，這一事實是該公司成功的一盞明燈。
Starbucks Corporation is an American multinational coffee company and cafe chain with over 20,000 stores across the world, the majority of which are located in the United States, making it the largest coffeehouse in the world. Starbuck’s name is inspired by the character of the first mate in the Herman Melville’s all-time classic novel Moby Dick. The mission of the company is to ‘to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time’. (1) Starbuck cafes across the world sell hot and cold beverages such as coffees along with other food items such as pastries, snacks and Starbucks merchandise such as mugs and tumblers. Many of the company’s products are custom to the location of the store and the entertainment division of the company deals with marketing of books, music and movies. Ever since the company was founded in 1971, it has been growing rapidly in sale and revenues. The fact that the company has opened an average of two stores per day since 1987 is a glowing beacon of the success of the company. (2)
Starbucks first ventured into the United Kingdom when it acquired 65 coffee stores of the Seattle Coffee Company in May of 1998. (3) Today, the company serves millions of customers every day with a presence in over 50 countries around the world. Coffee is bought by the company’s coffee buyers personally travelling to the Latin America, Africa and Asia to seek out the best quality of coffee beans available and finished products are produced though Starbuck’s signature Roast enriching the flavor and balance of the coffee. The company’s first public offering was in the 26th of July 1996 and it has been listed on the NASDAQ ever since.
Here in this report, we investigate the use of games theory and simulation to evaluate and test the application of strategic leadership at Starbucks. The report also aims to critically evaluate game theory and the appropriateness of the same in the evaluation of options for strategic change/transformation.
在這篇報道中，我們調查了使用博弈論和模擬來評估和測試星巴克戰略領導力的應用。該報告還旨在批判性地評價博弈論及其在評價戰略變革/轉型的各種選擇時是否合適。
GAME THEORY博弈理論
Game theory in simple terms is the way in which a group of intelligent individuals interact and associate with each other to achieve their own goals. A game can be described as activities that people perform for either material gain or pleasure and game theory can be defined as the study and analysis of the strategic interaction between the individuals involved in the game. A game typically contains three elements: the players of the game, the strategies applied by the players and the consequences of the decisions made by each of the players. Game theory is the study and analysis of challenging scenario and using the game situations to aid in the decision making process.
簡單來說，博弈論就是一群聰明的個體為了實現自己的目標而相互影響和聯系的方式。游戲可以被描述為人們為了物質利益或娛樂而進行的活動，而博弈論可以被定義為對參與游戲的個體之間的戰略互動的研究和分析。游戲通常包含三個元素:游戲玩家，玩家所采用的策略，以及每個玩家所做決定的結果。博弈論是研究和分析具有挑戰性的情景，并利用游戲情景來幫助決策過程。
A strategy can be described as being strictly dominant, if the player ends up earning a higher payoff than any other related strategy regardless of what any of the other players do. In essence, the strategy that gives a player the highest payoff is called a strictly dominant strategy. A number of simple games can be solved by using this strategy. While using this strategy, the player analyses and compares the different strategies to decide which one of them gives the better payoff. A strategy is said to be strictly dominated, if there always exists another strategy that gives a better or same payoff compared to any other strategy for a player.
While strictly dominant strategies are powerful tools that can be used to change the flow of the game in the player’s favour, isolating the strategies and applying them to particular situations is rather difficult due to the large volumes of information that may be present. In order to identify the dominated strategies, one must be focused on the players payoff’s at the moment and mentally block out the irrelevant payoffs and strategies and isolate the relevant ones. One way to do this is to perform continuous elimination strictly dominated strategies. Once a strategy has been identified as strictly dominated, it is a rational idea not to use it since there is always a strategy better than it. By iterating this procedure, one may be able to isolate the strictly dominant strategy.
雖然嚴格的優勢策略是一種強大的工具，能夠幫助玩家改變游戲流程，但是由于存在大量的信息，所以分離策略并將其應用于特定的情境是非常困難的。為了確定劣勢策略，必須關注參與人此刻的收益，并在心理上屏蔽不相關的收益和策略，將相關的收益和策略孤立出來。一種方法是采用連續消去嚴格劣勢策略。一旦一種策略被確定為嚴格劣勢策略，不使用它是一個理性的想法，因為總有比它更好的策略。通過迭代這個過程，可以分離出嚴格優勢策略。
Game theory can be of great help in solving real life situations through the translation of the situations to gaming models and applying game theory on them. Some of the games that may be applicable in real life situations are as follows.
Prisoner’s Dilemma囚徒困境
Prisoner’s Dilemma is a classical example of a game in game theory strategy which shows why two entities, be it organizations or individuals do not cooperate with each other even through doing so will bring both of them major benefits. The formal definition of the game as defined by Albert W. Tucker is as follows:
囚徒困境是博弈論策略中一個經典的博弈例子，它說明了為什么兩個實體，無論是組織還是個人，不相互合作，即使這樣做會給雙方都帶來巨大的利益。Albert W. Tucker對游戲的正式定義如下:
“Two members of a criminal gang are arrested and imprisoned. Each prisoner is in solitary confinement with no means of speaking to or exchanging messages with the other. The police admit they don’t have enough evidence to convict the pair on the principal charge. They plan to sentence both to a year in prison on a lesser charge. Simultaneously, the police offer each prisoner a Faustian bargain. If he testifies against his partner, he will go free while the partner will get three years in prison on the main charge. Oh, yes, there is a catch … If both prisoners testify against each other; both will be sentenced to two years in jail. (4)”
The game is used to demonstrate how the distrust and completion of the individual parties towards each other may result in the worst possible option being forced upon each of them. This particular game can be applied to a number of commercial organizations such as ASDA and other chain supermarkets where are there are constant price wars or some other kinds of competition. Another relevant example is that of intense animosity between countries such as Indian and Pakistan, leading to an Arms Race, draining both of the countries’ resources and causing currency instabilities.
Sequential Game順序游戲
A sequential game is a game in game theory where a player chooses his strategies sequentially. In this form, a player has information on the strategy that the other player has chosen before he does make his move. Thus, the sequential games have a time axis and are determined and affected by the other player’s moves. This evidently implies that the player to make the first move has the power to influence the moves of the other players in the future since each player decides on the strategies they have available at the hand and the actions of the first player therefore influence their moves.
序列博弈是博弈論中的一種博弈，即博弈者按順序選擇策略。在這種形式中，一個參與人在采取行動之前就已經知道了另一個參與人所選擇的策略。因此，連續游戲有一個時間軸，并由其他玩家的行動決定和影響。這顯然意味著，采取第一步的玩家有能力在未來影響其他玩家的行動，因為每個玩家都決定了自己的策略，而第一個玩家的行動也因此影響了他們的行動。
A classic example of a real life true sequential game is that of chess, where each player takes turns in developing their strategies according to the moves made by that of his opponent. These games can be easily represented by payoff matrices and can be solved through backward induction. Another example of a common sequential game in application to real life is auctioning where each of the participants raise their auction amount based on the previous participant’s decision.
Simultaneous Game
Simultaneous games are played when each player makes his decisions without knowing the decisions or actions of the other players. In essence, simultaneous games contrast the sequential games in every sense of the word. For instance, simultaneous games do not have a time line and the actions of the players are not affected by that of each other.
An example of a true simultaneous game is rock paper scissors with each of the players taking decisions independent of each other. Normal Forms are the chosen forms of representations for simultaneous games. Bidding is another classing example of a real life simultaneous game where the participants chose their investments irrespective of what the other may have chosen.
Ultimatum Game最后通牒游戲
In game theory, ultimatum game is played between two players who have been given a specific amount of money to be divided among them. During the game, the first player makes a proposal on how to divide the cash and the second player can respond by wither accepting or rejecting the proposal. If the second player chose to accept the proposal, each of the players receives a sum of money as proposed by the first player. However, if he does not accept, neither player gets anything. This game was developed in the year 1982 by Güth, Schmittberger, and Schwarze and is often used in economic experiments.
在博弈論中，最后通牒博弈是在兩個參與者之間進行的博弈，他們得到了一定數量的錢，由他們分配。在游戲過程中，第一個玩家提出如何分配現金的建議，第二個玩家可以接受或拒絕這個建議。如果第二個玩家選擇接受提議，每個玩家都會收到一筆由第一個玩家提議的錢。然而，如果他不接受，雙方都得不到任何東西。這個游戲是由Güth、Schmittberger和Schwarze在1982年開發的，經常用于經濟實驗。
Dictator Game
The dictator game, as the name suggested is dominated by dictator and the rest of the players are merely silent partners. It is similar to the ultimatum game in some senses; however, the role of the players other than the dictator is entirely passive. In the dictator game, the main player, i.e. the dictator proposes the division of some endowment for example, a resource such as the market share or cash prize. The rest of the players, the respondents, have no choice other than to accept the division and make do with whatever resources are left remaining by the dictator. Unlike the Ultimatum game, here the role of the respondent is entirely passive.
Hotelling Game
Hotelling game in game theory is a form of competition in which two rivalling companies choose the location of their business or the prices of their goods according to that of the competitor. The game is based on the observation that by matching the location or the price of the competitor, each player cuts into the market share of their rivals and also improves on their own shares and revenues.
GAME THEORY AT STARBUCKS
Starbucks enjoyed an unprecedented growth in its early years growing from a minor local store located in Seattle to an internationally giant of coffeehouses across the world due to a number of well organized and managed executive decisions. However, in the recent years, their growth has slowed down and the company was forced to close down around 300 stores since the year 2008. This may be due to the splitting of the market share by the emerging competitors such as McDonalds, who have introduced McCafes as their foray in to the coffee business. The two companies have been doing rather well in the past few years by using different strategies. In the following sections we try to investigate and explore how the different games and game theories are applicable with respect to the competition of these companies and examine how Starbucks rose to power.
Application of Hotelling Law/Linear City Model霍特林定律/線性城市模型的應用
The rapid expansion of Starbucks can be attributed to the application of the strategies of the Linear City Model or Hotelling Law. When Starbucks entered the local markets with a local competitor, as depicted below. Considering the market is uniquely distributed, the competitor is located in the middle, allowing them to harness maximum profits. Thus convenience is the competitor’s only advantage and with the closer the Starbucks retail shop, measured by x, is to the competitor, more market share it can gain.
星巴克的快速擴張可以歸因于線性城市模型或霍特林法則策略的應用。當星巴克與當地的競爭對手進入當地市場時，如下圖所示。考慮到市場是唯一分布的，競爭對手位于中間，使他們可以利用最大的利潤。因此，便利是競爭對手的唯一優勢，用x來衡量，星巴克零售店與競爭對手的距離越近，它就能獲得更多的市場份額。
With the location and convenience being the only factors of concern, if the company opens a shop just .1 miles away from the competitor, it will gain 47.5% of the customers. However, aside from the convenience the brand armed with the Starbucks experience’ and brand name, attracts more customers with its coffee being attractive to the consumer approximately around $1 a cup. Representing the Starbucks experience cost as transportation cost t, and the coffees valued at $3 and $2.5 at Starbucks and the local competitor respectively, the customer valuing a cup of coffee worth $4, he evaluates his buying decision as follows:
Customer Utility Starbucks: WTP – (PS) = $4.0 – ($3.0) = $1.0
Customer Utility Coffee Shop: WTP – (Pc + [1-x] t) = $4.0 – ($2.5 + [1-.1]*$1.0) = $0.6
Through this example, one can demonstrate how the ‘Starbucks experience has allowed the company to take over the local markets by capturing over 70% of the market share. With no clear competition, the company was able to effectively expand at will and take out the local coffee houses. Also the company tried to centralize itself at the local customer bases to maximize the profit. In this situation, a new competitor intending to open a new store would have to open the store to either side of store and thus would gain only less than half the market share.
Now, considering the situation where a Starbucks store located is located about half a mile away from the centre of the customer base ie x=.5. Now, considering all the factors the same as above, the customer evaluation would be:
Customer Utility Starbucks: WTP – (P + x1t)” $4.0 – ($3 + .5*$1.0) = $.50
This implies that a new store can take over the market share as long as their location is less than that of Starbucks. This is one of the reasons why there was a phenomenon where the Starbucks stores clustered towards each other. By increasing the strategic location of their stores, the company was able to maximize their profits. In this situation, the best option available for a new store is to locate to the centre of the micro-market at x=0, splitting the market.
However with the Starbucks stores clustering towards each other with the term now known as ‘Starbucks in every corner’, the situation is a major deterrent to the entrepreneurs from opening new stores. The company in its clustering split its profits among the stores with the existing ones closing down and moving away, maintaining the Nash Equilibrium and playing their best responses.
Sequential game at Starbucks with respect to McDonalds Coffee shop proposal
While the company enjoyed a monopoly in the coffee business for a long time, the entering of McDonalds into the coffee industry affected the company’s profits significantly. The coffee market in the US was valued at around $1 billion by the company and the cost of future sales was estimated to around $100,000 per store. This situation can be described in game theory as follows.
Game: McDonalds’ entry decision in 2007
Actions: McDonalds’ – entry v. no entry, Starbucks – accommodate v. fight (drop prices)
Payoffs: profits are limited by the maximum portion of Starbucks revenues vulnerable to attack i.e. price sensitive and non-loyal customers.
Look Forward Reason Back: McDonald’s enters, Starbucks responds
Adjusting the 80/20 rule to 80/25, the loyal customers of the company are approximated at around $4.85 billion. While assuming that the spending habits of the rest of the customers as the same, only around $1.2 billion of the sales would come from the non-core. With the records showing that around 37% of coffee drinkers being non-loyal customers, the company stands to lose around 10% of their revenues if the non-loyal consumers switched offer to the McCafes. Considering this over a period of 5 years, the payoff to the business for accommodation would be to lose around $1,944 million in revenues.
However, if the corporation chose to fight the fast food chain by reducing their prices to an average of 2.25 per cup of coffee from $3.50 and assuming that the average transaction costs around $3, it would a significant amount of revenues from the existing customers by around 24% per year. Projecting this to a five year period, and considering that the market share of the company is fixed, the company stands to lose around $4,801 millions.
然而,如果公司選擇與快餐連鎖店通過降低他們的價格,平均每一杯咖啡從2.25 3.50美元,假設平均交易成本約3美元,它將大量的現有客戶的收入每年約24%。預計這一過程將持續5年，并考慮到該公司的市場份額是固定的，該公司將損失約48.01億美元。
Clearly, from these figures, the best option for the company, if McDonalds decides to enter the coffee industry, is to accommodate the newcomer, since opposing it would cost the company a lot more if it chooses to fight by cutting the prices of its products. Thus, in the case where McDonald’s enters the market, the strictly dominant strategy of the company is to work towards accommodating the new competitor.
Look Forward Reason Back: McDonald’s does not enter, Starbucks responds
However, if McDonald’s defers from entering the market, the company would maintain its status, holding on to its non-loyal customers and no loss of revenues would occur. This implies that as long as McDonald’s chooses not to enter the market, the company can keep its customer base, and the payoff would be zero. Another option is for the company to lower its process in case of a threat to the customer base, and then the payoff using the above calculations would be $4.8 billion. Thus the dominant strategy that the company can take is to do nothing and accommodate McDonald’s on its entry to the market if the company chooses to do so since the lowering of the prices is not worth the competition and loss of customers in accordance with the fall of revenues.
Look Forward Reason Back: McDonalds’ decision回顧原因:麥當勞的決定
Considering that the best option for Starbucks is to accommodate McDonald’s, the decision to make for McDonald’s is to decide if they could generate enough revenues in the business. In 2007, according to a statement by McDonald’s, it believes that it can generate up to $1billion in annual sales with a $100,000 investment into coffee equipment & training. Assuming that the market does not grow, extrapolating the data to five years, the payoff to McDonald’s would be a minimum of $200 million. As this data does not include the non-loyal customer base of Starbucks, this is the worst case scenario for McDonald’s.
考慮到星巴克的最佳選擇是容納麥當勞，麥當勞的決定是決定他們是否能在業務中產生足夠的收入。2007年，根據麥當勞的一份聲明，它相信，只要在咖啡設備和培訓上投資10萬美元，就能產生高達10億美元的年銷售額。假設市場沒有增長，將數據推算到五年內，麥當勞的收益至少為2億美元。由于該數據不包括星巴克的非忠實客戶群，這是麥當勞最糟糕的情況。
As the situation is only profitable to the company, McDonald’s has chosen to open over 14,000 locations in the US, aiming to cut in to the Starbucks customer base.
CONCLUSION結論
While Starbucks and McDonalds have been able to coexist in the industry, McDonald’s has been gradually cutting into the Starbucks market share. For Starbucks to survive, they will need to combat these strategies. Simply trying to hold on to the premium market will prove to be a futile attempt to retain share, as McDonalds and others have means to access the channel. While Starbucks is attempting to diversify income by diving deeper into the grocery retail market, they will still need to invest in efforts to not only retain existing customers, but be able to attract value customers without sacrificing profitability.
在星巴克和麥當勞能夠共存的同時，麥當勞也在逐步蠶食星巴克的市場份額。為了星巴克的生存，他們需要與這些策略作斗爭。僅僅試圖抓住高端市場將被證明是一種徒勞的嘗試，因為麥當勞和其他公司有途徑進入這一渠道。雖然星巴克正試圖通過深入零售市場來實現收入多元化，但他們仍然需要努力投資，不僅要留住現有的顧客，還要在不犧牲盈利能力的情況下吸引有價值的顧客。
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