
Getting it wrong over coffee - tortilla
http://brontecapital.blogspot.com/2009/11/getting-it-wrong-over-coffee.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BronteCapital+%28Bronte+Capital%29
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bootload
_"... American coffee chains (particularly Starbucks but also some of the
donut variety) have tried to break in and mostly failed. Starbucks closed most
of its stores last year after multi-million dollar losses. They couldn’t cope
with the Australian competition... I would love to be corrected – but I think
the reason has to do with our wage structure. American low-end wages are very
low indeed whereas Australia has minimum wages at quite high levels. ..."_

Could a simpler reason be that these chains make crap coffee

Failure has less to do with cost than understanding what the customer wants.
Importing a supermarket/chain concept and then expecting the locals - I'm from
Melbourne ~
[http://www.flickr.com/photos/bootload/sets/72157600195992630...](http://www.flickr.com/photos/bootload/sets/72157600195992630/)
\- exposed to multitudes of small well run cafe's with a heritage of coffee
since the 1950's means the local population are quite sophisticated in their
understanding and taste. Generic coffee chains with their cookie cutter
approach can't easily match this. Not even by price.

~~~
kscaldef
This doesn't really explain why these chains succeed in America, though.

My current theory about this has to do with the relative mobility of the
populations. Speaking personally, when I'm at home I never go to Starbucks.
There's a dozen other coffeeshops within walking distance and most make better
coffee, and I know which are which. When I'm traveling to another city,
though, I'm fairly likely to go to Starbucks simply because I know what I'll
get there (a slightly overpriced, slightly over-bitter, but adequate, latte),
while experience has shown that picking an unknown local coffeeshop leads to,
on average, a worse cup of coffee, with high variation.

~~~
bootload
_"... This doesn't really explain why these chains succeed in America, though.
..."_

How about _"acceptance of a lower standard of coffee?"_ , different culture
(Melbourne historically more influenced by Europe than America) and the
relative youth of _"business franchises"_ in Australia?

 _"... I'm fairly likely to go to Starbucks simply because I know what I'll
get there (a slightly overpriced, slightly over-bitter, but adequate, latte),
while experience has shown that picking an unknown local coffeeshop leads to,
on average, a worse cup of coffee, with high variation. ..."_

That's a good explanation - take the safe, reliable option even if it's not
quite the real thing.

I'd offer another, theory. Starbucks also happens to choose their locations
near known coffee locations to offer customers an alternative customers with
the hope of putting them out of business. This is what happened in Melbourne
and it backfired. The competition was too great ~
[http://www.melbournecoffeereview.com/2008/07/celebrate-
good-...](http://www.melbournecoffeereview.com/2008/07/celebrate-good-
times.html)

The problem of _"finding a good coffee"_ might be solvable in the US by
Starbucks. But in a city where Italian migrants created the _"Cafe`
lifestyle"_ through respect of produce, technology and setting, Starbucks
efforts are a poor imitation.

------
Tarks
This article highlights something for me, I've recently started working in a
large financial entity in London and. . . I have no idea what they actually do
here, I have very basic understanding of trades and options/exotics etc, can
anyone point me to a book or something that would give me a decent
understanding?

~~~
rfreytag
Study the advice of Charlie Munger: <http://tinyurl.com/ycmpo9v>

~~~
Tichy
Why the downvotes? I don't know Munger, but the book sounds reasonable?

~~~
rfreytag
I think people think I didn't answer the question which pertained narrowly to
learning how financial firms operated.

The thing is - Charlie Munger, Warren Buffett, Philip Carret, and a few others
DON'T operate like normal financial firms and have done spectacularly better.
To understand financial firms you need to know what works better - and
Berkshire Hathaway works a whole lot better. And Charlie Munger is Warren
Buffett's sounding board.

Read Charlie Munger's advice and compare it to what you read elsewhere about
financial firms knowing that Charlie is right.

In fact, the OP reasons in much the way of Buffett (I read several of his
eariler articles), except that his noodling around with shorts is a departure
from what I take to be Buffett's strategy of buying good management and good
companies at good prices, and waiting as long as it takes to get good prices.

