Caribou Coffee operates coffee shops and distributes coffee by partnering with grocery stores and employers and through licensing agreements. It is a leading coffee shop in Minneapolis and is growing in popularity in Atlanta, Washington, D.C., and Chicago. Caribou argues that profits come from two sources-cutting costs and increasing sales.

A Caribou manager points out that competent people increase sales in retail shops; thus, if the firm focuses only on profits and ignores its employees, it will not increase its sales. Thus, Caribou recognizes the importance of its employees for its success. Caribou also realizes that it needs to stay focused, and though it monitors competitors such as Starbucks to get ideas, it worries more about making a quality product and improving relationships with customers.

Caribou must carefully assess new markets before expanding because there are inefficiencies in creating a new market. The assessment includes evaluating the size of the market, the quality of the market, and the demand for coffee, and determining whether other lucrative locations could lead to expansions in close regional markets. For more information on Caribou Coffee, go to http://www .cariboucoffee.com.

1. How does Caribou Coffee turn its commitment to its employees into a competitive advantage?

2. What marketing techniques does Caribou use?

3. What problems does Caribou face when entering new markets?

4. What problems did Caribou confront in its Chicago market?

5. What role does brand awareness play in Caribou's success?