In 2019, an article on forbes.com discussed one of the new Reserve Roastery coffeehouses that Starbucks has introduced: A “23,000-squarefoot three-story emporium, where specialty coffee, pizza and pastries to be served in-house had all been roasted or baked on site and a cocktail bar on the top floor served coffee-infused alcohol.” The article described the new coffeehouses as Starbucks’s attempt to meet competition from Blue Bottle Coffee and other upscale coffeehouses. The new Reserve Roastery coffeehouses are larger and more costly to operate than are conventional Starbucks coffeehouses. We’ve seen that Blue Bottle Coffee and other third wave coffee houses also have higher costs than conventional second wave coffeehouses. Are the strategies used by Starbucks, Blue Bottle, and other chains likely to give them the ability to earn an economic profit in the long run? If not, why do they bother pursuing these strategies?