Assignment Two

Starbucks and We Work

Starbucks and We Work are two of the fastest-growing companies in the world. And they appear to operate in entirely different businesses Starbucks operates Coffee Shops while We Work manages shared work spaces.

But a wise guy friend of mine suggest that is incorrect that, in fact, they are the same businesses with different revenue and profit models. Specifically, she says that they both offer coffee and a place to work while you drink the coffee, it is just that Starbucks sells you the coffee and gives you the workspace (desk, wifi, etc.), while We Work sells you the workspace and gives you the coffee. The only practical difference is that the thing you pay for is guaranteed while the throw-in is on an if available basis. You might not get a seat at Starbucks, but they might be out of your favorite drink at We Work.

I would like you to consider this idea and answer two questions about it:

1) Starbucks appears to have the better business model, but why is this the case? What are the strategic decisions that were made that put Starbucks on the path to success and We Work on the path to nobody is quite sure yet?

2) Can you think of another pair of companies which have this sort of relationship where one company sells something and gives the other away, while the other sells the second thing and gives the first away?