FINAL INDIVIDUAL PROJECT CASE STUDY OF A COFFEE WAR: - STARBUCKS VS. CHARBUCKS1 WORTH 100 POINTS Case Introduction Two years after opening their family-owned coffee bean roastery, Jim and Annie Clark had become accustomed to long workweeks and bootstrap financing. By 1997, their Black Bear Micro Roastery (\"Black Bear\") was finally growing and the Clarks were hopeful that their new specialty blend, Charbucks, would give their uniquely dark roasted coffee bean a catchy name to remember. Soon after launching their new blend, Annie Clark received a phone call from an insistent in-house lawyer at coffee giant Starbucks that threatened the very existence of their company. Starbucks claimed that the Charbucks name and label infringed on their trademark and demanded that they cease the use of the name Charbucks and any existing products with that name be removed from supermarket shelves. However, the Clarks insisted that they had been careful to design the label with Black Bear Micro Roastery logos and that the name's connection is to the dark roasting process and not to anything related to the name Starbucks. Despite their beliefs that no infringement had taken place, the Clarks entered into settlement negotiations to avoid the legal costs associated with defending a trademark lawsuit. After settlement negotiations failed, Starbucks sued Black Bear Micro Roastery and the stage was set for a coffee war that pitted a multinational powerhouse against a Main Street merchant. The Black Bear Micro Roastery Jim and Annie Clark were native New Englanders who shared a passion for coffee and an entrepreneurial spirit. After three years of research, they launched Black Bear Micro Roastery in 1995, with a mission of creating a unique methodology for roasting gourmet coffee beans through use of advanced technology and \"traditional Yankee work ethic.\" The company was situated in the Lakes Region of New Hampshire and targeted connoisseur coffee drinkers, primarily in the New England area, who appreciated the micro-roastery approach of producing small, high-quality batches of coffee beans. The beans sold, via mail order, from the Black Bear Web site, and through New England specialty stores and supermarkets. Eventually, Black Bear also sold its products through their own retail outlet and cafe in Portsmouth, New Hampshire. True to their belief in the micro-roastery concept and their entrepreneurial courage, the Clarks invested their life savings. In order to start the business, the couple sold many of their assets and refinanced the mortgage on their home for extra cash. They enlisted 1 Final Individual Project - Starbucks Versus Charbucks Coffee Case 1 their teen-aged daughters as their labor force and committed to seven day work weeks. The family business was the centerpiece of their family's livelihood. As with many start-ups, business for Black Bear was slow and rocky at first. The price of green coffee beans had fluctuated unexpectedly and the 1997 Teamsters strike at United Parcel Service had eaten into profit margins. Undeterred, Jim and Annie Clark kept the company going until it began to grow ever so slowly. In order to develop a niche in the gourmet coffee market, Black Bear began to develop unique blends with catchy names that were easy to remember. This included blends such as \"Country French\