Costa Coffee vs Starbucks

Starbucks and Costa Coffee are two major competing coffee houses. Both coffee houses can select between two advertising strategies:

1. Advertise
2. Not advertise

Consider the following hypothetical scenario, and use it to populate the matrix below:

• If Costa Coffee and Starbucks both advertise then they will make a profit of $21 and $15 million respectively.
• If Costa Coffee advertises their coffee products but Starbucks does not advertise then Costa Coffee will make a profit of $27 million, whereas Starbucks will make a profit of $13 million.
• If Costa Coffee does not advertise but Starbucks advertises, then Costa Coffee will make profit of $11 million while Starbucks will make $23 million as its profits.
• If Costa Coffee and Starbucks both don't advertise then they will make a profit of $25 and $20 million respectively.

Enter numbers in terms of $millions i.e. if your answer is $20 million, simply enter 20 without the $ or the word million. Once you have completed the matrix, click ‘Evaluate’ to check your answer and continue to the next step.