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Starbucks Company Analysis

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Starbuck Industry Analysis

Threat of substitute products – medium

The premium foods and even fast foods industry, there are substitute products for Starbucks. When the other industries can satisfy the customer need that Tea industry is satisfying then there will have a threat for Starbucks. Other beverage industries such as premium foods industry – Minute maid, Ice Lemon tea, pocari sweat, etc.

Threat of the entry of the new competitors – high

Fortune ranked Starbucks number one in innovation, quality of management, people management and also quality of products or services in the food industry 2007. Starbucks is still the world and Shanghai leader in its industry. Starbucks is constantly innovating and showing strong product differentiation in their industry. However, some competitors such as Mc Café introduced by Mc Donald’s, Mc Café offers premium coffee with reasonable price. Although Starbucks now is the strongest in its industry however must be aware of the threats to potential entrants since the profit is attractiveness.

The intensity of competitive rivalry – medium

Starbucks current Shanghai competitors are Coffee Bean & Tea Leaf, Costa Café, local and brand competitor rabbit (rbt). Because of this industry do not have too much rival in Shanghai; Starbucks comes as the winner of all them. With holding 73% of market share and 1000+ number of shop in china, they lead this industry.

The level of buyer power – low

Starbucks have a fixed price in every shops, I don’t think the customer come to the cashier, order, and bargain for lower price before they pay. So, the buyer power of Starbucks was almost none.

The level of supplier power – medium

Starbucks have their own supplier of coffee and tea, but because of Starbucks order in a bunch and a very popular brand name. This makes Starbucks have a medium power of bargaining towards...

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