High to Moderate Competitive Force -Several Firms in Industry (McDonald’s, Dunkin’ Donuts, Local Coffee Shops, Etc.) -Comparable Products can be Found at Many Different Locations (Supermarkets, Grocery Stores, Etc.) -Low Switching Costs -Somewhat Saturated Market Share -Product Differentiation (Brand) Threat of New Entrants Moderate Competitive Force -Moderate Barriers to Entry (Not Substantial) -Stocking the Volume of Product Needed (Coffee Beans, Tea, Etc.) -Brewing Equipment -Branding/Image of Large, Mature Firms that Already Exist in Market like McDonald’s -Relative Cost for Marketing/Advertising to Become Competitive Threat of Substitutes High Competitive Force -Costs Must be Kept Low to be Competitive -Brewing Coffee at Home -Attending Bar/Pub (Mingle, Hangout, Socialize, Etc.) -Attending Other Pleasant “Third Places” (Besides Home and Work) -Visiting a Friend’s House to Spend Quality Time/Relax -Cheaper Alternatives (Local Coffee Shops) Bargaining Power of Suppliers Low to Moderate Competitive Force -Suppliers Pose Low Threat of Competing Against Starbucks (Forward Integration, Lowers Supplier Power) -Starbucks Forms a Highly Important Part of Suppliers Business (Due to its size and scope), Which Makes Supplier Power
Create the Value: Market Segmentation Analysis and a Value Proposition for New Retail Brand Dunkin' Donuts Kidd Milky Beverages Brief Description of the New DD Retail Brand - Dunkin' Donuts KiDD Milky Beverages Dunkin Donuts has pursued a policy since 2000's to be more than ' just a donut store, the company started putting more emphasis on growing its coffee business (Champagne, Iezzi, 2014). Specially since 2006, DD's proved its brewed coffee, espresso, cappuccino and latte options to the 'fancy' coffee drinkers and today, more than 3 million customers per day visit 11,300 Dunkin Donuts restaurants in nationwide and 36 other countries (Dunkin' Donuts Press Kits, 2015). The brand's slogan "America runs on Dunkin" is now evolving to "Kids
Global brand recognition and equity: Starbucks is the most recognized brand in the coffeehouse segment and ranks 64th of the Interbrand / Business Week list of the top 100 global brands. It effectively leverages its rich brand equity by merchandising its products and licensing its brand. Its immense brand value also allowed for successful tie-ups with leading retail chains for its branded foods and beverages. The brand is so widely-recognizable that the company dropped the words "Starbucks Coffee" from the logo without fear of losing its
You can get a donut and drink within a minute, but the sandwich and beagle takes about two-three minutes. Tim Hortons has given you drinks, beagles, sandwiches, donuts, and muffins since, 1964. They value audio commercials and billboards to draw people to want something sweet or filling. One commercial/billboard, for example, show simple but effective advertising. The commercial is so simple the image is coffee, breakfast sandwich and a muffin and two words: Always fresh.
Income expenditure of population would be different depending on the location that company operates in. Comsumers in British would think 2.5£ for a cup of coffee is reasonable. However, in Thailand 150 Baht is expensive. This is different consumption due to cross national comparison and local currency. Exchange rates Caffe Nero used to import coffee bean name “Coburg” from outside country, then roasting to taste the product in the UK (Investegate.co.uk, 2009) Presently, company changes to growth theirs own coffee to avoid exchange rates.
Rising prices of coffee beans and dairy products. Health conscious consumers Cases over illegal use of the Starbucks trademark Recommended Solutions / Actions Starbucks’ product pricing is expensive compared to their competitors. They should reduce their product prices by using cheaper beans to produce new type of coffees. Starbucks can offer promotions and special discounts to their customers as well. Such as buy one free one, or buy one and get 50% off for the second cup.
It will generate a significant social cost and thus is seen as illegal. Therefore, government regulator needs to examine closely and review it competition law to prevent any of such anti-competitive practices from occurring. Ethical Principles The actions of Starbucks are deemed to be unethical or ethical from the utilitarian benefits and self-interest theories. Utilitarian Benefits According to the utilitarian benefits theory, Starbucks’ actions are unethical as the actions of Starbucks result in greater harm than good for the society. Small coffee retailers are providing more to the people of the towns that they are located than Starbucks does as those small local coffee retailers offer reasonable priced for their coffee.
Nonetheless from the analysis, there is a void in filling the finest coffee in the world section of the firm’s vision statement. Whilst it is undisputed that the Starbucks Company does serve some of the finest coffees in the world what is disputed is are they serving the finest of all coffees, thus it remains for the company to strive harder in order to better their products. The main goal needed to achieve in order to address this component of the company vision statement is to ensure that the Starbucks Coffee Company is always leading the competition from the standpoint of quality of coffee. To be more up to date, the company could alter its vision statement in order to mirror the company’s current diversification and the growing range of products which the offer, for example Starbucks merchandise available from selected grocery stores and
Also, you need to know that it is the same type of plant used to produce coffee and espresso. Coffee is produced from the same beans as espresso, and they are processed in the same way. Most times, your favorite espressos and coffees are mixed with many types of coffee. But during processing, both drinks are prepared from similar
The consumer preferences is a guide for Starbucks to make changes and adjustments to their products and services. Cultural trend is a double-edged sword. It impacts the company in both positive and negative ways. For example, if the cultural trend shifts to a healthier, less caffeine consuming diet, it will affects Starbucks’ sales. If the cultural trend changes to a coffee-consuming trend, this will highly boosts Starbucks’ sales.