Local cafes can offer much lower price and more suited menu for its customer. Big coffeehouse chains specialize so they wouldn’t need to compete head-to-head with Starbucks. In both situations, Starbucks experiences intense competition and loses market share. 4. Saturated markets in the developed economies.
However, technology has a downside as a number of companies from the Asia Pacific region are offering high-quality home-making coffee machines at cheaper prices, and thus, might in the long run substitute the store coffee purchases. Environmental Factors Currently, the world faces an increasing threat of global warming. Therefore, the abnormal weather patterns affect the coffee producing regions. Consequently, Starbucks faces a threat to its core business thus affects its brand image and uniqueness. Legal Factors The legal environment is constantly changing due to adoption and revision of laws, regulations, and policies.
The weakness of Starbucks company is customer markets. Customer markets can be defined as a term for the section of available customers who currently give money or support to a business, especially for a product or service. This group of customers can grow and reduce their product or service due to changes in the business environment. Customer markets is also a weakness for Starbucks company because the products are very expensive. Starbucks company should lower their product’s price in order to gain more customers and profits.
This reinforces the intent on competitiveness as they have a control over their supply chain and create value throughout every step of the process. To decrease the complexity of the process, Starbucks has a set of suppliers that have specific locations to deliver their coffee beans to, allowing them to control the production. This is due to their highly-centralised processes that enables Starbucks to control their global networks. Another component of their value proposition is the service. The process of their customer service follows a pattern that is common to every Starbucks Coffee Shop in the world.
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
It is also any industry in the fast food category. One of the most well-known competitors is Starbucks. Both companies focus on the same product, yet they run in extremely different ways and each way works for them. Each company makes consumers feel welcome. Starbucks achieves this with its tension-relieving environment and Tim Hortons achieves this with its fast service and familiar feel.
Unless, for some reason, consumer preferences/tastes were to change drastically, it seems that Starbucks has successfully created a winning strategy that is both profitable and sustainable –based on this analysis. Starbucks can continue to fight against the threat of substitutes by establishing a welcoming atmosphere at each location, selling products at grocery stores/supermarkets to appease home brewers, and providing a drive thru (when possible) at locations to accommodate the “in-a-hurry/on-the-go”
This may possibly also give explanation of why the cost of Starbucks coffee is very expensive; their production costs are high and that costs are imposed to the clients to raise their profits and reduce operating costs. Starbucks pricing is seen to be above the average. The environment between the competitors differs from a fast-food chain where the aim is to obtain quick service, whereas the coffee shops atmosphere is growing slowly and stress-free. New market rivals can raise the competition for market share, reducing prices, and the effectiveness of an industry. Some recent competitors can respond against newcomers to prevent them from intervening in the industry in the beginning.
As the world 's greatest café organization, Starbucks keeps on coming out on top in reasonable business and development. Such achievement is credited to the association 's capacity to address the outer PEST factors. As, instructed by Dr. Russell Currie I will be analysing PEST, the acronym remains for 4 factors which influence the business that are political,
People are more conscious about their health in today’s world and coffee can be seen as a bad beverage for health so people are looking for healthier drinks. People spend more and more money on coffee and they do not go to coffee shops just to drink a coffee –more to relax and enjoy them. TECHNOLOGICAL: Cheaper and better coffee machines are available for home usage. Impact of internet, reduction in communications cost. Social media branding can help to expand our business.