5 Forces Analysis Of Specialty Coffee Industry

751 words - 3 pages

Customers a) This industry has a great # of customers, therefore they have less power.b) The customer makes relatively small purchases, as coffee is a generally low involvement product.c) Specialty coffee purchases are relatively small in regard to other purchases. Over the course of a consumers life however, coffee purchases can equivocate to a substantial amount.d) The specialty coffee industry offers much product differentiation. The specialty coffee industry involves great importance when it comes to which brand to purchase.e) Specialty coffee's target consumer is relatively HIGH profit customer. This includes many with college degrees.f) Knowledge about specialty coffee has become widely available due in part to the emergence of the Internet. In general, the Internet has raised consumer awareness at all levels.g) Customers must in some way deal with the specialty coffee companies in order to obtain their desired product. It would be virtually impossible for most consumers to grow and roast their own specialty coffee. (Or any coffee for that matter) h) Customers can easily switch from one seller to another within the specialty coffee industry. As well as leave the specialty coffee genre entirely.Suppliers a) There are a limited number of suppliers available to the industry. It is estimated the 1/3 of the coffee farms in the world are less than 3 acres.b) Suppliers offer companies in this industry the only available products. Because of the climate needed to grow coffee, and necessary conditions there are not many substitutes available.c) The suppliers are directly dependant on the buyers. Without buyers, the sellers would be producing coffee for no one.d) The buyers must have the product to survive. In specialty coffee, the seller must have the product in order for the buyer to survive.e) Most suppliers, offer only coffee. However, specialty coffee differs in the sense that coffee beans can still be made by suppliers without making specialty coffee.f) There is no known cost at this time between switching between suppliers.g) Suppliers and buyers are interdependent in the specialty coffee industry, Existing Industry Competitors a) The specialty coffee industry is growing at a rapid rate. Everyone within the industry should experience some kind of growth.b) There is a general low fixed cost associated with the coffee industry. The...

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