Starbucks Analysis

647 words - 3 pages

It is difficult for many to trade the taste and quality of Starbucks for cheaper alternatives such as the break room coffee. Yes, maybe the break room coffee is more convenient and free, but is it really that inconvenient to go grab a Starbucks? Also, is it really that expensive considering how wonderful the taste is? This is a common thought process of a frequent Starbucks coffee drinker. It is these thoughts that make power of rivalry moderate.
The power of the buyer is moderate to high. If a consumer is looking for a morning coffee or an afternoon pick-me-up they have many options to satisfy this demand. There is nothing, besides quality and variety, that forces frequent coffee drinkers to choose Starbucks. Starbucks is generally more expensive than the alternative, which gives the buyer the power to decide whether to spend the extra money and shop at Starbucks.
Although buyer power is high, Starbucks holds the largest share of coffee sales worldwide. Starbucks also holds many coffee related partnerships and subsidiaries making it the largest purchaser of coffee beans from coffee bean suppliers. Due to Starbucks’ position in the coffee industry, the success and existence of many coffee bean farmers, suppliers, and distributors relies on Starbucks being a customer. This gives the suppliers very little power.
The power of new entrant is low to moderate. Starbucks has built a strong image worldwide amongst its buyers and suppliers. It would be extremely difficult for a new entrant to compete with Starbucks. It seems like Starbucks coffee products can be found everywhere and/or used anywhere. Their products can be found at Starbucks coffee shops, licensed coffee shops, and subsidiary owned shops and retailers, and at many grocery stores. Starbucks has also developed many products that can be used in many different situations, such as coffee beans that can be ground and used at home, instant coffee that can be used at work, k-cups that can be used in a kurig coffee machine, and ready to drink...

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