Jai Shah 5 Forces

Loxcel starbucks store map faq second to this caribou

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Unformatted text preview: he caffeine content of coffee is usually higher than tea. An 8- ounce cup of brewed coffee has about 85 milligrams of caffeine compared to 40 milligrams in a cup of hot tea, meaning that consumers are more likely to drink coffee for stimulation. (The Christian Broadcasting Network) Moreover, although tea can be considered a substitute for coffee, the coffee shops that dominate the market today also serve various forms of tea to benefit from extra revenue. Several firms have even acquired shops that are based primarily around tea instead of coffee. For example, at the end of 2012 Starbucks bough Teavana for $620 million dollars, eliminating it as competition. (Starbucks Buying Teavana, Eyes Repeat of Coffee Success.) Because coffee has such a distinctive taste, the only other true substitute for specialty coffee could be considered to be basic coffee. However, basic coffee is of a considerable lower quality than specialty coffee and as a result poses little threat as a substitute, once again targeting a different demographic that that of specialty coffee. Therefore, generally, this leaves the threat of substitute products to be moderate, because although there are other caffeinated products and basic coffee available, they are targeted to a different demographic. 4. Bargaining Power of Buyers (Low) In the specialty coffee industry, consumers usually buy individual units as opposed to buyers that buy in large volumes. This reduces the relative bargaining power of buyers. Further...
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This document was uploaded on 03/02/2014 for the course MANAGEMENT MOA at NYU.

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