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Next equally strong are the threat of substitute

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Unformatted text preview: 415 company owned stores and 125 franchises globally. Caribou Coffee has tried to compete with Starbucks by implementing a more American feel to the stores, modeling the shops after ‘rustic Alaskan lodges. Often they will use knotty pine cabinetry, numerous fireplaces and soft seating.’ Starbucks has created a more ‘upscale European atmosphere. They offer a display of readings such as magazines and newspapers, as well as the guarantee of speedy service and free refills. In addition, they offer free WiFi, drive through accessibility, and meeting rooms for rent.’ They also sell mugs and ornaments with Starbucks brand imaging to increase their recognition. (Starbucks a Strategic Analysis) Peet’s Coffee and Tea is also a competitor in the market. ‘Peet's strategy is to differentiate themselves from Starbucks by creating a super premium brand by offering the freshest coffee in the market. They ensure the freshness of their coffee by delivering "roasted to order" coffee, which involves roasting small batches of coffee and shipping them to the retail shops within 24 hours of roasting.’ (Despite Growth, Starbucks Can't Dislodge Local Rivals, 2007) On top of this, companies in the fast food industry have recently entered the specialty coffee segment to increase the rivalry. Because they are so large, they can also benefit from sharing distribution channels and economies of scale, posing a larger rivalry to Starbucks. One of the main competitors is Dunkin Donuts, which operates over 7000 franchises around the United States and over 1500 more in the rest of the world. Since 2007, the company has put...
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