Continually increase profits starbucks must carefully

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continually increase profits Starbucks must carefully choose their new locations, too many storesin an area will decrease the profits of each store. Another emerging threat has been a rise in competition from local coffee houses. Many consumers feel as though they can get a better cup of coffee while supporting a local business when they shop at local stores. (Starbucks Corporation Fiscal 2018 Form 10-K)Internal Factor Evaluation Matrix
Case Study 2 - Starbucks10External Factor Evaluation Matrix
Case Study 2 - Starbucks11SWOT Bivariate Strategy MatrixBCG Matrix
Case Study 2 - Starbucks12The BCG Matrix revealed some astounding numbers in Starbucks’ favor. Their revenues surpassed all rivals in every meaningful segment of competition. Starbucks beverage revenue was $14.7 billion for 2018, the closest competitor of McDonalds was only $1.4 billion in McCafe sales. The four quadrants are stars, question marks, cash cows and dogs. Starbucks is by far the market leader in all segments, however, its real domination comes in the beverage sales department. Competitive ForcesCompetitive Forces Analysis. Starbucks has high level of competitions in each of their business segments. The strong force of competition is identified through the Five Forces analysis.The most significant forces for Starbucks consideration is competitive rivalry, the bargaining power of customers and the threat of substitutes. The Five Forces which most directly affect Starbucks are:1. Competitive rivalry or competition – Strong Force2. Bargaining power of buyers or customers – Strong Force
Case Study 2 - Starbucks133. Bargaining power of suppliers – Weak Force4. Threat of substitutes or substitution – Strong Force5. Threat of new entrants or new entry – Moderate ForceIn order to remain competitive in their business segment, Starbucks must implement strategies tomake their business even stronger. Starbucks must continue to build on its strengths and shore up their weaknesses.Competitive rivalry or competition. Starbucks faces strong competition from a variety of brands in the coffee segment. From major brands such as Dunkin Donuts or McDonald’s to the local coffee shop, there is a wide variety of competition in this market. The external factors that contribute to the strong force of competition are the large number of firms and the low switching cost. There are a wide variety of competitors and there is no cost to the customer to switch which coffee shop they frequent. This ease of change makes competition a strong competitive force. Bargaining Power of Customers/Buyers. This force is based on the influence of individual customers or groups of customers in the business environment. In the case of Starbucks the following external factors contribute to the bargaining power of customers, low switching costs and high substitute availability. The bargaining power of customers is one of the strongest competitive forces that Starbucks faces. If Starbucks were to raise prices significantly

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