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Starbuck Case

This strategic report will explain the environment factors of Starbucks Corporation using Porter’s Industry Analysis. A TOWS Matrix will be presented before discussing the possible strategic options available to the company. With the information provided from both analyses will determined the profit maximizing potential and the recommended strategy that best suites the company.
Porter’s Industry Analysis
Coffee Stores



Rivalry Among Existing Firms
In the specialty eateries industry, Starbucks current U.S and international competitors are Tim Hortons, Einstein/Noah Bagel Corporation, and Dunkin’ Donuts (hoovers.com). Tim Hortons operates 2,733 coffee shops in the U.S. and Canada (timhortons.com). Einstein/Noah Bagel Corporation operates 460 bagel cafes in the U.S (hoovers.com). Dunkin’ Donuts operates 6,000 locations in the U.S. and 30 countries (dunkindonuts.com). Starbucks has 6,566 locations in the U.S. and 40 countries (starbucks.com). It is obviously that Starbucks has major competitors, and the competition has about equal volume of operations combined. The volume of locations are so closed that competitors are selling similar products, including specialty coffees and high quality foods. Competitors are matching each other move with similar countermove. In this saturated market, competition is high.
Threat of Potential Entrants
It will be extremely difficult for new comers to enter the market due to barriers entry. Starbucks and their existing competitors already saturated the market with thousands of locations domestically and internationally that the capital requirement that is needed to build stores to compete would tremendously high. Starbucks is constantly innovating and showing strong product differentiation in their industry. They sold CDs of it famous in house music, launched their brand of bottled Frappuccino, and introduced the Starbuck debit card. Product differentiation is the opportunity...