Porter’s Five Forces Analysis on Starbucks

Assignment about Starbuck
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Assignment about Starbuck
Question 1
Coffee is always a beverage that most people around the planet consume. Understanding the coffee shop industry requires performing Porter's five forces analysis. Competitive rivalry is the first force whereby Starbucks experiences competition from different sides and serves the target audience, primarily coffee consumers. These include Peet's coffee, Costa coffee, Lazarra, etc. There is the bargaining power of buyers, which is relatively higher because there are increasingly many coffee beverage providers. Therefore, consumers have many options to choose from. Thirdly, there is the bargaining power of suppliers, which is low due to the many suppliers from which coffee shops select. Fourth is the threat to new entrants. It is undoubtedly high since fewer hurdles are preventing new entrants. Fifthly, there is the threat of substitutes. This threat against the coffee shop industry is high because multiple substitutes are available, tea being the largest (Sholihah et al., 2016). Overall, the industry attractiveness is appealing as the industry is doing well and has grabbed a huge market share.
Question 2
           The industry is reshaping considerably due to various factors constituting the industry's dynamics. Most importantly, technology and its advancement have played a significant role in the industry's dynamics over the years. This suggests that the future of the coffee industry, alongside Starbucks' future, will be shaped by technology because of new trends like online deliveries.
Question 3
           Starbucks has distinctive core competence, which is its capacity to promote product differentiation by providing a premium mix of snacks and beverages. The firm's brand revolves around offering high-quality coffee and associated commodities, allowing every customer to enjoy the experience. The value-based approach that human resource management demonstrate is another core competence. The approach allows robust connections with suppliers and other significant external stakeholders involved. Again, the company has a sustainable competitive advantage. Notably, the product differentiation strategy allows Starbucks to remain competitive and allows the brand to outshine others. The differentiation concept incorporates final high-quality and exceptional ...