When deciding where to purchase their favorite coffee, consumers rated the taste of the coffee as a key buying factor…
* Bargaining power of customers is very low since Starbucks implements “standardization” as one of the important step of their brand-building strategy. This means customers will pay same amount of money for same products.…
Consumers considering single-cup brew coffee units are looking for convenience, ease of use, and a variety of coffee selections. For GMCR’s Keurig line of brewers, competitive rivalry exists with other single-cup brew coffee manufactures, specifically Tassimo (Kraft), Nespresso (Nestle), Senseo (Sara Lee), Flavia (Mars), and a few other niche players. Nespresso has been a tremendous success for Nestle in Europe, with organic growth of 20% in 2010 on sales on 3.53 billon (Nestle Annual Report, 2010). Pricing for coffee pods is similar on a per unit basis ranging from $0.36 to $0.87 depending on brand preference (Repanich, 2010). The brewers vary in pricing, but range from just around $100 to well over $500. At the moment, GMCR is benefiting from significant brand recognition of the Keurig product line in the United States. Keurig has over 70% of the market share, dwarfing the competitors, so much so that Starbucks dumped Tassimo, which had a mere 2%, in favor of Keurig (Helm, Jan 2011) earlier this year. Starting next year, Keurig brewers will appear in Starbucks stores, further strengthening the brand (Chase, March 2011). Starbucks research showed that more 80% of their current customers did not yet own a single-brewer system (Starbucks, March 2011), hinting at an avenue of growth. It is…
Starbucks has built a reputation of being the best coffee has to offer. From starting out as a small market coffee store to becoming a top of the market coffee distributor, Starbucks has built a reputation that may be hard to take down. Entering into the Italian market could be a very risky move since it is the country that is considered by some to be the coffee originator. Starbucks entering the Italian market is considered to be a reputational risk and one that they may be able to afford but will bring some challenges. This paper will discuss some of those challenges along with determining if there is a strategic advantage to entering the Italian market as well as explaining how it’s competitors marketing strategies influence Starbuck’s entry into the Italian market. This paper will also discuss whether Starbucks should consider entering Italy at all.…
Coffee has an unfailing and growing economic utility. In other words, the level of pleasure received when people drink coffee has remained high over the years. Additionally, there are more buyers in our economy that are extending the types of beverages they drink with coffee, and the extensive assortment of coffee drinks that are offered. This has supported the increase of coffee’s utility in the marketplace.…
The demand for coffee and specialty coffee products have been steadily increasing. One of the leading factors affecting the demand for coffee beans is an increase in specialty coffee shops, such as Starbucks. Starbucks has become one of the most favorite coffee spots with over 21,160 stores in 63 countries and territories, including the United States, China, Canada, Japan and the United Kingdom (Starbucks Corporation 2013 Fiscal Report). Their locations serve hot and cold infusions, ranging from a regular Americano to Frappuccino’s and a whole array of whole-bean coffee, micro ground instant coffee, full-leaf teas among other goodies. It is no surprise that Starbucks has become a significant success, controlling a high percentage of the coffee supply.…
Even though, Starbucks and Dunkin’ Donuts has a very similarities in their menus and the way how they advertise their product by using the same media market to get them out to the public. As a customer, I will prefer Dunkin’ Donuts because those stores are in walking distance from my place of work and they have two DD in my town. There is no Starbucks in near my town. For example, during the summer I go to DD just to get a drink after a hot day and I will stay to use their free Wi-Fi that is available for everyone to use. Plus, they are known for having a high quality…
Koji Tanaka Susan Carder MKT333 Section 1 10/11/2013 Starbucks vs. Dunkin’ Donuts 1. Describe the targeted segment(s) of each Starbucks and Dunkin’ Donuts.…
This study gives a brief review of the U.S. and international coffee shop industry. The coffee industry includes 20,000 stores with combined revenue of $11 billion. Approximately 20 million people work in the coffee industry worldwide. The coffee industry is very concentrated at the top and fragmented at the bottom with the top 50 companies taking up to 70% of the sales. Starbucks lead the way with over 16,680 stores worldwide; and there are some other competitors following them very close.…
Using Sun Tzu’s 13th principle, the Use of Intelligence, we can see that Starbucks not only understands its competition but more importantly, they understand and know their target customer. When McDonalds introduced the low-priced specialty coffee they were targeting the typical Starbucks patron that was also price conscientious. One of McDonalds’ core competencies is delivering excellent customer value. On basic review, this strategy seems well suited to capture a fair share of business from the incumbent Starbucks. When we look deeper, the ideal target customer for Starbucks is not looking for just coffee, but the custom tailor-made experience of having your coffee the exact way you want it and not from a mass-producing machine designed to crank out coffee flavored beverages to keep up with a busy drive-through line. Starbucks understands that what they are selling is an experience that is made in a variety of different ways from decaf…
Most companies did not consider cups of coffee to be a very profitable or expandable market, until Starbucks. Starbucks started selling their gourmet coffee at almost four times the cost of a regular cup of coffee and people flocked into their stores. Starbucks is now considered the number one leader in the gourmet coffee industry. Since Starbucks created this extremely profitable and somewhat simple market, many competitors have taken interest in trying their hands in the gourmet coffee market. Starbucks number one competition is McDonalds new line of gourmet coffee. McDonalds started selling McCafe coffee, which include items such as frappes and lattes with popular flavors such as mocha and caramel. The biggest advantage that McDonalds possesses is the price difference. McDonalds gourmet coffee is cheaper than anything Starbucks offers. Another company that is beginning to come up in the gourmet coffee world is Sonic. Sonic started selling items such as their Premium Roast coffee and their Java Chiller with your choice of caramel, mocha, or hazelnut flavors. Both of these competitors offer a cheaper substitute for Starbucks gourmet coffee. Another problem Starbucks is facing is the rise in dairy and coffee products and the loss of flavor due to their cost saving methods. The resources required to sell gourmet coffee is rising which will make it difficult to…
I set out to find a place to begin my observations, not knowing what to fully expect, what I may find. So I decided to look around at what is close to my home that isn’t a place I frequent or have even visited at all. Then it came to me, the Starbucks that is only about a mile away is a perfect place for me to observe subjects that I would consider different from myself, seeing as how I consider such obscene prices for coffee ridiculous. Starbucks is a very popular chain of coffee vendors that describe their product as more about quality than what Americans are used to in typical coffee joints.…
* Power of buyers: Medium. Starbucks’ customer’s experience distinguished itself from other fast-food liked coffee providers. However, if the price outranges consumer’s expectation, they could still walk away to Starbucks rivals.…
The coffee shop industry possesses a very high intensified competition on all players: both Specialty Brand and One-Store Coffee Shops. The main reasons that contribute to…
The Porters’ Five analysis reveals that Dunkin Donuts is in direct competition with Starbucks. Some 400 billion cups of coffee are consumed every year, and Dunkin Donuts and Starbucks are competing for the Coffeehouse storefront. While Starbucks drives tastes for upscale coffee, Dunkin Donuts is, “betting dollars to donuts,” that consumers nationwide will embrace its reputation for value and simplicity. With Starbucks and Dunkin Donuts being so aggressive there are not many competitors who have enough resources to compete in the coffeehouse marketplace. When places like McDonalds started offering Coffee along with their breakfast menus, Dunkin Donuts was faced with the challenge of the morning meal market, they made an update and added to their donuts, with bagels and croissant-based breakfast sandwiches, and an oven toasted line including flatbread sandwiches and pizzas. They have also begun shifting their donut production from individual stores into centralized facilities that have the ability to serve up to 100 stores, giving them the ability to influence price and production. Starbucks and Dunkin Donuts both have their own customer base, each having unique items. Dunkin Donuts focuses on offering simple and straightforward morning snacks, which has given them the competitive advantage of distinction as the “anti-Starbucks- earnest and without pretense,”…