Expresso Espresso Essay

In the US, specialty coffee is a $5-billion industry with a 20% growth rate (House, 2013)

Threat of new entrants: Retail industry has a higher barrier to entry. First, it is difficult to work out a good value chain as it involves a complex process. Second, it is difficult for new entrants to gain competitive advantage and earn above-average returns in such a highly competitive market. Besides,

The threat of entry of the supermarket industry in US is low, which base on the analysis of the three major sources that related to the entry barriers. The first barrier is the economies of scale of the existing large supermarkets. When these incumbents achieved larger volume sales, they can have lower unit costs than new entrants, and it will very difficult for those new entrants to compete with them (Johnson, Whittington, &Scholes 2011). For example, Wal-Mart had invested in innovative procurement, automated distribution centre and bar coding to increase its economies of scale, and these investments created a great barriers for new small retailers to enter into the supermarket industry (Porter 2008). The second barrier is the incumbency advantages, which mean the incumbents established their own strengths that cannot be used by competitors (Porter 2008). For example, the top ten supermarkets in US have accumulated extensive experiences on how to run their businesses more efficiently than new entrants (Johnson, Whittington, &Scholes 2011). The subtle differentiation between the products that sold in supermarkets is the third barrier for new entrants. Because most of the product assortment is same or similar between each supermarket,

The industry does not possess major threat from new entrants due to strong barriers to entry and strong competition for retail space. There is also a strong rivalry between competitors as limited space is being contested by major players alongside

- Retailing industry change, Large chains were expanding their market penetration by offering a more diverse array of product.

The threat of new entrants is high in the fast segment. There is a threat of new entrants is because the entry barriers are very low. The business barriers to entry the market could take those forms: first one is the capital costs, the higher the investment required, the less the threat from new entrants. Secondly, regulation and legal constraints are the main concerned points. In most industries, regulations related to health and safety, products handling, and licenses to operate, export, or install new facilities. And other forms of barriers could be brand loyalty which could be an important factor in increasing the costs for customers of switching products. The new entrants need to change the valuable brand suppliers with its efficient economies of scale to have a reasonable supply chain network or corporate with the low cost producers to supply the products in the market. Also it might gain a large market share in the market as well. For instance, Sports Direct Company reported retail sales were £371m while gross profit increased 9.6 percent to £149m, it

| 1. Entry barrier: immense investment on manufacturing equipment and plants.2. Possibility for some companies to adjust already used equipment.3. Food market needs continuous investment on Research of Customer needs & Development of products

Threat of New Entrants: The threat of new entrants is very low in this industry. Most of the companies have over a hundred year’s history and their brands are based on their heritage and tradition. Even a new company with a large amount of initial

Threat of new entrants: The threat of new competitors is medium. The local market (Spain) is not saturated. There is no barrier for distribution entrance, as it needs low initial cost to start up a shop; however, the entry barrier for production is high.

National coffee drinking trends statistics in 2012 shows a tremendous increase in the consumption of coffee in the country. The data show a general increase in all demographics' consumption behaviors. Significant increase is in age groups 18 to 39 with the largest jump in consumption observed in gourmet coffee. The data from the national coffee association (NCA) show current behaviors of coffee consumption such as single cup brewing taking the lead in coffee taking style. Data collection was through sampling procedures using a sample size of 2,955 people who were above 18 years of age. The survey took place online with 1.9 percent plus or minus 19 out of 20-accuracy level.

2. 1. Industry Overview and Analysis: Dunkin ' Donuts is America 's most loved throughout the day, ordinary stop for espresso and prepared merchandise. Dunkin ' Donuts is a business sector pioneer in the hot customary/decaf/enhanced espresso, frosted espresso, doughnut, bagel and biscuit classes. Dunkin ' Donuts has earned the No. 1 positioning for client dedication in the espresso classification by Brand Keys for a long time running. The industry is now forecasted to grow over the next five years, with a billion revenues in the US. This growth would be mainly driven by an improving economy,increase in consumer confidence and expanding menu offerings within the industry. Dunkin’ Donuts dominates the industry with a market share of 36.7% and other competitors like McDonalds, Costa Coffee,

early 2000s, the makers of third wave coffee target the drinkers by providing quality coffee using

There are several substitutes to coffee that are considered reasonable by consumers such as tea, energy drinks, juices, sodas, water, etc. Another alternative to coffee retailers is simply brewing coffee at home at potentially a fraction of the cost. Additionally, switching costs for consumers to alternatives to coffee are fairly low. Hence, overall the threat of substitutes to coffee retailers is high. To combat this, many coffee retailers are diversifying their product portfolio to include many of these substitutes as a part of their product offerings. For example, Starbucks acquired Tazo tea and Teavana to enter into the tea market.

1999 was supposedly the saturation of the coffee market but since today 's big brands have reshaped the market experience tremendous growth. (Telegraph, 2015) These brands have controlled how the nation perceives coffee to taste, setting a standard for everyone else. This year sales are to reach all-time high of £3 billion in the coffee shop market. (Mintel, 2016) The independent coffee sector makes up 30% of the market. (Word Coffee Portal, 2015).

As of April 2006, Starbucks had 11,377 stores in 37 countries. During the 30 weeks that ended April 30, the company