Porter's Five Forces Starbucks

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Porter’s Five Forces Analysis of the Industry Competition is a fundamental factor in whichever industry. Hill and Jones (2007) note, “the power wielded by suppliers, the influence of the customers, and the threat posed by new and existing competitors determine the profitability levels in a company”. Besides, the forces support the decisions made by firms in order to improve their competitive position. In this regard, it is essential to review these forces either individually or as a combination to arrive at an informed decision on the industry choice. Further, it is fundamental to note that a force is either classified as strong or weak and, as a result, is a threat or opportunity respectively. The success, or otherwise, of Starbucks is based on its capacity to manage the consequences that are identified from the industry analysis. Porter’s five forces can be…show more content…
First, Starbucks has effectively applied the product differentiation strategy. To achieve it, the company has specialized in different product mixes, aligned its business locations to a specific ambiance that suits the context, and varied the customer experience, thus resulting in a higher customer service satisfaction. Further, Coskun, Basligil, and Baracli (2008) note that Starbucks prides in having their customers enjoy a premium service. Therefore, the company’s signature strategy has worked well thus far, as competitors find it difficult to imitate. Second, the enterprise has coordinated its acquisition and portfolio strategy, thus consolidating the market. As discussed in the background chapter, Starbucks has a portfolio network of eight brands under its stable. Third, Starbucks’ international expansion strategy has worked well, with a presence in 70 countries (Starbucks, 2017). These factors, coupled with its financial capability, offer Starbucks an edge over its
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