Results of the Applications of the Five Forces Model in Starbucks

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Michael Porter five forces model is used to analyze an industrial environment and then to develop appropriate strategy for success for the product of industry ( Porter, ME, 1998) When the model was applied to Starbucks to analyze the competitive environment, the following result was achieved. Industrial Rivalry : The industrial rivalry in coffee industry has increased to a large extent since 1987 and today Starbucks is facing tough competition from different small scale coffee shops and fast food companies. Small Scale Industrial Rivalry : Caribou Coffee is a US based coffee company found in 1992. It is a competitor of Starbucks since they offer related services as Starbucks , free Wi-Fi in stores, rooms on rent for meeting, quick services etc. To evaluate it with Starbucks, which stands the first coffee house and has over 4500 outlets in 47 countries, Caribou has only 525 coffee houses and selling sale about 8.6 times for Starbucks in 2009. The difference is store acceptance and sells revenue. Revenue of Starbucks was USD$252.6 million which is higher than caribou Company with USD$224.8 million. Yet another competitor of Starbucks is a Canadian based coffee company named A.L. Van Houtte, which has 100 corporate outlets and franchises. It is serving about 3 million cups everyday and in North America with 71000 workplaces all over US (A.L Van Houtte , 2005). Large Sales: Dunkin Donuts is a large scale competitor of Starbucks with more than 5500 franchises in US and 80 stores

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