Starbucks, Case Study

In the fast-food segment, McDonald's and Burger King with a strong world wide presence. In the chill-out segment, Starbucks represents an important competitor; it has more that ten times more locations and around eight times more revenue.

The industry’s saturation is moderately high with a monopolistic competition structure. For new entrants, the initial investment is not significant as they can lease stores, equipment etc. at a moderate level of investment. At a localized level, small coffee shops can compete with the likes of Starbucks and Dunkin Brands because there are no switching costs for the consumers. Even though it’s a competitive industry, the possibility of new entrants to be successful in the industry is moderate. But this relatively easy entry into the market is usually countered by large incumbent brands identities like Starbucks who have achieved economies of scale by lowering cost, improved efficiency with a huge market share. There is a moderately high barrier for the new entrants as they differentiate themselves from Starbuck’s product quality, its prime real estate locations, and its store ecosystem ‘experience’. The incumbent firms like Starbucks have a larger scale and scope, yielding them a learning curve advantage and favourable access to raw material with the relationship they build with their suppliers. The expected retaliation from well-established companies for brand equity, resources, prime real estate locations and price competition are moderately high, which creates a moderate barrier to

Starbucks is one if not the largest growing coffee shops in America. It has started a war on coffee. Starbucks has taken its franchise and expanded all over the world and really placing a Starbucks in just about every corner. It went back to its hometown and opened up a café. It happened right after Dunkin Donuts which was an England franchise and began advancing west and it now in three locations in Southern California. Dunkin Donuts opened up its store on Santa Monica boulevard in Los Angeles there was a mass of people lined up outside. McDonald’s, Dunkin Donuts and Starbucks have been fighting for the position for serval years and the battle is escalating fast.

The context change in form that Starbucks found itself competing with smaller chains that resembled its former pre-expansion model with competitors focusing in creating symbolic-expressive value and fast food restaurants that had started to offer specialty coffee with more aggressive advertisement at a lower cost. The competitive context changed for Starbucks because it’s focus in mass distribution channels and its retail footprint strategy stated its product within a standard performance product value; this affected the value perception of the product.

Starbucks faces competition from variety of small-scale specialty coffee chains, such as Caribou Coffee, Peet’s Coffee and Tea, Dunkin Donuts, and thousands of independent specialty coffee shops. Each of them applies different strategies to differentiate itself from Starbucks; some of them deliver highly personalized service.

It’s a known fact that Starbucks is one of the leading brand in the market.When we analyse the market we find that Mcdonald 's and Dunkin are the competitors in the same product segment. So comparing Starbucks with these competitors will throw light on its grey areas, process and competitive edge in the market.

The “Coffee Wars – The Big Three: Starbucks, McDonald’s and Dunkin’ Donuts” article focuses on the company analysis of the Starbucks brand and how its main competitors, McDonald’s and Dunkin Donuts, has affected their brand and driven competition higher. Even though there are many companies trying to enter the specialty coffee market, these three companies own the majority of the market share. With Starbucks’ top quality and above average prices they hold a different market than the fast coffee/food market of Dunkin’ Donuts and Starbucks; yet the competitive moves Dunkin’ Donuts has made over the years in order to compete with Starbucks and surpass McDonald’s has driven competition up between all three companies. The competition has stiffened ever more in the past ten years due to the changing economy. This led to “the big three” to come up with different techniques to gain competitive advantage over the other. Although the competition between these companies is to gain most of the market share, consumers are still loyal to a certain brand; this makes it difficult to gain each other’s clientele. McDonald’s continues to appeal to customers who want value and speed, Dunkin’ Donuts focuses on the middle-class, while Starbucks a customer who desires a higher quality product along with being recognized for using the brand.

Starbucks Corporation is the sector called Specialty eateries. It largest competitors are, PANERA BREAD, DIEDRICH COFFEE, and FLANIGAN'S ENTERPRSE INC. With Starbucks having more than 10 times the sales of its nearest competitor.

Starbucks—This $21 billion Seattle-based company sells has over 9,000 outlets world-wide. Selling everything from coffee to CDs, Starbucks is in the business of the “coffee experience,” and they’re always looking to partner with those companies that will best complement their customers’ desires for a high quality coffee drinking

Moreover, most of the people know the brand Starbucks as the leader of the coffee industry. It is enormously successful and it comes out with no surprise that this will be used as benchmarking against the study of Dunkin’ Donuts.

Starbucks’ top competitors include McDonald’s (MCD), Dunkin’ Donuts (DNKN), and Caribou Coffee (formerly CBOU). As competition and the number of rivals increase profitability decreases. Starbucks has continued to diversify its products as a result of its competitors targeting the larger customer market. According to most recent quarter closes, Starbucks (SBUX) has maintained a fair percent of the market and shows a quarterly revenue growth year over year by 0.18. These metrics compared to other publicly traded competitors are quite good and just at industry averages. See table 1 below.

cup of coffee would head to their local coffee houses or their corner cafes in

There has been a growing competition in the coffee segment for Starbucks. Both Dunkin’ Donuts and McDonald are strong competitors for Starbucks (see graphic below).

I view Starbucks from a Heterodox perspective, they are innovative and are constantly creating the newest technology in the quick serve market in order to pull ahead of their competition. For example; Starbucks created a mobile ordering app in order to allow consumers the ability to order, purchase and select a time for their product to be ready for them to pick it up in store. This app is in conjunction with their loyalty program where you earn stars for every dollar you spend, leading you to rewards based on the amount of stars you collect. Although Starbucks started off as a partnership between Gordon Bowkey, Jerry Balwin and Zev Siegl, it quickly

Starbucks main competitors are quick-service restaurant and specialty coffee shops. They are serving the same or similar core product as what Starbucks providing to their customer.