Swot Analysis : Starbucks Operates

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Analysis of Industry
Strategic Groups In a world where consumers value convenience, price, service and quality, Starbucks has become a major identifiable brand and competitor worldwide. Starbucks operates under the retail coffee and snack shop industry and relies heavily on consumer confidence, spending, preferences and overall economic climate, making the industry highly volatile. The hiring and use of employees to perform the daily operational tasks and duties to provide service and various industry products become an important element in this industry. Because the skill set of the individuals hired in this industry are relatively low, the cost in wages are minimal. The industry reportedly has generated over $30.2 billion in revenue,
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In 2014, Starbucks was listed as having 37.7% of the total market shares, while Dunkin ' Brands Inc. was listed as receiving 25.5%. Other competitors, such as McDonald 's and other similar corporations have been combined to represent the remaining 36.8% market shares (IBISworld, 2014). With having over 63% of the combined market shares, competitors listed under the “other” category must be adaptable in planning and executing their corporate strategies to keep up with the industry leaders. Within this industry, the rivalry among its competitors is high. Already dominating the fast-food industry, McDonalds has entered the coffee and snack shop industry by offering premium coffee product line, under the McCafe brand, in its establishments to compete within the coffee industry. At the end of 2013, McDonald’s announced was teaming up with Kraft Food group and had plans to follow suit and offer packaged coffee in grocery locations to further compete with industry leaders (Forbes,2014)

Product differentiation could give businesses in this industry the competitive advantage over its competitors. Such differentiation could include, brand perceptions, recognition and associations, product quality and overall experience. It critical for a business to understand the consumer’s perception on the brand in a competitive context to further analyze and implement strategies to better develop brand differentiation and positioning (McCarthy &
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