ORGANISATION – STARBUCKS

Starbucks Corporation is a roaster, marketer and retailer of coffee operating in 60 countries. The Company purchases and roasts coffees that it sells, along with handcrafted coffee, tea and other beverages and a variety of fresh food items, through Company-operated stores. It also sells a variety of coffee and tea products and licenses its trademarks through other channels, such as licensed stores and national foodservice accounts. As of September 30, 2012, it operated 9,405 Company-operated stores and 8,661 licensed stores. It has four segments: Americas; Europe, Middle East and Africa (EMEA); China/Asia Pacific (CAP), and Channel Development. In addition to its flagship Starbucks brand, the Company's portfolio also includes Tazo Tea, Seattle's Best Coffee, Starbucks VIA Ready Brew, Starbucks Refreshers beverages and the Verismo System by Starbucks. In February 2013, Tata Coffee Ltd and the Company inaugurated a roasting and packaging plant in Karnataka

Answer 5 out of 10

ANS OF THE QUESTION NO -1- FIVE FORES VIEW- READ ALL OF THEM CAREFULLY.

Porter’s Five Forces represent theoretical framework that is used for industry analysis and strategy development. Specifically, the five forces shaping competition within the industry consist of the intensity of rivalry among the competitors, the risk of entry of new competitors, the bargaining power of buyers, bargaining power of suppliers and the threat of substitute products and services (Sinkovics and Ghauri, 2009).

The nature of the relationships among these forces is best presented in the following figure.

Source: Downturn Strategist (online)

Rivalry among existing competitors is high within the industry Starbucks operates in with major competitors like Costa, McDonald’s, Caribou Coffee, and Dunkin Donuts and thousands of small local coffee shops and cafes.

Starbucks customers possess large amount of bargaining power because there is no and minimal switching cost for customers, and there is an abundance of offers available for them.

The threat of substitute products and services for Starbucks is substantial. Specifically, substitutes for Starbucks Coffee include tea, juices, soft drinks, water and energy drinks, whereas pubs and bars can be highlighted as substitute places for customers to meet someone and spend their times outside of home and work environments.

Starbucks suppliers have high bargaining power due to the fact that the demand for coffee is high in global level and coffee beans can be produced only in certain geographical areas. Moreover, the issues associated with African coffee producers being treated unfairly by multinational companies are being resolved with the efforts of various non-government organisations, and this is contributing to the increasing bargaining power of suppliers.

However, the threat of new entrants to the industry to compete with Starbucks is low, because the market is highly saturated and substantial amount of financial resources associated with buildings and properties are required in order to enter into the industry.

ANSWER TO THE QUESTION NO- 2