The company faces a large number of competitors, which have different sizes and strategies. For example, Starbucks faces the competitive force of Kopi Luwak and Oliver Cafe, as well as other specialty coffee companies. The strong force of competition is also due to the low switching cost, which means that it is easy for customers to shift from Starbucks to other brands. Thus, competitive rivalry is strong.
Bargaining Power Of Customers (Weak Forces)
the bargaining power of buyers is also one of the most influential force Starbucks Coffee's business. Customers can easily switch from Starbucks coffee brand to another because it is affordable for the price. Customers can also stay away from Starbucks if they want to, because there are a lot of substitutes, such as white drink coffee sachet and drink various places. Factors strong overshadows the fact that the individual purchases is small compared with total revenues of Starbucks Coffee's. Thus, the power of buyers is weak.
Bargaining Power of Suppliers (Weak Forces)
the supplier does not have much impact on Starbucks. Great overall supply Reduces the effect of any supplier company. Also, Starbucks has a policy to diversify the supply chain. This policy Reduces the influence of suppliers on the business even though each supplier has a moderate size Compared to the supply chain Starbucks. Starbucks Coffee does not need to prioritize problems or demands of suppliers. thus, the power of suppliers is weak.
Threat Of Substitute Products (Strong Forces)
The Five Forces Model analysis shows that the
replacement has the strongest potential for negative impact of Starbucks
Coffee's business. Starbucks customers can easily switch to a replacement
because there are plenty of substitutes, such as beverages from restaurants,
supermarkets and other items from tokosembako. The cost of switching to a low
substitute for Starbucks customers do not need to spend money at starbucks. In
addition, many substitute coffee beverages from Starbucks products. Thus, Threat
of subtitute Product is Strong.
Threat Of New
Entrants (Weak
Forces)
This part of the Five Forces analysis model
shows that newcomers have a powerful effect significant, but not at Starbucks
Coffee's business. newcomers can compete with Starbucks for a moderate cost of
doing business and supply chain development. However, new entrants find it
difficult to compete with established brands like Starbucks because it is very
expensive to develop a strong brand. Thus, this component of the Five Forces
analysis showed that the threat of new entrants is weak.
Generic
Strategies :
Cost Leadership
cost leadership of
starbucks coffee that is by offering very competitive prices with different
coffee flavors and high quality.
Differentiation
Starbucks employs a
broad differentiation strategy. This strategy is concentrated on a broader
segment of the total market. Starbucks serves markets that are determined by
the coffee drinkers. Starbucks has been well known to the need to prepare
orders to meet customer desires, no matter how detailed they are. Starbucks is
also well known for quality products, which, as the coffee to be made to
customers.
Focus
Starbucks
involves accommodate customers with ideas for developing new products and
services from customers. The best ideas were entered then attempted to
customers and further the idea of the most widely selected customers will be
realized by Starbucks. As we have seen, this company has been successful,
famous and the company has many branches in many countries, including Indonesia
itself to a wide variety of flavors such as caramel, vanilla latte or
cappucino.
