Starbucks - Five Forces Analysis

Starbucks - Five Forces Analysis

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Short description of Porter's Five Forces analysis for…

Intensity of Existing Rivalry

Exit barriers are low (Starbucks) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...
Large industry size (Starbucks) Large industries allow multiple firms and produces to prosper without having to steal market share...

Bargaining Power of Suppliers

Volume is critical to suppliers (Starbucks) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...

Threat of Substitutes

Substitute is lower quality (Starbucks) A lower quality product means a customer is less likely to switch from Starbucks to another product...
Substitute product is inferior (Starbucks) An inferior product means a customer is less likely to switch from Starbucks to another product or...

Bargaining Power of Customers

Buyers require special customization (Starbucks) When customers require special customizations, they are less likely to switch to producers who have...
Low buyer price sensitivity (Starbucks) When buyers are less sensitive to prices, prices can increase and buyers will still buy the product....
Product is important to customer (Starbucks) When customers cherish particular products they end up paying more for that one product. This...
Large number of customers (Starbucks) When there are large numbers of customers, no one customer tends to have bargaining leverage....

Threat of New Competitors

Strong distribution network required (Starbucks) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
Strong brand names are important (Starbucks) If strong brands are critical to compete, then new competitors will have to improve their brand...
Customers are loyal to existing brands (Starbucks) It takes time and money to build a brand. When companies need to spend resources building a brand,...
Geographic factors limit competition (Starbucks) If existing competitors have the best geographical locations, new competitors will have a...

What is Porter's Five Forces Analysis?

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