The Coffee Cafe Industry Using Porter s Five Forces And...

Introduction Starbucks first opened in 1971 in Seattle’s Pike Place Market. They came up with the name inspired by Moby Dick and the high seas that coffee trade was done over. In 1982 Howard Schultz was introduced to the company, and quickly joined the team. Schultz then traveled to Italy and was instantly inspired by the Italian cafes he visited. He wanted to incorporate the Italian coffee bars into the American markets by adding food to the menus, and providing a romantic setting for friends to meet at. Eventually his ideas took form and the brand Starbucks became what it is today. They tested this idea by selling espresso at their locations and the business took off. At the end of 2014 Starbucks had 21,366 stores worldwide and they continue to be a major name in the coffee and food industry. Although different competitors have risen in the market, Starbucks still remains strong with a competitive advantage to most. 1. Analyze the specialty coffee cafà © industry using Porter’s Five Forces and Macroenvironmental Analysis. What are the key success factors in this industry? Please include the Role of Compliments as a Sixth Force. Risk of Entry by Potential Competitors Risk of entry into the specialty coffee is very minimal in the case of Starbucks within the United States. Nationally Starbucks competes against brands like Caribou Coffee, Dunkin Donuts, and McDonald’s in the retail coffee and snacks store industry. Within the domestic market