Porters Five Forces Applied for Costa

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1/19/2011
Strategic Management
Research report based on Porter’s five forces model
Applied on
Costa Coffee Company

Strategic Management
Research report based on Porter’s five forces model
Applied on
Costa Coffee Company

CONTENTS
Introduction of porter’s five forces…………………………………………………… 3 Costa Coffee Company Overview……………………………………………………… 3 Costa SWOT Analysis………………………………………………………………………… 4 Strength, Weakness, Opportunities and Threats

Costa PESTLE Analysis……………………………………………………………………….. 6 Political, Economic, Socio Cultural, Technological, legal and Environmental
Porter’s Five Forces Analysis……………………………………………………………….8 Threat of new entrants…………………………………………………………………8 Threat of substitute product or services……………………………………….9 Bargaining power of suppliers………………………………………………………9 Bargaining power of customers…………………………………………………….10 Rivalry among current competitors in the industry……………………….10 Source of reference…………………………………………………………………………… 11
Introduction of porter’s five forces

Porter’s five forces is a framework for the industry analysis and business industry development developed by Michael E. Porter of Harvard Business School in 1979. Model provides a simple perspective for assessing and analysing the competitive strength and position of a corporation or business organisation. By this model we can develop a broad and sophisticated analysis of competitive position, as might be used when creating strategy, plans or making investment decisions about a business organisation. It is not a model for analysing individual competitors, or even what differentiates the performance of different firms in the same market. In other words, it is not used to assess why some firms performs better than others. In addition, the five forces model can be used to explain why some industries are more profitable than others, so that companies operating in one industry are able to make bigger profits than companies operating in another industry. Porter’s five forces model can be applied to costa coffee company. Costa Coffee Company Overview

Bruno & Sergio Costa set up their famous coffee roaster in Lambeth, London in 1971, supplying local caterers and Italian coffee shops with an exciting coffee, slow-roasted the Italian way. People couldn’t get enough of it and by 1978 the first Costa espresso bar opened in Vauxhall Bridge Road in London. To this day they still use the same method of slow-roasting their coffee beans, serving the brothers’ authentic blend of 6 Arabica beans to 1 Robusta in 500 coffee shops all over the world. Slowly company get extended and become one of the leading companies in UK's coffee brewing industry in terms of the volume of sales and profitability. It has also one of the widest connections among other UK coffee brewers made possible through a network of distributors and breweries. The Costa Coffee brand already has a premium status in all its markets. It is practically the main profit provider of the company in the broad markets of UK. Also, because of its market strength, the Costa Coffee brand has already obtained significant profitable segments on its own.

Costa Coffee SWOT Analysis

Performing a SWOT analysis means gaining a clear picture of the Strengths, Weaknesses, Opportunities, and Threats which made the organisation what it is. It is customary for the analysis to take account of internal resources and capabilities (strengths and weaknesses) and factors external to the organisation (opportunities and threats). SWOT analysis uses its findings to assess how well places our organisation is. Strength

* famous brand which is associated with high quality
* Has product that boosts...
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