Topics: Coffee, Starbucks, Hong Kong Pages: 5 (1388 words) Published: April 9, 2013
Situation Analysis
CCSS Factors:
Pacific Coffee is the competitors of Starbucks. Pacific Coffee is another rather recognized coffee shop in Hong Kong which established earlier and it already quite well known by Hong Kong people. Pacific Coffee provides a classy and comfortable environment for customers prefers individual and quiet conversational coffee appreciation. On the other hand, Starbucks are doing an everyday lifestyle fashion. The "I need a coffee" type would probably prefer Starbucks while the "not in a hurry" type would probably go for Pacific coffee. As for the taste or the texture of the products, Starbucks' products evolve a great merchandising aura while Pacific coffee could provide quality, rich coffee and other beverage. Regard to the location, Starbucks stores are usually set up in the most popular location, especially in the business district area. Pacific Coffee will choose popular location but not the center of Starbucks area that environment is quieter and more peaceful.

Starbucks is geared to have will target a slightly more affluent group of businessman, students and leisure people around the ages of 18 to 35, who can spend time sipping coffee while working on other tasks or socializing. Starbucks typical customers buy the products in small quantities and they not only look for the quality, but also the environment where is a relaxing place for comfortable sitting. Products purchased at Starbucks are highly differentiated and unique.

At Starbucks, they sample coffees from around the world. Their coffee beans supplies are from America, Africa and the Pacific as the land where a coffee is grown creates subtle flavor differences. The quality of the coffee sought by Starbucks is very high. There are no substitute products for the coffee beans Starbucks must buy. Only suppliers who can meet Starbucks' coffee standards will be able to supply the giant company. The supplying industry to Starbucks, therefore, has few companies. Starbucks has a degree of control over its suppliers in an industry where it is possible for suppliers of premium coffees to have an enormous amount of bargaining power.

Substitute products also develop an environment of competition in the market among the competing partners. People may drink teas instead of coffee because green tea also contains some caffeine which can make people stay awake. Also, Taiwan beverages are popular in recent years, such as pearl milk tea. Although the selling prices of substitutes are normally lower, the values are different from Starbucks products. Nowadays coffees are being canned or bottled, like "Nestle". The option to buy bottled coffee is also inexpensive compared to coffee in a mug at the Starbucks store. With the focus on time management, canned product may be the ultimate choice of some customers.

PEST Factors:
Hong Kong's economy could rightly be described as the most laissez faire economy in the world. The government's policy is strictly non-interventionist, which just requires a minimal controls and disclosure of businesses. Moreover, Hong Kong has a simple tax system and low tax rate, free flow of information, corruption-free government, absence of exchange controls, and political stability and security. The above conditions bring Starbucks many growth opportunities.

Hong Kong has been considered as one of the commercial destinations in Asia. Travelers from the mainland have been very prevalent in the recent years in Hong Kong. This means that the consumer base of Starbucks Hong Kong is considerably affected by these changes in the economic standing in the country, particularly the influx of consumers not only from the mainland, but also from the other spenders from the adjacent Asian states. Also, inflation is a serious problem in this few years. It lend to a increase of the rental cost and a decrease of sales volume. Hong Kong has a minimum wage policy...
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