Starbucks Case Study
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Starbucks, despite fierce competition, hope to increase its market share and maintain as the number 1 coffee retailer in the US, with the help of new innovative products and technology. Lets study about Starbucks market structure as a specialty coffee retailer in US, it's characteristics and their latest market strategic moves to show their interdependency with their rivals. MARKET STRUCTURE(OLIGOPOLY)
Starbucks currently holds 33% of the market shares in the US. It has more than 11,000 stores in the country. It's main competitors are Dunkin Donuts (23%, 6,000 stores in US) & McCafe (26%, 14,000 stores in the US)
Oligopolists differentiate their products through • Physical qualities • Sales Locations • Service provided with products • Product's perceived image in consumer's minds [pic]
Physical Qualities
Premium coffee & specialty coffee is what Starbucks customers is after. Starbucks products pricing are premium, due to the company's commitment to quality products and high level of customer services. Specialty coffee accounts up to 75% of Starbucks sales. Starbucks primary targets are designed to maintain repeated business among it's targeted groups. Adults aged 25 to 40, which they describe as upscale coffee drinkers, due to their high income. This group accounts up to 49% of their business. Another group aged 18 to 24, mainly are students account for 40% of their business. As compared to Starbucks, customers of Dunkin Donuts look for value for money and their boarder selection of food. McCafe, since its launch in 2009, had provided customers alternative options, with its lower priced coffees. All 3 firms provided basics coffees like latte, cappuccino, mocha, hot chocolates with each firms having its own specialty flavors and food. Although Starbucks coffee is more costly than the other 2 firms, it still remains as the number 1 coffee retailer
Starbucks, despite fierce competition, hope to increase its market share and maintain as the number 1 coffee retailer in the US, with the help of new innovative products and technology. Lets study about Starbucks market structure as a specialty coffee retailer in US, it's characteristics and their latest market strategic moves to show their interdependency with their rivals. MARKET STRUCTURE(OLIGOPOLY)
Starbucks currently holds 33% of the market shares in the US. It has more than 11,000 stores in the country. It's main competitors are Dunkin Donuts (23%, 6,000 stores in US) & McCafe (26%, 14,000 stores in the US)
Oligopolists differentiate their products through • Physical qualities • Sales Locations • Service provided with products • Product's perceived image in consumer's minds [pic]
Physical Qualities
Premium coffee & specialty coffee is what Starbucks customers is after. Starbucks products pricing are premium, due to the company's commitment to quality products and high level of customer services. Specialty coffee accounts up to 75% of Starbucks sales. Starbucks primary targets are designed to maintain repeated business among it's targeted groups. Adults aged 25 to 40, which they describe as upscale coffee drinkers, due to their high income. This group accounts up to 49% of their business. Another group aged 18 to 24, mainly are students account for 40% of their business. As compared to Starbucks, customers of Dunkin Donuts look for value for money and their boarder selection of food. McCafe, since its launch in 2009, had provided customers alternative options, with its lower priced coffees. All 3 firms provided basics coffees like latte, cappuccino, mocha, hot chocolates with each firms having its own specialty flavors and food. Although Starbucks coffee is more costly than the other 2 firms, it still remains as the number 1 coffee retailer