In addition, it competes with other specialty coffee firms. The switching cost plays a major role in enhancing the stiff competition in the market. To maintain the huge market share it currently enjoys, Starbucks must put competition on its priority list by adopting better practices than those of the competitors Koehn For instance, apart from the pricing strategy, it should improve the quality of products and services.
In the UK coffee industry, customers have high bargaining power. The bargaining power of customers has a direct influence on business operations. First, low switching costs in the UK coffee industry give customers different prices for the same product.
The second factor is the availability of substitutes. Customers tend to buy what is available in their locally provided it serves the intended purpose. Therefore, the company is unable to capture customers in places where substitutes are readily available. Customers who buy coffee in small quantity prefer small businesses to large companies such as Starbucks Starbucks Coffee Company There are many suppliers in the industry with high-quality products.
As a result, many of them supply their products at lower prices to firms in the industry Palmer The overall supplies of raw materials are larger than the demand. Therefore, suppliers must adhere to the specific needs of the firms in order to survive. Subsequently, the influence of supplies on the business operations reduces.
In terms of acquiring production goods, Starbucks Coffee and its competitors do not need to prioritize the concerns related to supplies Dobbs Substitute products pose a serious threat to the Starbucks Coffee. The main threats in the market are the small firms that produce small quantity and offer their products at lower prices.
At the same time, they tend to meet specific needs of customers in terms of quality products and services. Coupled with low switching costs, it becomes difficult for Starbucks to maintain its customers for a long period. A threat of new entrants in the market is moderate. On the other, high cost of brand development might discourage new firms. However, the moderate cost of entry and establishment of the supply chain can attract more firms into the market.
The Starbucks Company has positioned itself among the market leaders in the UK coffee industry. The strategic position of the organization does not have its basis on the prices of the products it offers. Instead, it practices premium pricing by offering products of very high quality. It also depends on the brand reputation and long-term experience in the industry.
Since most of the rival organizations in the UK market base their strategic positioning on the pricing, the Starbucks has varied positions. It is due to the dynamic nature of the industry. In order to remain relevant in the market for a longer period, it uses quality services, technology, pricing, and quick delivery to respond to varied needs of customers.
For instance, it introduces low-priced products among low-income customers to compete fairly with other firms in the industry Thomas Because of the different strategies employed by the company, it has several strengths and activities shown in Appendix II, which help in maintaining its competitive edge in the market.
Some of the strengths include brand recognition, high quality and premium products, desirable locations like in the United Kingdom and a large and loyal customer base Rosenbloom Many of the customers in the UK market are willing to pay higher prices for the premium quality products, which is an added advantage. Even though the Starbucks Coffee dominates the UK coffee industry, the kind of competition offered by the upcoming smaller companies is worrying. As such, it has to come up with better strategies to enhance its stake in the industry Uphill The Starbucks Company can use the international strategy to enhance its competitive advantage in the UK coffee industry.
The marketing strategy involves making new market ventures in various nations of the world using it brand reputation. By investing more in the international markets such as the UK, the Company is likely to have new opportunities.
For instance, UK cities are the major destinations for international travelers. A foreigner who had already used the brand in their home countries is likely to use it again while in the UK Michelli Because the Starbucks is a popular brand, it can easily expand its market base to travelers who come in the country.
With the lower taxes and tariffs on coffee in some of the emerging nations, the company is likely to improve on its market share nationally and globally John The increased demand for globally branded products puts the company in a better position to compete for a larger market share in the international arena. As it moves to the other countries of the world to invest, its brand name becomes the stepping-stone needed to achieve the success Wickizer The new market venture is also likely to increase the market base of Starbucks Coffee.
The majority of the consumers of the coffee products within Europe prefer premium quality products irrespective of the prices. Such consumer behavior is a great opportunity for Starbucks in the UK.
As such, the organization can easily succeed in the European market Clark Once the number of customers of the organization increases, it will be in a position to register more sales and profits. The revenue obtained from the new market ventures could also be used to promote the different corporate social responsibilities of the company Simon With enough capital base and revenue, it is easy for the organization to comply with the different regulations and pay the relevant tariffs on the product.
Even if the tariffs may be higher in the UK market, the firm will be still in a better position to make proceeds Schultz The other potential strategy for its competitiveness in the industry is to establish a direct link with customers who need individualized coffee products. The organization should acknowledge the continuous growth of customized consumption of coffee products.
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