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The Porter`s analysis reveals that Dunkin Donuts and Starbuck`s are direct
competitors in the store front coffee shops. They both have a customer base for
some people will want either Starbuck`s or either Dunkin`s Donuts coffee. The
substitutes are coffee customers can buy inside of a grocery store like Maxwell
house or Folgers. Dunkin`s Donuts is most releant in the fast food breakfast
industry where Mc Donald`s holds major market share and buyers have a high
level of bargaining power. In regars to bargaining power of suppliers, there are
numerous coffee bean suppliers to choose from, so the supplier power is low
because they are not the only

.
What does a Porter's Five Forces analysis reveal about the industry in
which Dunkin' Donuts and Starbuck's compete? What are the strategic
implications for Dunkin' Donuts?

The Porters analysis reveals that Dunkin Donuts and Starbucks are direct
competitors in the store front coffee shops. They are in a board market scope as
of right now no other new entrants coffee shops are in the business of making
their own coffee. They both have unique suppliers because no other company
makes products like Starbuckss and Dunkin Donuts. Both have a customer base
for some people will want either Starbucks or either Dunkin Donuts coffee. The
Substitutes are coffee customers can buy inside of a grocery store like Maxwell
house or Folgers. However, there will be no place to enjoy a cup of gourmet
coffee inside of the grocery store or service station.

The Strategic implication for Dunkin Donuts will have to begin with a good
(SWOT analysis) of the corporation. They should examine their strengths,
weaknesses, opportunities, and threats.

Unformatted text preview: Technology has a favourable impact for Starbucks.

Environmental Influences Environmental pressure groups : Non Governmental

Organisations and pressure groups possess incredible ability to coerce

businesses into changing their practices. They could influence businesses
through lobbying and boycotts. Such measures usually impact the intangible
assets of a firm which usually involves tarnishing a companys brand name.
Starbucks however works with the Fair-Trade movement (Economist.com) and the
accreditation that comes with such alliance massively improved Starbucks
image, hence Environmental influences is favourable for Starbucks. Legal
Influences Not all countries welcome big firms because they like to protect their
indigenous firms from unfair competition and takeover. Legal issues such as
Monopoly and national protectionist laws will affect Starbucks because of its size
and its plan of expansion. E.g. countries like India guard against such practices
with a legislation that bars external companies from owning more than 51% in a
merger (see Section 5). The more this happens in other countries, the more
Starbucks expansion plan is restricted. Thus legal influences are unfavourable for
Starbucks. In summary, the PESTEL analysis found that External influences was
altogether balanced since Sociological, Technological and Environmental factors
were favourable, while the other factors such as Political, Environmental and
Legal factors still pose a valid threat. Nonetheless Starbucks strengths
counteracts some PESTEL factors because although it cant control the external
environment, it has become more flexible to change (closing 600 stores in order
to adapt) and is quick at exploiting opportunities. As Accenture (the consultant
company) puts it; outthinking the competition is useless unless you can outexecute them as well. SWOT ANALYSIS Strengths Brand Image : Starbucks is
amongst one of the very few companies that have managed to successfully
create market awareness and stir up consumer interest in specialty coffee while
at the same time preserving brand dominance. Its focus on consistency in
delivering positive consumer experience stresses the point about consumer visits
to its cafes being an Experience rather than just seeing it as another coffee
maker (workforce.com). Starbucks recent change of Logo demonstrates
confidence in public awareness of its brand and follows the likes of McDonalds
and Nike that are easily identifiable by logo alone (marketwatch.com)