Strategic Analysis of Starbucks: Porter's Five Forces and VRIO Model

MC's strategy module.

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
External analysis with Porters five force model.........................................................................3
Internal analysis with VRIO model.............................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
APPENDIX......................................................................................................................................7

INTRODUCTION
Strategic analysis of company is very important and effective part of growth because
through that companies are able to find out the ways to promote products at marketplace. The
present report is based on “Starbucks” which American company, is a premier roaster, marketer
and retailer of speciality in coffee around the world. The report will evaluate external analysis
through porter five force and uses VRIO model for internal analysis.
MAIN BODY
External analysis with Porters five force model.
Starbucks is operates in the retail coffee and snacks stores industry. It is the dominates
industry with a market share of 37.7%. In order to analysis external market source by using
Porter five force model.
The porter five force model is include five forces which are: threat of new entrants, threat
of substitutes, bargaining power of buyer, bargaining power of supplier and competitive rivalry.
Explanation in the brief are as follows:
Threat of new entrants (Moderate):
This is the moderate threat of new entrants into the industry as the barriers to entry are
not high enough to discourage new competitors to enter the market (Dondjio and Haafst, 2017).
The Starbucks have moderate impact with new entrants because new comers are come with new
and innovative idea at marketplace in order to proper compete in competitive edge. The expected
retaliation from the well-established companies for the brand equity, resource, prime real estate
location which is creates a moderate barrier to entry.
Threat of substitutes (High):
Threat from substitute product are very highly impact to Starbucks at the market place.
But in the market place have reasonable substitute products of coffee which are likely tea, fruit
juice, water and other soda or energy drinks. This creates threat from substitute products but ion
the other side, company have threat from customers are made their coffee at home by using
coffee machines. This decrease a cost of buying from the premium coffee retailers like
Starbucks.
Bargaining power of buyer (Moderate to low pressure):
The bargaining power of buyer are had impact to company moderate to low pressure. In
the industry there are many of buyer and no single buyer can demand price concession. It offers