Competitive Analysis: Starbucks and Max Brenner in Sydney Food Market

This research report provides a comprehensive analysis of the food and beverage market in Sydney, Australia, with a specific focus on the competitive rivalry between Starbucks and Max Brenner. The report explores the market structure, growth strategies, and pricing strategies employed by both companies. Through the use of primary and secondary data, the study examines the competitive landscape, highlighting key aspects such as digital engagement, store expansion, and the creation of new customer occasions. The report also delves into the pricing strategies used by each company, considering their brand value and market positioning. The findings reveal insights into the competitive dynamics within the Australian food and beverage industry and offer valuable information on the strategies used by Starbucks and Max Brenner to gain a competitive advantage. The report concludes with a summary of the key findings and implications for the companies' future strategies in the market.

RESEARCH REPORT ON AUSTRALIAN BUSINESSES

Abstract
The purpose of the current research report is to give out proper information in relation to the
food and beverage market the competitors in its and what are the different strategies which have
been used by the companies. It is to be mentioned that the companies chosen for the current
research are Starbucks and Max Brenners which are two major companies within the food and
beverage market of Sydney. Both the companies are globally operating companies and operate
on an international basis. Use of primary and secondary data will be done to conduct the
following research in an evident manner. It has been found in the current research that the
competition within the market is high both the companies are using growth and pricing strategies
to gain the competitive advantage over the others in the market.
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1. Introduction
The current report is based on analysis of the Food and beverage industry in Sydney Australia in
which the rivals are Starbucks and Max Brenner. Both the companies are well settled in the
market and are arch rivals of each other and they provide nearly the same range of products to
their customers. Both the company have originated from America and are now Operating in
different parts of the world. Starbucks is the company Established in Seattle Washington whereas
Max Brenner is based in New York City within the USA. The companies are giants in the market
and render in different parts of the firm which makes both the company globally present and
international operating companies. Starbucks is considered to be a brand for being a coffee shop
store. The beverages brand all around the world also gets to know the exciting aspects of Max
Brenner coffee. However, it is a chocolate restaurant chain and Retail Company operating in
different parts of the world (Huang, Rice, Galvin & Martin, 2014).
It is to be mentioned that both companies have different identities which are that Starbuck is
known for its coffee another beverage product range and Max Brenner is known for its chocolate
product which make them special. Both the companies and their respective brand have high
goodwill in the food and beverage market. The same goes in the Australian Food and beverage
industry. Both of these companies are giants in their own ways. Although it can be said that
Starbucks is slightly bigger in operational and fiscal context with respect to the Max Brenner. In
this report, there will be discussion over the existing rivalry between two companies in Sydney.
The current research has been conducted through the use of primary and secondary research
techniques in which both primary and secondary data was collected through which data analysis
was done and the findings of the current report were extracted. This helped it a better
understanding of the competition within the Food and beverage industry of Australia. The report
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will shed the light of the different marketing aspect between these two companies to measure the
nature and extent of competitiveness which is there within the organization. The current report
covers the market structure and industry competitiveness which is there in the market for current
situations. The marketing and the comparison between these companies will be laid out to
measure which company is doing better in the market. It is to be mentioned that the report
further discusses the growth and pricing strategies which has been used by the subjected
companies to grow and increase the competitive advantage to the other in the market. At the end
of the report, a proper conclusion will be drawn on the discussion and findings which has been
gained through the current report. In this day there will be an effective report which will be
created on the subject topic and which is spread efficient information between the competitive
rivalry of Starbucks and Max Brenner.
2. Findings
2.1 Market structure
The state of competition within the Australian food and beverage industry is immense t
companies LIKE Heavenly Chocolates, Max Brenner and Starbucks has\\have been marked
giants and there is another firm too which have to grow in the market competitors or are still
growing at a rapid pace. Hence there are various companies in the company and their increasing
numbers of customers too. It is to be mentioned that the competition within the market is
growing which is the state of competition is high and companies are working to gain a
competitive advantage in a very evident manner which increases the overall state of competition
within the market. There are new entrants two which are entering the market at a rapid pace to
gain and monetize their products.
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Market structure is best defined according to the organisation or the company talked about in the
r given paper. In the given research paper, two well known and established companies have been
discussed they are Starbucks and Max Brenner. The proposed market research on its structure
has been done upon Sydney, Australia. Most important aspects of the Market structure research
are the comparison between competition and pricing. The conducted research paper and the
market structure have been done with the help of the secondary data collected (Hadi, Sutiarso,
Awaluddin, & Herlambang, 2018). The two companies taken in the following research are good
in their fields and can be treated as the competitors in the same field. The following study is
conducted on the basis of the secondary data collection and has been done for Starbucks in the
case of the market share. In the Australian coffee market, the most popular coffee which is been
used is Latte and the total coffee industry is around 1.43 bln USD (data of 2017). Almost 75% of
the coffee in Australia is conducted instantly (Lovelock & Patterson 2015).In the country 95% of
the coffee outlets are independent, meaning the restaurants don't have to be dependent upon any
kind of outsourced or 3rd party, for providing the required raw materials for the coffee and other
pieces of stuff. Only 5% of the outlets are dependent upon the series of the sources production.
In the case of Starbucks, it had 20 outlets across the country. But due to the lack of resources and
the dependency factor of the company, more than two-third outlets were shut down. The main
reason for this downfall was the already established Australian coffee culture (Donnelly,
Simmons, Armstrong & Fearne, 2015). The main common culture about the two competitors we
have that they are on the same field of the food and beverages. Now take the second company in
consideration, Max Brenner. The Max Brenner is one of the biggest chocolate manufacturing and
selling company worldwide also comes under the food and beverages. According to Lee, Hallak
& Sardeshmukh (2016), the revenue of the Max Brenner is discussed below with the help of the
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secondary research. The total revenue of the Max Brenner in the year 2107 was 312 million US
dollars. The annual growth of the industry was 2.3% from the year 2013-2018. In accordance
with Bragg, Roberto, Harris, Brownell & Elbel (2017), there can be several difficulties for the
new entities in the Australian market, the firms like who want to get established Network, maybe
challenging. It can be said that both the companies have tried best to establish and have a proper
network in the Australian market but due to the already established network of the Australian
Society of food and beverages, it becomes hard to established their fields (Weller, Kleer, &
Piller, 2015).
2.2 Growth strategies
During the primary research and interviews taken by some of the managers in Sydney's food and
beverage market its has been seen that both the companies are following on their core
competencies. Starbucks core competencies are there coffees and they are still maintaining the
quality of their coffee and adding more varieties and flavour to them. And similarly, like
Starbucks, Max Brenner also maintaining their quality of chocolates and expanding the varieties.
During the primary research, it has been also seen that both companies are adding new items to
their menu in order to grow their businesses. And also one of the best core competencies of both
the companies is their outstanding customer service. Both the rivals companies Starbucks and
Max Brenner followed a good growth strategy according to some reporters and researchers. After
the completion of primary research and the data which are collected during the research, it has
been that they can also increase their growth in Sydney Australia by some growth strategies
which are as follows:
1. Increasing digital engagement: Both companies can increase digital engagement of the
customers by providing some discount if the payment of the bill is done digitally (James,
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2016). As in Sydney Australia, it has been seen that one-fourth of the people of Sydney
prefers digital payment. So in order to attract the customers both the companies can
provide or 10 or 20% discount in order to increase their sells and expand their business.
2. Growing the numbers of stores: Both companies can also increase growth by increasing
numbers of the store. According to Birkin, M Clarke & Clarke (2017), the companies can
also try drive-thrus in some areas of Sydney food market. Both the companies Starbucks
and Max Brenner are opening up express stores which essentially function as a
walkthrough in Sydney. This strategy will help the companies in order to increase store
penetration in the market. As secondary research shows that companies will see a
minimum of 5% comparable growth in the market of Sydney by implementing this
growth strategy.
3. Lifting the coffee and chocolate experience: According to the data collected during the
primary research, it has been seen that both the companies are pulling all stops in order to
position itself as the most preferred coffee and chocolate shop. Both companies can lift
their experience by adding different items to the menu and makes the experience more
premium to the customers. Companies can change the portfolio of their new stores and
can hope to address the problems of competition in the market and ubiquity by delivering
customers the highest quality of chocolate and coffee with some new items and varieties
(Barringer, 2015).
4. Creation of new occasions for the customer: Both companies can increase their growth in
the market by the creation of new occasions for the customer in the market. Breakfast and
lunch hours are the fastest growing daypart for the companies. According to Chimhundu,
McNeill & Hamlin (2015), both the companies can offer and launch new item which was
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aimed to enticing a greater number of customers to their stores. This can be done by
offering new and innovative food and beverage options for customers during day hours.
2.3 Pricing strategies
Pricing strategy is one of the most significant factors which plays an important role in the
operational activities of the firm and to help them grow there monetary stand and position within
the market. Through secondary research, it can be said that both the companies have a good
amount of goodwill within the market so they have a brand value which affects their pricing
strategy in an effective manner(Davcik, & Sharma, 2015). Starbuck has been a tag of being and
proving a premium product to the customers and has become a status symbol for many in the
past decade. The pricing strategy which is used by the firm is called premium pricing strategies.
In accordance with the current pricing strategy of the firm it prices its product premium; this
means the price of the product is kept high to maintain its premium status in the market. The
company does this to maintain a high quality of production and the quality of the products as
well. No this has worked for the firm as the company take the product as a luxury and premium
products through they are attracted towards to the products in an evident manner. Starbucks
through this has used its brand to effective price\ce their product premium (Cowling &
Tanewski, 2018). On the other hand, Max Brenner is also a company which has earned fame and
brand value in the recent days. This is because of the high-quality chocolates and beverages
which it has offered to its customers. Now the company believes in maintaining the quality of the
products and to render producer at an attractive price so that more amount of customer are that
towards the products. In such a case, the company uses Cost Plus pricing method of pricing. In
such a pricing method, the company incurs profit over the cost of the products which it has put
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into the production of the product (Shaw, 2016). Through this, the acts of the production are
efficiently maintained over the product and there is stagnant cost available for the company for
future production. In this way, the company are a good margin of profit on each unit of sells. It
can be said that through the secondary data it has been found that both the company use stated
methods of pricing to their financial advantage and incur a good amount of the revenue through
such proper pricing method. As the Starbucks has premium pricing method the company incurs
higher revenue in respect to the Max Brenner in the market (Hafez Al Kotob, Mahmoudi,
Hajisami, & Wee, 2018). This means that Starbucks has premium pricing which makes the price
higher than that of others but the demand of the product is Laos high because of its brand value
this is the reason why the company earns better profit than Max Brenner which is also earning a
good revenue through sale use the Cost plus pricing method which is suitable for its operational
values.
Through the use of primary method of research interviews and observation it was found that the
storekeepers and managers of other company thinks that the two companies have efficiently use
the pricing strategy to the benefit by\ut Max Brenner now has to change the following and has to
shift to a better pricing strategy which will help the following to earn higher amount of profit for
the future operations. Dome stated that Starbucks has been losing some customer due to its
premium pricing method but still has a customer base which will help the following in its
prolonged existence within Sydney’s food and beverage market (Zhou, & Gupta, 2018).
Max Brenner is recommended to change its pricing strategy although the following has worked
for its. It is time that the company looks forward to earning a high amount of profit through
which it can be financially stable. The company has created a brand value for itself which is why
the company has a good customer base in the market. As the company produces good quality of
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products the customer will not disappear even though the company increase the prices. Although
there can be an effect on the overall sales after the few time everything will settle and the
company will grow its customer base as well as their sales in Sydney's Food and beverage
market. Hence, it is very probable that the company uses a premium pricing strategy to benefits
its overall financial and operational stability (Fan, Lau & Zhao, 2015).
3. Conclusion
Concluding in the light of above context it can be said that both the companies have been good in
providing and creating effective marketing strategies in order to deal with the competitive nature
of Australian Food and beverage industry. Both the company has coped up with increased
competitive pressure and have made their place worth in Sydney's market. It has become very
evident through t5he above research the market aspects of both the firm has been described and
discussed in prominent which has laid out the major parameter based on which a company can
operate in the food and beverage market of Australia. It is to be mentioned that through the
above analysis and research it has become very prominent that both Starbucks and Max Brenner
has used prominent strategies which have helped them achieve success in their operations
although there some races and strategies which will have to work on in fast-changing market
dynamics and increasing market pressure. The current research was important to know the
competitive rivalry between two food and beverage companies which are operating the firm to
see examples of operations which is to be carried out within the market in order to acquire
sustainable rate of growth and achieve success within this market.
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3.1 Recommendation
There are some recommendations which are to be made and which have been gained through the
current research and they are as follows:
1. Companies should use effective marketing strategy in order achieve competitive
advantage over the others companies in the market. This will help in better marketing
products which help the firm to grow in the market.
2. A new company should use an effective pricing strategy so that they are able to operate
and monetize their products inefficient way which will help them to achieve financial
stability.
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