Competitive Rivalry or Competition with Starbucks Coffee (Strong Force)
Starbucks Coffee faces the strong force of competitive rivalry or competition. In the Five Forces analysis model, this force pertains to the influence of competitors on each other. In Starbucks Coffee’s case, the following external factors contribute to the strong force of competition:
Large number of firms (strong force)
Low switching cost (strong force)
Variety of firms (moderate force)
This part of the Five Forces analysis shows that competition is among the most important of Starbucks Coffee’s concerns. The company faces a large number of competitors, which have different sizes, specialties and strategies. For example, Starbucks faces the competitive force of McDonald’s and Dunkin Donuts, as well as other specialty coffee companies. The strong force of competition is also due to the low switching cost, which means that it is easy for customers to shift from Starbucks to other brands. Thus, based on this component of the Five Forces analysis, competition should be among Starbucks Coffee’s top-priority challenges.