Business Marketing

11 Pages 2659 Words

tion and how critical they are to the success of the company, he was able to achieve his goal within a few years. During this time of course he has been able to open a total of 1,100 stores and continues to do so until this day. Starbucks Coffee Co. continues to address the issues introduced in Porter’s Five-Force Model as such: New Entrants (Barriers to Entry in to the Coffee Industry): There are many barriers to entry such as economies of scale where new firms entering the market will have to contend to the competition in the area of price and costs. The aspiring new firm may have to conform to the economic scales already set for them which may mean high cost and high pricing or may have to result to a cost disadvantage. These disadvantages may effect production, marketing, research and development and many other elements directly related in the determined success of ones company. Product differentiation which ties in brand identification that can and will result in new firms having to spend a lot of capital earnings to break the customer loyalty that has already been established. Brand identification is a result of costly advertising and customer service that a companies plays out to gain the market share needed to bring in a profit. Capital is a must for all startup companies for investment and survival purposes. Capital can create barriers for new entrants because it may not exist for them to make up the lost expenses used to contend to the many other barriers that were previously introduced. Starbucks because it was always Starbucks took a major risk starting up which costs a lot of capital which of course was made back through much profit and undoubted success. Yes, Starbucks did have to overcome the may barriers listed and it was costly and time consuming but it did pay off in the long run because of the management team and the leadership and eagerness of Schultz. Another barrier may include the access a company has to the dis...