LADERA, JUSLYN ANN D.
IT 2E
Industry and Competitor Analysis Activity
Application Questions:
1. Starbucks has been very successfully selling high-priced coffee despite the fact that consumers
could easily substitute Starbucks coffee for less expensive coffee or substitute its coffee for less
expensive drinks like soda, bottled water, or fitness drinks. Why do you think Starbucks has
historically been so successful in avoiding substitutes? Do you think its advantage is eroding in
this area? If so why? If its advantage is eroding, what could the firm do to change this situation?
Answer:
Starbucks has grown to become one of most well-known coffee companies in the world.
In my viewpoint, here are some aspects why it has been so successful through the years:
Starbucks has done an amazing job of establishing a concept where anyone can enjoy a
delicious cup of coffee in a welcoming environment. They see the business through the eyes of
the customer. While it is very simple to list your customers’ needs and wants, creating a setting
that will please all of your guests is far more difficult. Starbucks appeared to have solved the
problem quite successfully. They own the term Frappuccino and stay updated with the latest
trends while offering their original drinks. Another thing I have noticed with Starbucks would be
that their locations are ideal for meetings. They’ve got it all covered, whether it’s work meetings,
friend meetings, or spots where you need some solitude to concentrate and study. Additionally,
do you notice that every Starbucks establishment has the potential to amaze you? You’ll still look
everywhere, and one of the things we’ll look for a place is comfort. Being alone around Starbucks
has never left anyone feel uncomfortable. It’s worth noting that their color combination or scheme,
seats, and tables over the world are all fairly similar, but they complement each other, creating a
pleasant and classy ambience. Finally, I’ve noticed that their service and staffs are efficient,
cheerful, and enthusiastic, and that they are all obviously well-trained.
To answer the second question, I do not believe Starbucks’ lead in this area is eroding.
Starbucks has consistently demonstrated a competitive edge through product innovation
leadership. It has been willing to adapt to shifting consumer preferences and tastes. Its
adaptability is another factor that contributed to its success. Unlike other international
corporations, Starbucks has always been socially concerned. Starbucks unveiled a program to
LADERA, JUSLYN ANN D.
IT 2E
help economic growth in certain of America’s low to middle income regions last summer as part
of a national strategy based on my research.
2. Mark Smith is thinking about starting a firm in the fitness drinks industry. When asked by a
potential investor if he had studied the industry, Mark replied, “The fitness drink industry is so full
of potential, it doesn’t need formal analysis.” Will Mark’s answer satisfy the investor? In what ways
will Mark limit his potential if his current attitude about the importance of industry analysis doesn’t
change?
Answer:
The investors will not be satisfied with Mark’s statement. Although it’s undeniable that the
fitness drinks industry has a huge amount of potential, that doesn’t guarantee that start-ups have
access to it. The fitness drinks industry, for instance, has considerable obstacles, especially if the
objective is to get the drink on supermarket shelves. Mark has to figure out exactly whatever the
obstacles to entry are as well as show investors that his company does have the capacity to
overcome them. Existing businesses are also competitive. Mark must come up with a strategy for
gaining market share from competitors.
Industry analysis is very important when starting a new business venture, as per what I
learned and understood in our course subject, The Entrepreneurial Mind, because it gives you
insights into the industry you’ll be entering as well as assessing your competitors. If Mark does
not adjust his approach and attitude toward industry analysis, he might restrict his ability to recruit
investors. Understanding the ins and outs of the business one intends to enter is fundamental to
marketing the possibilities of any new venture.