Starbucks ? Industry and Company Analysis
Introduction
A steady growth in restaurant sales throughout the 1990's has led to an abundant number of new companies entering the restaurant/specialty eatery segment hoping to grab a share of the market with their particular niche technique. US citizens spend almost half of their expendable income on food, mostly for dining out (Hoover's Online). Changes in lifestyle, trends, and varsity of the food industry have caused changes in the way companies compete in this industry, leading to a dynamic marketplace with a great deal of diversification. As the demand for convenience has made eating out a normal routine for Americans, the demand for specialty food services has increased in recent years (Hoover's Online). It is the goal of a company like Starbucks to obtain as large a share of this market as possible and to grow and maintain that market share in face of intense competition in order to remain profitable.
Market Structure
The market structure for the catering services industry falls into a monopolistic competitive market structure. There are many competitors in the industry competing to sell specialty food and beverage items in retail locations. Coffee is a commodity with marginal differences in quality, texture, and flavor. Companies such as Starbucks are normally price takers and are not able to exert a large degree of influence over the price they can charge. However, they do attempt to influence consumer demand for their own products by positioning their product and promoting different products in areas such as quality, flavor, or atmosphere of the eateries themselves.
Company Overview
Starbucks Corporation purchases and roasts high quality whole bean coffees and ...