Bargaining Power of Starbucks Coffee’s Customers/Buyers (Moderate)
In the five forces analysis, Bargaining Power of Starbucks Coffee’s Customers is considered moderate.
Different brand of coffee has its different customer base. Singapore is a high living standard country, the customer will still willing to afford a higher price to enjoy a better quality of products, whether its coffee or environment. Moreover, most of the customers are purchase individually, therefore the influence of individual buyers is still insufficient.
Even so, the price of Starbucks products cannot be too high, because the customer’s observation is still keen. In the long run, customers will notice this trend and switch to other coffee brands that have a lower price
Threat of Substitution or Substitutes to Starbucks Products (Strong)
In the Five Forces Analysis, Threat of Substitution or Substitutes to Starbucks Products is considered strong.
As mentioned, Singapore is a high living standard country, customers prefer a healthy life in addition to a high quality of life. Therefore, customers will looking for a substitutes. They will pay the same or lower prices as Starbucks’s products to enjoy a healthy product. For example tea, fresh fruit juices, fruits tea and etc.
Threat of New Entrants or New Entry (Moderate)
In the five forces analysis, Threat of New Entrants or New Entry is a moderate force.
With the development of the trend, many coffee shops are now rising. With the influence of the trend, the new entered coffee shop soon became the target of customer switch without any switching cost.
Today, customers love to try new products. This has led to more customers switching to other new entry coffee shops in order to keep up with the trend.
However, Starbucks has always been a big brand. After the trend of the new entered coffee shop retreats, perhaps the customer will still choose to return to Starbucks.
Therefore, the Threat of New Entrants or New Entry coffee shops is existed but not the major.