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Write 5 page essay on the topic Situation analysis.Direct competitors include Seattle’s Best, Figaro and others while other fast food chains also poses as indirect competitors such as Dunkin Donuts,

Write 5 page essay on the topic Situation analysis.

Direct competitors include Seattle’s Best, Figaro and others while other fast food chains also poses as indirect competitors such as Dunkin Donuts, McDonalds and other fast food chains offering coffee as part of their menu. Competitors can either be direct or indirect competitors. Direct competitors are those companies who could offer the same product and services while indirect competitors are companies who could offer an alternative product or services (Möller, 2006). Needless to say, Starbucks operate in a very highly competitive environment.

Competition in the industry was aggravated by the recent financial crisis which changed the buying behaviour of Starbucks customers whose purchasing habits changed dramatically along with their choices of coffee products. Starbucks used to market its product as premium coffee commanding premium prices in the market. This strategy however changed with the changing behaviour of consumers in the aftermath of recent financial crisis. The “premium coffee” preference suddenly became less a priority and convenience and affordability moved to the forefront. The “prestige orientation” of Starbucks is no longer applicable in the changing behaviour of its customers. This trend continues and is now the reality of the market. Demand however is not seen to diminish. Customers however are now price sensitive to the coffees they purchase.

Economic environment determines the financial capacity of its market and business has to adjust correspondingly for it to survive. In the case of Starbucks, economic environment made Starbucks reconsider its position in the market when the financial crisis hit in 2008-2010 that companies were compelled to adapt to the new market realities to stay afloat as a business (Miron, 2013).

The main strength of Starbucks is its brand that commands confidence in

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