Competitive Dynamics: intense rivalry amongst similar competitors that has the potential to alter a company’s strategy.
In this post, I will go over some of the scenarios in which Starbucks responded from competitive action brought on by their strongest rivals.
The two best selling coffee chains in the US today are Starbucks and Dunkin, with most Americans having a strong opinion on who is superior. Dunkin, is loved for their reasonable prices and various food offerings while Starbucks tends to market more as the “premium choice.”
Starbucks reacted to this by expanding options for less expensive drinks, by offering more deals and smaller sizes for less. However, Starbucks knows the value of remaining the premium choice, so they expanded more in this aspect by offering more in terms of custom syrups, dairy free options and other high-quality specialties.
Starbucks efficiently responded to the competitive threat by taking the sought-after qualities of their competitor (price) and staying true to their promise of delivering a high end coffee experience.
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