Competitive Market Analysis
As a fierce competitor in “all things coffee”, Dunkin Donuts has decided to develop a new product. The new product is designed to capture more of the market share of those who enjoy brewing lattes and other coffee drinks at home in a single cup coffee machine. To gauge the proposed products potential success, a competitive market analysis must be completed. The primary competitor is Starbucks, Inc. Included in this competitive analysis is a short historical view, factors that affect demand, supply, and equilibrium within the competitive market, any issues or opportunities that Dunkin Donuts faces that affect competitiveness, variable cost factors, and fixed cost factors and recommendations based on the analysis.
According to the Starbucks, Inc. website, Starbuck’s first location was opened in 1971 and was a simple narrow storefront in Seattle, Washington. (Starbucks, Inc. 2012) It was in 1983 that the atmosphere of the stores was changed due to the vision of Howard Shultz (Chairman, President, and CEO). The atmosphere was designed to be inviting to the consumers encouraging them to linger in the store. The company expanding quickly and today boasts more than 15,000 stores in 50 countries. (Starbucks, Inc. 2012)
Demand, Supply, and Equilibrium Prices
Many factors affect demand and supply, the biggest factors are the competitive market. There was a time that Starbucks dominated the coffee market however now there are many competitors that are selling almost the same product that costs less. Demand is always high in the coffee market and the single cup coffee market has done pretty well for Starbucks. Sales and revenue were down due to so many competitors that caught on to the gold mine of the coffee industry so Starbucks had to come up with other innovative ideas to supplement revenue. They first started with the single serve coffee packs that were more like instant coffee, no one else in the market other...