Markets and Strategy

1. Identify, analyse and discuss Strategic issues in the chosen fraternity Case: Industry structures and dynamics (5Forces) - Costa burnt umber Michael E. Porter, contends that, competition in an industry is rooted in its underlying economics, and competitive forces comprise that go well beyond the established combatants in a particular industry1. Costa Coffees strategists locution the decision of establishing which of Porters five forces, as viands against competition, ar of greatest entailmentance to the company. In the coffee food market the competition is high and therefore an individual strategy is unequivocal to draw in consumers. The first of these key forces is the threat of new-made entrants which will depend on the extent to which there are barriers to entry2. For this industry, the first barrier to entry that we can signify is that there are high economies of scale in the import of coffee. For Costa Coffee this means that their long-run average be of producing a coffee drink will fall as the company expands and specialises. Costa Coffee has a large market opportunity with coffee shops in 25 countries …close to 2,000 stores: much than 1,000 in the UK; and hundreds overseas3 meaning it is easier to attain competent levels of scale.

A purchasing economy of scale involves reduced cost to the business resulting from buying in mass bulks. Costa Coffee can receive supply of coffee beans from its main provider at a lower price due to rigid supplier connections and long-term contracts. Whitbread state that they plan to open most 120 more stores during 2010/11, in the key markets of China, India, Russia, the Middle eastern hemisphere and Central Europe 4. Costa Coffee needs to be aware that there are different government rules and law in each country that could hinder the competitiveness of their business. For example, a country in the Middle East with more mild competition rules may be hard to compete in, as the competitors could collude or form cartels. The... If you want to get a full essay, order it on our website: Ordercustompaper.com

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