POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

STA. MESA MANILA, MAIN CAMPUS

SITUATIONAL AND COMPETITOR ANALYSIS

OF THE STARBUCKS PHILIPPINES

MIDTERM EXAMINATION

CHRISTINE AIHIE B. MOLATO

BSBAMMOUMN 3A

APRIL 21, 2024

SITUATIONAL ANALYSIS

What is Starbucks Philippines’ current market position in the coffee industry?

Coffee shops are seen everywhere, wherever you look you will find one. In this Competitor and

Situational Analysis, we are going to talk about the Starbucks Philippines. Let me share first

about its’ background and some history. Noey Lopez is the CEO of the company (Starbucks)

here in the Philippines (Grana, 2022) before this company made itself to the market, there are so

many doubts in his environment. But as a risk taker, he tried establishing this coffee shop 25

years ago with the spot that most businesses got flop. When he met the Founder of the Starbucks,

he was given this phrase “Do not mess up”. As he was so competitive to make this established

shop successful, he strove to be on top of the Global Coffee Industry, and so it happens.

The last full report of the market positioning of Starbucks Philippines in the coffee industry that I

had accessed in the year 2022 said that Starbucks Philippines is the Leading Coffee Shop, which

gathered 775 million US dollar sales based on the statistics of (Statista, 2023). The next leading

coffee shop is Dunkin’ (142 million US dollar sales) followed by McCafé which has (86 million

US dollar sales). This statistic is showcasing how Starbucks Philippines made itself to the top

market despite having various competitors, we can clearly see the difference of their gap in terms

of sales. It is because Starbucks Philippines is keeping at pace with how it’s target market is

evolving.

According to (Restaurants 25 2024 | the Annual Brand Value Ranking | BranDirectory, n.d.),

Starbucks Philippines ranked top with the most valuable restaurant brand in 2024 garnering 14%

value increase to 60.7 million Us dollar. The coffee chain's reinvention strategy, which was

launched in September 2022 and places a heavy emphasis on expansion, increased employee

support, and innovative, experiential store concepts, is in line with this increase in brand value.
This coffee chain got reinvention of their marketing strategy which was launched in September

2022 based on the statistics of (Statista, 2023). They emphasized the brand’s potential to expand

well. They also developed their partnerships with their people and other companies, with this it

gives another sale generation to them as well as to their brand positioning in the market. In line

with the brand value, they made some store concepts that was in favor of their guests or

customers. The brand's ongoing popularity in the changing market is highlighted by the increase

in demand for its products, which is especially strong as people return to their regular office

routines.

Analyze Starbucks Philippines’ marketing strategies, including product offerings, pricing,

promotion, and distribution channels. (4p’s of marketing)

In this area, the focus of Starbucks is how will they satisfy their customer with the quality of

their products thus, the coffee chain has unveiled previously unheard-of product variants. They

also adjust their products based on the places that they establish it is for a reason that with this

strategy, the business can better satisfy and retain clients by accommodating their diverse tastes

and preferences across various geographies.

PRODUCTS

DRINKS FOODS AT HOME COFFEE

Featured Featured Whole Bean

Brewed All-day bakery Starbucks VIA

 Espresso Sandwiches and pastas

Blended beverage Oatmeal, Yogurts, & Fruits

Teavana tea Desserts

Refreshers Bake Box

Chocolates Ready-to-Eat & More

Starbucks reserve Reserve® Bake-in

Coffee traveler

Their product that was referred to its marketing mix surely is aligned with their target market.

This company is establishing high profile brand image within the market by promoting the

quality of their products specifically their coffee and other drinks. Because of these factors,

Starbucks became a second home to those people whose looking for the quality taste of coffee.

Aside from those beverages that they offer, specifically coffee, they also have Sandwiches and

pastas, Oatmeal, Yogurts, & Fruits, Desserts, Bake Box, and Whole Beans. Additional with this,

the company also prioritizes its customer’s request, the baristas also ensure to follow how the

customer want their order to be customized.

PRICE

Pricing is a very sensitive and delicate topic for Starbucks Philippines for a reason that they are

somewhat a niche market wherein they cultivate high profile company, and their target market

are the people who’s ready to pay high cost for their product. But all these pricings are all

justifiable as it went through thorough research and other considerations. Their pricing is based
on their target market’s willingness to pay for their service and product, I said that their pricing is

high but justifiable for a reason that they (customer) are paying for the environment and

experience that they will get. But one thing is for sure, pricing strategy of Starbucks Philippines

symbolizes branding and marketing as well as its positioning in the market.

PLACE

According to (Statista, 2023), Starbucks already has 447 licensed stores in the Philippines.

Having several licensed stores in the Philippines allows their guest customers to feel and have

access to its products and services. Today, Starbucks’ target place to establish their store is in

community places. We all know that we live in an ever-changing world and market, in line with

this, the brand continues to improve their products and how they handle and cater their customers

by conducting and having e-commerce and payment processes.

We all know that almost half of our lives today are with our phones, that is why the brand adapt

to it, they made mobile application where the customers purchase their drinks and have this so-

called Starbucks’ cards. Having online platforms to place their product was good and an edge

towards their competitors. The brand also collaborates with third-party food delivery services,

they made this for those people who hates waiting in line. It is truly effective for a reason that it

will also lessen the long lines of the customer that will wait in line.

PROMOTION

The company promotes it brand to a social media platform, they use this strategy for a reason

that a vague number of people are using social media. Using this strategy will make a big

progress with taking possible customers attention. This brand uses better quality images to attract

people to purchase their brand, one of their techniques is to put pictures in their site which people
can see. The experience of one customer can affect your business, that is why word of mouth

became one of their promotions. Customers taking a picture of their cups or purchased goods and

then posting it on social media platform is a great deal for them because it is like free

advertisement.

DISTRIBUTION CHANNELS

They sell their products with their licensed stores around the world, and they collaborate with the

food services corporation. They purchase their products most on local farmers, especially when it

come to the beans they are brewing. Having this type of distribution allows them to expand their

target market. In summary, Starbucks sells their coffee not just in their own cafes but also in

grocery stores and other retail establishments through an integrated distribution model.

Identify key challenges and opportunities facing Starbucks Philippines in the Philippine

market through SWOT ANALYSIS.

SWOT ANALYSIS

STRENGTH WEAKNESSES OPPORTUNITIES THREATS

Customer Loyalty High Pricing Rewards and Loyalty Third wave coffee

program shops

Active digitally Competition with Third-party food Competition with big

other coffee industry delivery outlets

Strong brand Generalized Product Innovations Changes in consumer

positioning standards for most preference and trends

 products

Commitment to Product imitability Partnerships or Imitations

sustainability alliances with other

firms

Customer loyalty

As this brand has a strong presence in the market, this allows them to have a bigger scope of

target market. Having loyal customers in their brand makes them retain those people, they will

surely still comeback after purchasing one product. Customers also comes back because of their

reward and loyalty programs.

Active Digitally/ online

Engaging with social media platforms gives them more and wider scope of target market. Most

of the people uses their social media accounts that is why this is one of their strengths for a

reason that they can be known by these people and they’ll probably get their attention.

Strong brand positioning

The brand Starbucks established itself to the top at the market. Starbucks has been able to stand

out from rivals and build a devoted client base thanks to its excellent brand recognition. They

portray a better quality of products and services and they are most likely a niche market for a

reason that their target market are the people who’s already working, specifically the one who

can pay high-cost product.

Commitment to sustainability
First off, it lessens the company’s environmental effect, which can enhance its standing and draw

in customers who value social responsibility. Because more efficient operations can result from

sustainable practices, it can also help Starbucks cut expenses (Pereira, 2023). A dedication to

sustainability can also aid Starbucks in luring and keeping top personnel, as many workers are

drawn to organizations that place a high value on social and environmental responsibility.

WEAKNESSES

Pricing

As their pricing is higher than any other coffee shops, this can be their weakness. But knowing

this brand their pricing is justifiable with the service, product and experience that they can give

to the customer. One of the factors that affect them is it will lessen the product affordability but

then again, their target market are people who can pay high-cost products, meaning they are

ready to have a quality lifestyle already.

Competition with other coffee industry

Their supposedly market will come to those coffee shop that has cheap prices compares with

their products.

Generalized standards for most products.

A portion of its product line does not conform to the cultural norms of other markets. For

instance, its expertly designed beverages may not align with consumer preferences in certain

regions.

Product imitability
The brand doesn’t own some of their products that is why some of their competitors can access

some products they have and turns out to imitate their products.

OPPORTUNITIES

Rewards and Loyalty program

Filipino people love rewards and discounts, these factors can make them establish loyal

consumer. And for those who will be their future customer, they will be one of the loyal customer

for sure because these will benefit them and it will strengthen the bond between it and its clients

and promote client retention.

Third-party food delivery

Collaborating with third-party food delivery can expand how they market their brand or a reason

that there are some customers that don’t have the patience to wait in line that is why having

collaboration with this is a great opportunity. Starbucks could launch its own coffee delivery

service to improve consumer satisfaction.

Product Innovations

Understanding that customers also want to explore other taste, innovating products helps the

brand be recognized by the customer and can have the bigger possibility to have wider range of

market.

Collaboration with other companies

Starbucks can gain access to new technologies, client groups, distribution channels, and expertise

that can drive growth and value for the company by purchasing brands or companies that

complement its current business. This would increase its market share and presence.
THREATS

Third wave coffee shops

Also known as personal businesses, these are the threats of competition for Starbucks. The brand

is known for its better-quality service and products but personal businesses can also customize

the customer’s wants and it will surely affect the Starbucks future pricing to their products.

Competition with big outlets

The aggressive competition with the rising big company of coffee shops can be one of their

threat.

Changes in consumer preference and trends

The demand for specific Starbucks items may change if customers start choosing healthier or

more environmentally friendly products, and the corporation may feel pressured to modify its

product lineup to accommodate these new demands Pereira (2023b). Additionally, if customer

preferences change, for example, if more people order from their phones or computers instead of

in person, Starbucks may need to modify its business practices in order to stay competitive.

Imitations

As some of their products is not officially just for them to access, some brands can imitate those

products that they serve.

COMPETITOR ANALYSIS
Who are the major competitors of Starbucks Philippines in the coffee industry? Define top

3 competitor and discuss.

Based on our data, Local independent coffee shops, Dunkin and Krispy Kreme are the top 3

competitors of Starbucks. For a reason that Local independent coffee shops have cheaper prices

when it comes to their products and services. They also cater customer’s want in terms of their

customizations. One thing that lacks with it is how they establish their brand in the market like

Starbucks. Second is the brand Dunkin, for a reason that Dunkin engage with customer

relationships the most and they most likely have customer loyalty and rewards with customers

with cheap prices. One thing they lack is the physical store that most of these coffee shop has.

Last but not the least, Krispy Kreme ranked 3rd for a reason that most of its’ customer said that

even it has good physical store, standard service and limited time offers, the brands’ ambiance is

loud. It’s good for the company but for those who are studying there or having alone time, it’s

loud for them.

Evaluate 7p’s of marketing of Starbucks Philippines against its top 3 competitors.

(comparative diagram)
How do the marketing strategies of Starbucks Philippines’ competitors compare to those of

starbucks?

3. market trends (google forms)

What are the current trends in the coffee industry in the Philippines?

Analyze the preferences and behaviors of coffee consumers, particularly college student, in

the Philippines.

How do market trends and consumer behavior impact Starbuck Philippines marketing

strategies and competitive positioning?

Starbucks Philippines has its own target market and segmentation, by understanding what the

preferences of these consumers are and what attracts them the most allows the brand to create

exact product for them to purchase in the future. When they do this, they will create brand
positioning and customer relationship and retentions. This is the great impact of the market

trends and consumer behavior that will push Starbuck Philippines to reach its full potential.

What are the current trends in the coffee industry in the Philippines?

I will answer this question in my observations as a Food industry worker, I believe that the

current trends in the coffee industry in the Philippines is the cold brew coffees, iced coffees and

Frappuccino. Most of the customers who buys cold brew and iced coffees are the gen z, which

are at my age. They are willing to buy it in a high price just to have iced coffees, they ought to

visit places that offers coffee and try different flavors of iced coffees. One thing for sure is that

the ones who buys hot coffee are the person who’s between 30-50 years old. The premiumization

of coffee is another trend, with customers prepared to pay more for superior beans and actively

seeking out uncommon and special varieties. The growing popularity of specialty coffee and the

desire for distinctive and unforgettable coffee experiences are the main drivers of this trend.

Analyze the preference and behaviours of coffee consumers, particularly college students in

the philippines.
Based on our data, 2% of our respondents said that they go to coffee shop once a week, our data

also shows that 45% of respondents said that they go to coffee shops 2 times a week. So, in

conclusion, most of our respondents are not visiting coffee shops that most. The reason why our

respondents go to coffee shops is because they want to release stress (based on our data), some

answered they just want to refresh and quench their thirst from coffee. Some said that it is just

their habit, well, knowing the Filipino people despite of our tropical climate we love to take a sip

of our hot coffees. We also observed that majority of our respondents’ purchasing behavior is

very clear that they want iced coffees.

How do market trends and consumer behavior impact Starbucks Philippines’ marketing

strategies and competitive positioning?

By understanding the market trends and consumer behavior, Starbucks Philippines’ can create

new products and innovate new flavors and other Limited Time Offers for them to attract their

target market. Making this happen will sure make a positive impact wherein they can create bond

and more positive word-of-mouth with their hooked customers. Despite with the high-pricing,
customers will see what they will be paying. Their services will be highlighted, competitive

positioning will improve for a reason that customers from other brands will definitely try their

products.

How does Starbucks Philippines differentiate itself from its competitors in the Philippine

market?

Starbucks Philippines portrays high profiled coffee industry, wherein they offer high-cost

products. But all of these are justifiable for a reason that customers will be paying for the quality

of the food and beverages that will be served to them. The quality beans that they produce, the

people that they deploy is knowledgeable to handle orders and customer service. From the door

till the interior design of the Starbucks Philippines is shouting elegance and high-cost ambiance.

It will not lower its price for a reason that they know who their target market is, they know the

quality of the service they can provide. Starts form the social and economic responsibility that

they hold, supporting locals with its products and services and turning it into profit.

Discuss Starbucks Philippines unique selling propositions and brand Identity.

Theis USP’s are Commitment to quality, premium quality coffee, they establish a 3rd place for

customers. To discuss it furtherly, the core of Starbucks Philippines' brand identity and USPs is

delivering a superior coffee experience that extends beyond the mere consumption of beverages.

Customers are drawn to the company's dedication to quality, social responsibility, and providing

a warm and inviting atmosphere, which encourages brand loyalty (Strategic Analysis of

Starbucks, n.d.)

. Starbucks also stands out from rivals and appeals to customer categories thanks to its

specialized experiences, innovative products, and individualized marketing strategies.

Suggest additional differentiation strategies that Starbucks Philippines could implement to

gain a competitive edge.

Starbucks may demonstrate its dedication to sustainability even more by introducing more

environmentally friendly procedures, such switching to biodegradable straws and cups, cutting

back on energy use, and funding regional forestry initiatives. Starbucks' brand image may be

improved and consumers who care about the environment can be won over with this

differentiation technique. Having this differentiation technique will catch the attention of those in

green marketing customers. They must be aware of the plastics and other residues that will be

produced after they serve it to the customer.

FUTURE RECOMMENDATIONS

Based on your analysis, what recommendations would you provide the Starbucks

Philippines to strengthen its market position and competitive advantage?

 Mute and deaf partners

 Menu for vegan

 Innovative product names

 Make-your own coffee.

First, I would like to suggest that they must have a mute and deaf partner so that other

person with disabilities will not be intimidated if they ordered products from Starbucks

Philippines. Having person with disability partners will make Starbucks Philippines

better understand that there are diverse kind of people and that they must cater it because

they are possibly one of their target markets. There's this one we call vegan people
 doesn't get anything with meat or comes with animals, Starbucks Philippines must make

and innovate their products so that we can get this target market.

We are in the Philippines some of Starbucks Philippines product names are hard to read

so that some of their target markets confused to read the product's name. I suggest that we

must replace it with a Filipino word that the Filipino target markets will better read it out

loud with confidence. I am not saying this to prove anything, but I want the brand to

better understand that not all people are better in pronunciation with words especially

Filipinos. Make your own coffee is already part of different brand’s menu, I think this is

the time where Starbucks Philippines must adapt with how the market is and letting the

target market experience how their coffee was made is one of the top tiers that some of

the target market is looking for.

How can Starbucks Philippines effectively target college students, who are pursuing a

Bachelor of Science in marketing management, as a key demographic?

As a student who are currently pursuing a Bachelor of Science in marketing management I think

they can target college students like me by offering a limited time offer with marketing

connected name products and giving us some loyalty rewards that has marketing strategy

connected names with a swot analysis-like format of passport (like the mini coupon board of

popeyes)

Outline potential marketing strategies and initiatives that Starbucks Philippines could

implement to attract and retain college student customers.

 Make-your-own coffee.

 Filipino product names.

  Limited time offer product with free notebook.

Most of the college students in my generation likes to explore new things and experiences, I

think they must implement the make-your-own coffee movement so that they will attract college

students and I think this will result in the positive word-of- mouth that can possibly be a way of

Starbucks having vague number of customers. Replacing complicated name of products for

Filipino to pronounce to Filipino words are great for us to emphasize the nationality of the

people that we cater. Having limited time offers, tend to be curious whenever there is a limited

time offers on the products that you are promoting. The time limitation will lead them into

purchasing your production, the customers may be encouraged to try it out before product

disappears.
References:

Grana, R. (2022, December 4). Noey Lopez looks back on 25 yrs of Starbucks in the PH. ABS-

CBN News. https://news2.abs-cbn.com/ancx/food-drink/restaurants/12/04/22/noey-lopez-

looks-back-on-25-yrs-of-starbucks-in-the-ph

Statista. (2023, October 10). Leading cafes Philippines 2022, by sales.

https://www.statista.com/statistics/1288415/philippines-leading-cafes-by-sales/

#:~:text=Starbucks%20was%20the%20leading%20cafe,approximately

%20142%20million%20U.S.%20dollars.

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Starbucks Philippines. (n.d.). https://starbucks.ph/about-us

Pereira, D. (2023, January 12). Starbucks SWOT Analysis (2024). Business Model Analyst.

https://businessmodelanalyst.com/starbucks-swot-analysis/

Bhasin, H. (2024, February 28). Dunkin Donuts Marketing Mix and 7Ps (Updated 2024).

Marketing91. https://www.marketing91.com/marketing-mix-of-dunkin-donuts/

Krispy Kreme. (n.d.). https://now.krispykreme.com.ph/

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https://scholar.harvard.edu/files/nithingeereddy/files/starbucks_case_analysis.pdf