Competitive Analysis for a New Coffee Shop in Japan

Business Studies

Competitive Analysis for the Bean

Before opening a coffee shop, called The Bean, at the Yokosuka Naval Station, Japan, it is necessary to consider the competitive environment. A competitive analysis looks at the competition that exists within the proposed market, this requires the identification and consideration of the types of firms and products that 'The Bean' will need to effectively compete with if the venture is to be successful. The competition may be divided into different types of competition; the first category will direct competition, firms that are seeking to compete in the same market with the same, or a very similar product. Firms that are competing for the same market, with a differentiated product will also provide competition. It may also be argued that the firm will also compete with companies that provide a different product, but satisfies the same customer needs (substitute products) (Mintzberg et al., 2011).

As The Bean will provide an American coffee shop experience, the direct competition which provides similar experience includes firms such as Starbucks and Doutor Coffee. Starbucks is a well know iconic U.S. brand, which is well-known in Japan, having entered the market in 1995 (Schultz, 2011), with a cafe in Yokosuka since 2004 (Montgomery, 2004). Starbucks offers a range of different gourmet coffees which are all roasted and ground in-house. Products in the stores include coffees such as latte, cappuccino and espresso, with the ability to customize the coffee to personal tastes with the addition of different flavored syrups, such as caramel, vanilla, and hazelnut (Starbucks, 2014).The drink may be customized with different types of milk, including soya milk, with the drinks offered in three sizes, to drink in or take away (Starbucks, 2014). The range also includes teas, hot chocolate and a range of chilled blended drinks, trade markets as Frapachinos, and bottled drinks, in addition to complimentary goods including sandwiches, biscuits, and cakes (Starbucks, 2014). The firm is strongly differentiated with its well recognized brand name, supported by a high level of marketing. The premium brand competes not only with a premium product, but by seeking to provide a premium coffee drinking experience, in comfortable surroundings, offering additional services such as free wi-fi (Starbucks, 2014). This is a strong competitor, which is already established with a franchise in Yokosuka.

Doutor Coffee is another large coffee shops company in Japan, which has several outlets in Yokosuka. The company specialized in roasting coffee and has a large number of franchise coffee houses providing a European coffee house experience which the Excelsior Cafe chain and Doutor Gourmet Coffee Shops. Doutor Coffee is an important competitor, not only because there are several of the chains coffee shops in Yokosuka, but because it is a strong competitor in Japan; it has more than 900 branches in Japan and is listed on the stock exchange. The growth strategy has been similar to Starbucks, with the use of the franchise model (Doutor Coffee, 2014). The firm has a smaller range of drinks compared to Starbucks, but also seeks to….....