Starbucks Coffee Market

10 Italian Coffee Market –

• Italy is the second largest coffee consumer in European Union after Germany, accounting for 15% of total EU coffee consumption in 2009. Italian coffee consumption amounted 349 thousands of tons in 2009. Consumption increased by 1.3% annually on average over the period 2005-2009 (ICO, 2010).  This confirms that Italians drink a lot of coffee.

• But based on our competitive analysis, even after having so many opportunities in Italy, our group has chosen that Starbucks shouldn’t enter into Italian coffeehouse market.

Why Not –

• Product – The evolution of Starbucks certainly absorbed some of the Italian coffee tradition, but it was structured around the American society. Despite being inspired on the Italian culture, therefore, it is probable that the Starbucks model would not fly in Italy.

• Coffee experience for Italians is more personal than Starbuck can offer. Italians also do not like plastic cups, because they do not even consider to drink coffee during walking or during driving.

• Price – The average price for coffee in Italy is 0.90 Euro. Italians may not get used to pay average 2.50 Euro for coffee at Starbucks shops.

• As Italian do not use many size options for coffee as Americans, Starbucks can reduce the price by this factor. Also as high competitiveness, Starbucks will have also to reduce the price to keep going well. As an average price must be about 1.90 Euro, but definitely with better quality not to get customers’ bad feedback because of higher price than Italy’s average.

• Competition – Italy is full of coffee houses and coffee shops, unlike some other countries.

• Brand Image – The Italian people would be reluctant to abandon their traditions, and the risks of an eventual failure out weight by far the possible rewards of succeeding. The image about the espresso experience is a corner stone of Starbucks’ business model, and they shouldn’t not risk to damage it.

9-11 Global “Coffee Wars”

• McDonald present in more than 118 countries with more than 35,000 restaurants and have good opportunity to open McCafe. But their main product line is burgers (fastfood) and trying to cater to working- and middle-class households.

• Starbucks is present