Chatime's Competitor in Malaysia
5845 words 24 pagesExecutive Summary Chatime seems to be blooming as the market leader in the bubble tea market of Malaysia. Instant-Chatime was recommended to maintain its market share in this competitive industry as suggested in the previous proposal. With this, Chatime seeks to investigate and study about its main competitor – Starbucks. A brief profile of Starbucks is shown and compared with our company. The illustrations and tables are tailored to what Chatime should be aware of the surroundings of every potential rival in Malaysia. This proposal is about our analysis on Starbucks discussing about the three strategies the market leader used in the beverage industry. We observed Starbucks’ accomplishments and problems in accordance with analyzing …show more content…
“The Competitive Forces of Chatime”
Chatime first has to consider the five factors that will affect the business performances – new entrants, substitutes, buyers, suppliers and the degree of rivalry between competitors to analyse its competence in the beverage industry. These forces would determine the firm’s attractiveness and its long run profitability in the industry. With Michael Porter’s five forces model, we can briefly study the strength of the current position Chatime is in and the directions we’re moving into to sustain in the beverage industry in Malaysia (tutor2u.com, n.d). Figure 2 shown would depict the significance of competitors being a threat to Chatime if we neglected these major forces of the business (Mindtools, n.d)
Figure 2: Porter's Five Forces on Chatime in the Beverage Industry
Firstly, the threats of new entrants and new substitutes where these two forces similarly play the role of deciding on whether or not to mark the selling prices of Chatime beverages. An example of a new beverage company intending to sell bubble tea drinks with similar quality and prices would be labelled as ‘New Entrant’ to Chatime. This is because regular and potential buyers of Chatime may want to substitute Chatime to the newer competitor. Next, both the bargaining power of buyers and suppliers would depend on the situation of market share of the company.