· Bargaining power of suppliers: Low.With its scale of company, Starbucks certainly has a competitive edge incomparison with other rivals in the market. Though Starbucks is able to buy itsinput goods from any supplier, the company spent 26% more than the market pricefor all of its coffee in fiscal year 2014 report. Starbucks’ suppliers arecomparatively limited, despite of the power Starbucks holds due to the amountof goods demanded. For the input markets that are consisted of dairy farmersand coffee bean plantations, price is decided by supply and demand.Consequently, substitutes are accessible if Starbucks searches for a new pricerange because of the high competitiveness of the market.
Furthermore, with thedisadvantages of isolated placements and low retail abilities, suppliers cannot forwardly take actions by themselves. Basically, Starbucks possesses allthe power in the connections it has with its suppliers.