How does Porter's five forces analysis describe the food industry in which Dunkin' Donuts and Starbucks compete? What are the strategic implications for Dunkin' Donuts?

For Dunkin Donuts, three forces are low, and two forces are high.

The threat of substitutes and the rivalry among existing players are high, mainly because the products that Dunkin sells are easy to substitute, and there is stiff competition in the market.

The bargaining power of consumers, of suppliers, and the threat of new entrants are low. Better relationships with customers and suppliers are recommended for this.

For starbucks, the threat of subsitutes is high because coffee can be replaced for chocolate or tea.

The bargaining power of suppliers is low because there are many coffee producers in the world.

The bargaining power of customers is also low, although the do have some price sensitivity.

The threat of new entrants is low because there are economies of scale, brand issues, and supplying issues to be taken into account.

And the competition among existing players is high.

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