Gevalia is a premium Swedish coffee brand with a 150-year history. While Gevalia crafts exceptional coffee, it lacks Starbucks' competitive advantages of a coffee shop experience with comfortable atmosphere and WiFi. Starbucks has created an inviting environment and experience for customers beyond just coffee. Gevalia focuses only on online and retail coffee sales without a comparable coffee shop presence. As a result, Starbucks has a clear competitive edge over Gevalia for attracting and retaining customers in the market.

1. Gevalia Coffee Marketing
Tracey Mitchell
MKTG 6100
Walden University

2. Gevalia Coffee
Gevalia coffee is a gourmet coffee crafted
in Sweden. Gevalia has a rich history
dating back 150 years of coffee making
expertise.
• 30 premium blends
• Traditional cast-iron roasting
• Official coffee of the Swedish royal
family
• Rich, never bitter taste
• Available in ground, whole bean, kcups,
packets and iced coffee

3. Target Consumer Market
Young adults/ college
students
Working
professionals
Upper/middle class
working mothers
Gevalia targets male and females ages 28-55 in these market segments:

4. Competitive Forces
Threat of New Entrants
The threat of new entrants for the coffee
industry is high due to its low entry barrier.
This scenario may allow for market
saturation if too many new retailers decide
to enter the business. This puts pressure on
the market in regards to pricing, market
costs and investments. (Martin, 2015)
Bargaining power of suppliers
Gevalia uses suppliers from all over the globe
including Hawaii, Brazil, India, and African
nations. These coffee suppliers include both
organic and fair trade coffee from small and
large farms. Suppliers affect costs and
profitability based on need. Gevalia value’s
sustainability and continually contributes to
these communities to ensure continued
availability and stable costs. (Gevalia, 2015b)

5. Competitive Forces
Bargaining power of buyers
Large volume buyers play a huge role in the
capacity for a retailer to distribute products
to the consumer. Gevalia’s Swedish
distributor, Mondelez International, provides
coffee to buyers around the globe. Recently,
in 2012 Kraft Foods brought the Swedish java
to the United States as part of its 5 billion
dollar global coffee business. (Anonymous,
2014) As a major buyer and well known
product distributor, Kraft has tremendous
negotiating leverage in this area.
Threat of substitutes
A primary player in the threat of substitution
in the coffee industry today are energy
drinks. The energy drink business has
skyrocketed from 3.89 billion in 1999 to a
whooping 27.5 billion in 2013. US coffee
retail sales amounted to 12 billion, while
energy drink sales were just below 9
billion. (Ferdman, 2014). Many teens and
young adults prefer these drinks to
traditional coffee beverages.

6. Rivalry among existing competitors
Starbucks Dunkin Donuts Caribou Coffee
• Focus on speed of
service
• Lower prices than
competition
• Discounts and specials
• Loyal affluent
customers
• Attractive atmosphere
• Global presence
• Markets accessories and
online items
• Smaller, northern mid-west
presence than competitors
• Delicious, rich coffee taste
• Marketing to the k-cup
consumers

7. Comparison of two coffee retailers
In 2014, Starbucks outsold Gevalia by
approximately $81 million in revenue sales.
(Ferdman, 2014b). Starbucks attracts it’s target
market of consumers by enticing them with a
comfortable, inviting environment and offers
free internet access within all of its café’s
worldwide. Gevalia does not have a coffee shop
presence in the consumer market. Starbucks
merchandises coffee accessories and other items
to increase its revenue sales. Gevalia focuses on
its coffee sales only , although it does offer a
small product line available only online.
Starbucks positions its coffee houses in highly
populated consumer traffic areas for increased
exposure.(Sicoli, 2015). Gevalia positions its
product sales online and in retail stores.
Gevalia vs. Starbucks

8. Starbucks Five Forces Review
Threat of new entry- New coffee retailers may enter the market to compete with
Starbucks coffee. These retailers may undercut Starbucks higher prices in an attempt to
gain increased market share.
Power of suppliers- Starbucks values its suppliers and contributes significantly to the
growth and sustainability of these global regions to maintain long term relationships.
(Gevalia, 2015b)
Power of buyers- Starbucks has a great competitive edge in this area as they have an
established and reliable brand and maintain good relations with major buyers. (Trefis, 2015)
Threat of substitute products- Energy drinks are a major threat to the coffee retail market
today and are projected to increase in the next few years.
Rivalry among existing competitors- Starbucks competes with a few major coffee chains
that seek to increase their market share and profitability.

9. Competitive Advantage
Gevalia
Online
sales
Retail
sales
Limited
market
Starbucks
Satisfied
customers
Atmosphere
Wi-Fi
High
visibility

10. Summary
Starbucks clearly has the competitive edge over Gevalia coffee. Starbucks has
created an entire experience for its consumers when they visit their coffee shops.
The atmosphere is that of a “hang out”, an inviting environment to visit with
friends, meet with co-workers, or work on your laptop. Consumers don’t mind
paying a little bit extra to enjoy a latte or cappuccino in the comfortable
surroundings.
Gevalia has created an exceptional tasting coffee with a strong Swedish history.
Advancing the market to the United States will help increase sales and brand
exposure. Since they do not offer a coffee shop environment, all sales are made
online or in retail environments. It would be hard for Gevalia to compete with the
iconic Starbucks for consumer market share.

11. References
Anonymous. (2014, May 16). Gevalia Kaffee coffee brand leverages Kraft’s capabilities. Food
Processing. Retrieved from http://www.foodprocessing.com/vendors/products/2012/gevalia-
kaffe-coffee/
Anonymous. (2013, March 27). Gevalia takes on Starbucks in national taste test. Media Post.
Retrieved from http://www.mediapost.com/publications/article/196787/gevalia-takes-on-
starbucks-in-national-taste-test.html
Ferdman, Roberto A. (2014a, March 26). The American energy drink craze in two highly caffeinated
charts. Quartz. Retrieved from http://qz.com/192038/the-american-energy-drink-craze-in-
two-highly-caffeinated-charts/
Ferdman, Roberto A. (2014b, February 24). It’s true: Americans like to drink bad coffee.
Washington Post. Retrieved from
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/02/24/its-true-americans-like-to-
drink-bad-coffee/

12. References
Gevalia. (2015a, May 16). 150 years of Swedish craftsmanship. Retrieved from
http://www.gevaliaexperience.com/
Gevalia (2015b, May 16). Our sustainability efforts. Retrieved from http://www.gevalia.com/Our-
Sustainability/our_sustainability,default,pg.html
Martin. (2104, July 19). Strategy frameworks. How to create market entry barriers. Entrepreneurial
Insights. Retrieved from http://www.entrepreneurial-insights.com/create-market-entry-barriers/
Neilson. (2015, May 16). Segment Explorer. Retrieved from
http://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&p
ageName=Segment%2BExplorer
Shayon, Sheila. (2013, March 29). Starbucks and Gevalia face off over social media and advertising
claims. Brand Channel. Retrieved from http://brandchannel.com/2013/03/29/starbucks-and-
gevalia-face-off-over-social-media-and-advertising-claims

13. References
Sicoli, Carlo. (2014, February 9). The five largest coffee shop chains on earth. The Richest. Retrieved
from http://www.therichest.com/business/companies-business/the-five-largest-coffee-shop-
chains-on-earth/?view=all
Tischler, Linda. (2014, December 1). It’s not about the donuts. Fast Company. Retrieved from
http://m.fastcompany.com/51444/its-not-about-doughnuts
Trefis. (2015, May 15). Why Starbucks has an edge over competitors despite rising coffee prices.
Nasdaq. Retrieved from http://m.nasdaq.com/article/why-starbucks-has-an-edge-over-
competitors-despite-rising-coffee-prices-cm358945
Van Tan, Robin. (2010, June 4.). Field of beans. QSR magazine. Retrieved from
http://www.qsrmagazine.com/executive-interviews/field-beans