A competitive market is one in which a large numbers of producers compete with each other to satisfy the wants and needs of a large number of consumers. In a competitive market no single producer, or group of producers, and no single consumer, orgroup of consumers, can dictate how the market operates. Nor can they individually determine the price of goods and services, and how much will be exchanged. Competitive markets will form under certain conditions.The formation of competitive marketsFor markets to form a number of necessary conditions must be met, including:1. The profit motive.Free markets form when the profit motive can be satisfied....more2. The principle of diminishability.Stocks of pure private goods will diminish as the good is purchased. ....more3. The principle of rivalry.Consumers must compete with each other to get the benefitprovided bythe good or service...more4. The principle of excludability. For markets to form it is essential thatconsumers can be excluded fromgaining the benefit that comes from consumption. ....more5. The principle of rejectability. It is also necessary that consumers can reject goods if they do not want or need them....more

The diagnostic strategica Michael Porter of the industry in which the company operatesMichael Porter's strategic approach deepens the competitive dynamics of me-ronment and devise strategic maneuvers specific peculiarities of each company. In his view, the choice of a strategy depends primarily on the nature and intensity of competition that manifesto Square in the sector considered. Meanwhile, Porter defines generic strategies con-constitute the starting point in particular construction, original character, each firme.Modelul strategy is based on analysis of five factors exert their influence in the concurenialspecific each sector. Each factor and combination dome characterized in terms of activity niulintensity of competitionand, ultimately, determinesReturn sector- Measured by return on invested capital in the long term.

StarbucksCoffee Company is a global coffee company and a coffeehouse chain headquartered in Washington, the US and the company has generated a consolidated revenues of $14.9 billion during 2013 with more than 200,000 partners, referred to as employees (Starbucks Annual Report, 2013).

http://enjoystarbucks.blogspot.ro/2011/11/competitive-environment-of-starbucks.html

Rivalry among existing competitorsis high within the industry Starbucks operates in with major competitors like Costa, McDonalds, Caribou Coffee, and Dunkin Donuts and thousands of small local coffee shops and cafes.Starbuckscustomers possess large amount of bargaining powerbecause there is no and minimal switching cost for customers, and there is an abundance of offers available for them.Thethreat of substitute products and servicesfor Starbucks is substantial. Specifically, substitutes for Starbucks Coffee include tea, juices, soft drinks, water and energy drinks, whereas pubs and bars can be highlighted as substitute places for customers to meet someone and spend their times outside of home and work environments.Starbuckssuppliers have high bargaining powerdue to the fact that the demand for coffee is high in global level and coffee beans can be produced only in certain geographical areas. Moreover, the issues associated with African coffee producers being treated unfairly by multinational companies are being resolved with the efforts of various non-government organisations, and this is contributing to the increasing bargaining power of suppliers.However,the threat of new entrantsto the industryto compete with Starbucks is low, because the market is highly saturated and substantial amount of financial resources associated with buildings and properties are required in order to enter into the industry.

On the market most goods and services can be purchased from a number of companies, customers with multiple choice options. Companies must find competitive advantages to meet customer needs at a higher level from the competition. The question that be answered is "How to identify a company's competitive advantages given the high degree of competitiveness among companies in the market?", "How do companies sell the same products / services at different prices and with different degrees of success when there are a few products and unique services? "

Bowman Model explores the relationship between the price the customer is willing to pay and the value of the product / service perceived by the customer.This tool is a very useful model in understanding how firms competing companies on the market. By analyzing the different combinations of price and value can choose a position of competitive advantage, which is suitable for the entity. It is an effective way to establish and sustain a competitive position in a market economy. By understanding the eight basic strategic alternatives (shown below), a company is able to analyze, evaluate and adjust the current strategy and competitive position.

Alternative 1: Low Price & low valueThe alternative to opting companies whose products are not differentiated value. Firms choose not usually compete in this category. It is perceived as a "bargain basement". The only way to succeed in this position is by increasing sales volumes and by attracting new customers constantly. The products are inferior, but the prices are attractive enough to entice consumers to try them.