ANALYSIS OF COFFEE SHOP OPERATIONS USING PORTER’S FIVE COMPETITIVE FORCES MODEL
Abstract
This study analyzes the competitive forces affecting the operations and performance of independent coffee shops in Alaminos City and Sual, Pangasinan, using Porter’s Five Competitive Forces Model. While prior studies have applied this framework in large urban markets, there remains limited empirical evidence on how these forces influence smaller, provincial-based coffee enterprises. The study addresses this gap by investigating owners’ and managers’ perceptions of competitive rivalry, threat of substitutes, threat of new entrants, and the bargaining power of suppliers and customers, and determining how these forces relate to business performance.
A descriptive–correlational research design was employed, with data gathered through a validated survey questionnaire administered to 22 purposively selected independent coffee shop respondents in the study area. Spearman’s Rho Correlation was used to measure associations between competitive forces and business practices. Ethical standards were observed by securing informed consent, ensuring voluntary participation, and maintaining confidentiality of responses.
Findings revealed strong competitive rivalry driven by the increasing number of cafés and evolving café culture. The bargaining power of customers and threat of substitutes were moderately high, while supplier power exerted a moderate influence on pricing and sourcing. Independent shops employed various strategic responses such as service differentiation, ambiance creation, customer engagement, value-added amenities, and digital marketing. A significant positive correlation was found between competitive forces and business performance, indicating that strategic awareness and adaptive practices strengthen operational resilience and customer retention. The study recommends enhancing product uniqueness, service quality, supplier diversification, and digital engagement to sustain competitiveness and long-term viability.
