The new coffee industries face several problems internally and externally. The potential threat from new competitors due to low barriers to entry. The competition brings alteration in pricing strategies. The majority of coffee as raw materials comes from developing countries and the demand for coffee is higher in developed countries. The trade related restrictions and other related policies sometime hinders the import of coffee and emerges scarcity. The free entry and potential competitors reduces the profit margins of existing firms.Even political , social and geographical factors can adversely affects the productivity of coffee in developing countries.
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