Environmental Factors and Marketing Decisions: Starbucks
Starbucks has wide range of business activity. These activities allow the company to use numerous channels of product distribution. With the company operating in many locations worldwide environmental factors play a major role in marketing decisions. Each distribution channel is affected differently and the company's flexibility in the marketing plan allows the company to adjust their strategies to meet the needs of the environmental factors.
Starbucks is known as the premier company of the finest coffee in the world. They purchase and roast high quality whole bean coffee, sells them with fresh, rich-brewed Italian style espresso beverages, pastries, confections and coffee-related accessories and equipment. Starbucks provides a work environment treating others with respect and dignity. The company embraces diversity as an essential component in the way Starbucks does business. Starbucks also applies the highest standards of excellence to the purchasing, roasting and fresh delivery of their coffee. Starbucks believes that the company should enthusiastically satisfied customers all the time and contribute positively to our communities and our environment and recognize that profitability is essential to our future success (Starbucks.com, 2008).
Over the past few decades, Starbucks has become a household name. Headquartered in Seattle, Washington, Starbucks is one of most lucrative coffee chains in the world. As of 2015, the company has chains in 50 countries with more than 22,500 stores in operation (Starbucks Corporation, 2017). The 70 stores located in Australia are focal point stores, which focus/tailor to improving the marketing strategy, customer service, and testing of new products to differentiate the company from the competition. Coffee is their primary business, so obtaining high-quality coffee beans from the nations that produce this product is important. Not only does the company sell hot coffee beverages, but they also offer a variety of cold drinks. The menu consists
Starbucks is a coffee company that began in 1971 in Seattle, Washington. They own more than 24,000 retail stores in 70 countries (“Starbucks Company”). They offer an array of products from coffee to handcrafted beverages to fresh food. Starbucks believes in being a responsible company while participating in ethical sourcing and environmental stewardship. The company is an active user with sharing information on social media platforms like Instagram, Twitter, Facebook. They are on Twitter with 11.8 million followers and also on Instagram with 12.5 million followers. Starbucks is doing exceptional with their marketing strategies when compared to the followers of other known coffee companies. For example, Dunkin’ Donuts has 57.8K followers on
Founded in 1971 at Seattle’s Pike Place Market, Starbucks Coffee, Tea and Spices, as it was originally called, has been “brewing-up” its famous blends in over 43 countries, including the United States. Now called Starbucks Coffee Company, business isn’t just about the coffee and tea anymore. Starbucks has its own line of bottled water, handcrafted beverages, fresh food, entertainment, merchandise and a Starbucks Card. The company has received numerous awards for their outstanding business practices. Fortune Magazine has ranked them as one of “The Best 100 Companies to Work For” in 1998, 2000, 2002, and 2008 (Starbucks, 2008). The Starbucks Experience provides consumers and the general public a direct line a of business communication. From friendly baristas to press releases from CEO Howard Schultz, Starbucks keeps its “partners” informed.
This strategic capitalises on weaknesses since will decrease the cost of coffee beans/beverages but also Starbucks operating cost which they regularly ship across the world to various stores. Starbucks can capitalise on this weakness to improve their brand options. It adds value in the inbound logistics activities, operations and procurements. Starbucks should consider this option since it will decrease their operating cost and therefore will reduce the prices on their menu. The attractiveness is the exact same as mentioned in option 1.
The key to its success lies not only in the quality of its products but also the ability to differentiate itself from the competition. With Starbucks, it has always been about quality. The company manages stringent quality control measures for sourcing the finest coffee beans, roasting processes as well as customer service and ancillary products. Furthermore, differentiation is key to market control and Starbucks is unquestioningly the most differentiated specialized coffee brands in the world. From the design of its coffee shops to the music played to the types of products offered, everything has a touch of uniqueness.
The importance of economic indicators to the strategic planning process in any organization is the ability to benchmark economic conditions that contribute to improve profitability, business growth and market size. Leadership sets up the mission “to establish Starbucks as the most recognized and respected brand in the world.” In doing so, they have created a set of industry-leading, comprehensive coffee-buying guidelines addressing coffee quality, financial transparency, social and environmental responsibility. Starbucks strategy is also expanding market in globally to provide high quality coffee in convenient and visibility locations. They are continuing to innovate and extend the business with imaginative new ready-to-drink beverages and expanded packaged coffee offerings (Starbucks Corporation, 2007).
Starbucks not only shapes a defined importance on its product, the coffee, but also the relationships on its partners, its customers and its shareholders to create diversity, “to create a place where each of us can be ourselves” (Starbucks Coffee), to treat all related partners with dignity and respect at the greatest corporate level. In this sense, Starbucks involves its customers, its neighbors and is shareholders to participate in the community to “be a force for positive action—bringing together [its] partners, customers, and the community to contribute every day (Starbucks Coffee).
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
... middle of paper ... ... Strategic planning kit for dummies, 2nd edition. Retrieved from http://www.dummies.com/how-to/content/strategic-planning-diversification.html “Starbucks”.
Everything centers on the organizational culture within Starbucks. While being a customer service-based company and understanding that the customer satisfaction and loyalty are what will make the company profitable, Starbucks takes a different approach to customer service than other companies. By hiring employees that fit in the organizational culture (ICFAI, 2005) and treating their employees well (Lefevere, n.d.), Starbucks brings in and retains customers through their happy employees. The qualities that Starbucks hires for are "adaptability, dependability and the ability to work in a team" (ICFAI, 2005). The culture is supportive and laid back (Montana, 2005). Howard Shultz, Starbucks president and CEO, has the theory "that if you treat your employees well, they will treat your customers well" (Starbucks, 1997).
Every company global or domestic has external factors that exist that eventually have an effect on the company’s operations. Some of these external factors can be controlled but a larger portion is uncontrollable and yet they can be managed and or influenced by the company. These specific factors make up the marketing environment in which a company has environmental factors that influence the company’s decisions. In this paper, the author will explore the domestic and global environmental factors that could have an impact on FedEx’s marketing decision. The five environmental factors that the author will be discussing are social, economical, technological, competitive, and regulatory.
"Rewarding everyday moments". The Starbucks Mantra clearly implies that they are not selling just coffee. They claim to be selling the coffee experience. Their coffee bars that sell specialty coffee also gives customers an ambience where they can be themselves. Starbucks advertises themselves as the third place between home and office, where you can escape, reflect, read, chat or listen. They have become the largest player in the coffee industry and is still looking for avenues to expand themselves.
In addition to being best-known supplier of the finest coffee and promising only the highest quality products, Starbucks emphasizes firm values, provides guidelines to enhance employee self-esteem. This is to ensure continued customer satisfaction. Moreover, diversity has become a priority to providing an inviting environment to all consumers. Starbucks continues to abide by a strict, slow growth policy in which they set out to dominate a market before moving on to expand, thus history has shown this strategy to be successful for Starbucks, making them one the fastest growing companies nationwide.
With clear core values towards providing quality coffee, the best service, and atmosphere, Starbucks has enjoyed great success since it was founded 30 years ago. The company has being doing very well for last 11 years with 5% or more store sales increase, even with the rest economy still reeling from the post-9/11 recession. However recent research, conducted to Starbucks, have showed some concerns regarding company’s problem meeting customers’ expectations.