Starbucks Going Global Fast There are many topics that arise throughout the case with Starbucks Corporation. Starbucks Coffee is located worldwide and there are many different ways to look at this situation. The company offers a unique range of coffee, lattes, espressos, and café style drinks. The company intended to reach a specific target audience, but has ended up in many different markets and has been growing rapidly. Starbucks has greatly used the “youth appeal” strategy to gain entrance into new markets. However, such enthusiasm cannot be counted on indefinitely; other strategies are always in the works. Over time Starbucks has been able to acquire a solid brand reputation and has a world renowned company logo. There have been some distinguished controllable and uncontrollable elements Starbucks has encountered when entering global markets. The strategies of any company’s goals are vital to its success. This is one area Starbucks has excelled in, just as McDonald’s has in recent years. Starbucks has paralleled its branding with the actions found at any Starbucks across the world. They have an excellent company vision, which they stick to, which in turn assists their brand image. Starbucks’ image has been achieved not only through this and their massive global entrance, but through their ability to provide honest quality service. In recent years there was a time that Starbucks saw the opportunity to go global and jumped on it. As far as this article goes, when looking at company weaknesses there is nothing that is of a serious concern for the business. If you look at Starbucks today you would see a much different perspective. The corporation started off using a benchmarking strategy trying to mimic what was done within other leading competitors. (Now Starbucks is the benchmark!) The company continues to work towards its long-term goal of becoming the most recognized and respected brand of coffee in the world. In one article I read, a spokesperson from Starbucks said they hoped to be the Q-Tip of the coffee business. There are a few risks facing the company. One of which Starbucks is already attacking and trying to overcome. The expansion of Starbucks is coinciding with one of the worst economic surges in history. It has become unaffordable for the average person to go to Starbucks for a coffee seeing that a coffee costs as much as a gallon of gas. If you drink one coffee a day for a week, that’s almost a tank of gas! This is why Starbucks is now offering a less expensive cup of coffee with a completely different label and all.
One critical obstacle for the Starbucks franchise is the over saturation of the market, they continued to build new businesses in local markets with out giving each the opportunity to solidify their customer base, some building as close as 2 blocks in large metropolitan areas. The economy could also have a direct impact on the Starbucks franchise. During times of prosperity and job security it is more comfortable to spend $2.10 on a 16 oz. cup of coffee than a $5.15 for a medium sized specialty coffee drink such as a Café Mocha or Carmel Macchiato. When the economy is down, the average consumer will cut
In 2002, unexpected findings of a market research showed problems regarding customer satisfaction and brand meaning for Starbucks customers. The situation was unacceptable for a company whose overall objective is to build the most recognized and respected brand in the world. Starbucks was supposed to represent a new and different place where any man would relax and enjoy quality time, alone or with others. But the market research showed that in the mind of the consumers, Starbucks brand is viewed as corporative, trying to expand endlessly and looking to make lots of money. This huge gap between customers' perception and Starbucks' values and goals called for immediate action.
The structure of Starbucks business communication is exceptional. Rather you are in their store buying a Caramel Frappuccino®, visiting their website or watching one of their advertisements on television; as the consumer, the message is loud and clear. Pick up any newspaper and you are likely to find an article about the coffee giant. Starbucks pledges a commitment to their over 172,000 partners (employees) and the community. “We realize our people are the cornerstone of our success, and we know that their ideas, commitment and connection to our customers are truly the essential elements in the Starbucks Experience” (Starbucks, 2008).
Everything became very difficult for the company. At the time, their coffee prices were shown as extremely ridiculous and their sales began to decline. Other companies took this as their time to join the coffee business and gave Starbucks a run for it’s money. As for the people buying their products, bloggers began discriminating against how Starbucks handled some things in their stores, like wasting water while washing their equipment. Since publicity relates to a lot of the company’s success, this took an even bigger toll on Howard’s decision-making process as CEO.
The threats facing Starbucks include trademark infringements and increased competition from local cafes and specialization of other coffeehouse chains, and the saturation of the markets in developed economies, and supply disruptions. Furthermore, the increasing prices of its inputs such as dairy products and coffee beans pose a threat
Social issues will always be a parto f major coporations however, Starbucks has shown through excellent leadership that they are ready to counter any attacks to their beliefs. They have mitigated the gun issue, the race issue, and signed the Fair Trade agreement. This stance on fair treatment and standing by their convictions has gotten Starbucks respect and new customers. Though many did not feel comfortable with the “Race Together” campaign, it was still a respected
...healthy environment, economy, or political state is left up to those who buy and distribute coffee. While the model that Starbucks follows to come by and sell their coffee may not be perfect it is at least a step in the right direction.
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.
...ore. The weakness for Starbucks is only Colombian coffee will distort the brand name. The opportunities are that Colombia has a growing middle class. The threats are being an American company the store can be targeted for terrorism, or Colombians will prefer a Colombian company to an American one. The weakness and threats outweigh the strengths and opportunities.
Starbucks started in 1971 as a single coffeehouse in Seattle. Today, it's the world biggest espresso retailer, with more than 19,000 areas in more than 60 nations. The staff, known as “accomplices” inside the Starbucks and “baristas” to people in general, offers more than two some espresso consistently and are at the heart of what Starbucks calls "the Starbucks Experience." Competitors would have financial specialists trust that Starbucks is offering barely unrivalled espresso at a preposterously high cost. In any case, Starbucks may contend this is a biased perspective of its business (O. C. Ferrell, 2012).
There is speculation that the company was pouring too much capital into its complex system of joint ventures and licensing agreements, and could not get a hold of its operational costs. They decided to source some of their merchandise and disposables to less expensive suppliers as an immediate cost-cutting measure. They also decided to cut back on the number of new stores and shut down unprofitable ones. Starbucks has had to learn the hard way that external forces go far beyond a society's taste in coffee, and that too much growth can have negative effects.
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
As with any company considering new products in new markets, there are risks associated with it, and Starbucks would need to be prepared to respond accordingly. With diversification, Starbucks will have the opportunity to increase its growth. Also, this strategy will permit the company to add related or unrelated products to its existing business. This will be the opportunity the company needs in order to expand its products, by offering new products to its customers. If Starbucks is considering diversifying, it’s essential to adopt a strategy that is fitting for the company....
Starbucks has identified high value opportunity in China, India, Brazil and Japan. The large expansion opportunity of twelve billion in China alone is enough to drive Starbucks to expand globally. The organization has planned to double its footprint to 3000 stores in China by 2019 ("Starbucks Details Five-Year Plan to Accelerate Profitable Growth", 2014). Starbucks realizes that eventually there will be a diminishing return on their existing market within the US due to market maturity and there are only two ways to expand through diversification in their offerings and entering new markets. Given the international opportunity for growth and expansive tea market in Asia, the company will enjoy the benefits of the growth opportunity. Management’s decision to continue to grow globally is a driving force that has yielded
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.