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Starbucks: Strategy Analysis and Choices
Starbucks: Strategy Analysis and Choices
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Starbucks - a synonym of luxury at an affordable price, a café known around the world for years.
Starbucks earned its position at a much smaller budget than other big brands. History of the
company, its expansion and marketing strategy can be a role model for other companies.
It all started 43 years ago, from one tiny shop in Seattle. Today, it is still growing empire with
thousands of outlets around the world. It's a huge incentive for small businesses to never stop
development, simply because a good plan can achieve real success.
Many business schools examine and analyze Sturbucks marketing strategies, trying to find an
answer to why these and not other techniques worked for the brand.
In 2008, after the financial crisis that has affected Starbucks, president of the company decided on a
radical and shocking step ,He closed all the cafes around the world for one day to train staff in 7100
stores.
This resulted in a loss of several million dollars.
For Schultz, Starbucks is not just a business. Of course, ultimately profitability of the company
is important, but there are also non-material values.
Café according to the tradition and culture of Starbucks is to be a place where people meet , come to
relax , read a book or work with a cup of coffee.
Important are accompanying emotions. Schultz says that for him the Starbucks brand is something
that he loves.
Howard Schultz is not afraid to make difficult and controversial decisions that could result in a
disaster , because he realized that the recipe for victory is a change of strategy combined with great
courage to innovate .
The most important was the adoption of a new perspective , a new point of view.
He wanted with all his strength to res...
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...ite visitors are encouraged to discuss and exchange experiences with the owners, and the
company is trying to "personally" take an active part in these discussions, giving the feeling that it
is the brand who cares for each client and its needs.
For years, Starbucks is known for its creativity and innovative ideas added to their products or
services.
They added more variety of flavors to their coffee, more interesting menu choices and be the first to
propose the possibility of using the Internet in their stores.
Is Stabucks the best coffee in the world? I do not know, but it certainly offers exceptional service
and organizes and engages in interesting social activities successfully for many years. So let's
observe on the actions of the brand and benefit from free sources of marketing inspiration.
Maybe one of them we can apply to our operations.
Starbucks is a premium coffee retailer, which started in 1971. It is established in 70 countries all over the world. Starbucks has revolutionized the coffee market by selling expensive and high quality coffee. It has marketed itself as a third place between home and work. They select the locations in such a way that Starbucks is on their way to work and while coming back home from work.
Great quality products, customized, served in clean, convenient placed stores for everyday coffee, friendly and fast serving, everything in a pleasant atmosphere - these were just few factors that lead to the great success of Starbucks during the nineties. Their USP was a place where every American could escape from home or work, for a coffee drinking ritual; high quality coffee, according to each customer's taste, served in a special, intimate ambience. Their image was supposed to appeal to anyone, being based on the idea of community, "exploiting" the need of people to interact with each other, in a "third place", away from home or work.
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.
So what makes Starbucks stand out amongst them? In his book Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time, Schultz recalled his business trip to Milan in 1983, where he discovered the “coffeehouse culture”. In Italian coffee houses, baristas knew their customers by name, and had casual conversations with them while customers mingled standing on their feet as there were no chairs. This business trip then inspired Schultz to carry out the similar transformation to Starbucks – to make the coffee house a second home to customers. At Starbucks, the working
When the 1980’s rolled around, it was a thriving company, in the Seattle area. However, the co-founders began to have other interests and were involved in other careers simultaneously. Despite that, the company was about to undergo a major turnaround. A man by the name of Howard Schultz started to pursue an interest in the company. He noticed that the coffee shop had a wonderful environment.
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.
In today’s retail business market, Starbucks is one of the largest coffee companies in the world. In the early 70s, Starbucks opened their first store in Seattle. Over 30 years later, their company has massively expanded opening over 7,000 stores in the United States and internationally. Starbucks is definitely a favorite in today’s coffee market due to their popularity and success. They view themselves as a business that has premium coffee in the world while striving to maintain consistent success as they grow into the future. Starbucks has also expanded their business by expanding their products through Breyer’s ice cream and having their very own card, which customers can purchase and pre-load.
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.
“Starbucks was named after Starbuck, first mate of the whaleship Pequod in Herman Melville’s Moby Dick…Starbuck was pluralized for ease of use” (Burks, 2009, p. 1). Now President, Chairman, and Chief Executive Officer, Howard Schultz formed Starbucks Corporation in 1987 after purchasing the name Starbucks, six stores and a roasting plant from previous owners, Jerry Baldwin and Gordon Bowker (Burks, 2009). Starbucks operates under a successful value chain management strategy. Their value chain encompasses a systematic approach to the way business is done. Robbins and Coulter (2012) point out, “A good value chain involves a sequence of participants working together as a team, each adding some component of value” (p. 520). Starbucks continually reviews every aspect of their business; from the organizational culture to values and ethics to strategy, planning and operations, management control and finally human resources and performance management, searching for those items that don’t contribute to the “Starbucks experience” which is what makes the Starbucks Corporation a successful business model.
Starbucks is a worldwide company, known for is delicious brews of coffee and seasonal varieties of tasty drinks for any occasion. Starbucks opened with two main goals, sharing great coffee with friends and to help make the world a little better. It originated in the historic Pike Place Market of Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker. The creation of Starbucks’ name came from the seafaring tradition of early coffee traders and the romance evoked from Moby Dick. At the time, this individual shop specialized in the towering quality of coffee over competitors and other brewing services enabling its growth to becoming the largest coffee chain in Washington with numerous locations. In the early 1980s, the current CEO Schultz saw an opportunity for growth in the niche market. After a trip to Italy he brought back the idea of a café style environment of leisure and social meetings to the United States we now see in Starbucks locations today. Schultz ultimately left Starbucks to open his own coffee shop, Il Giornale which turned out to be a tremendous success. Fast forward a year later, Schultz got wind that Starbucks was going to sell all their components of Starbucks including their stores and factories, he immediately acquired the funds to buy Starbucks and linked both operations. Within five years he was able to open more than 125 stores starting in New England, Boston, Chicago, and gradually entered California. He wanted Starbucks to be a franchise system based on the mission of telling the truth and emphasize the quality,
Starbucks Company was established in 1971 with their first store in Western Avenue from that same year to 1976. They started as retailers of ground coffee tea and spices with a single in Seattle’s historic Pike Place Market. Starbucks is named after the first mate in Herman Melville’s Moby Dick and their logo is inspired by the sea-featuring a twin-tailed siren from Greek mythology. Starbucks had always wanted to inspire the human spirit. They believe in serving the best coffee by growing the coffee under quality standards. Starbucks believes rendering good services to customers is very significant to the success of the company. From just a narrow storefront, Starbucks now has more than 20,000 stores in over 60 countries and they offer some of the world’s finest fresh-roasted whole bean coffees. Their coffee houses have become a beacon for coffee lovers everywhere. Starbucks believe that they can elevate their customers, partners, suppliers and neighbours to create positive change. They call their corporate offices “a support centre” for some reasons. They try to make everything they do there to support their retail store partners and make an impact on the communities they serve. They have a research and development team of over 200 people which are responsible for the science behind their great products. They are the innovators of delicious beverages and brewing equipments. They drive the innovations, conduct the research and test products. They have a public affairs, communications and community team of over 50 people who promotes and protects the company’s reputation all around the world. They also have a partner resources team of over 500 people that help their partners all around the world become their very best...
For those of you who do not know about Starbucks, Starbucks is an American franchise business that has been established since 1971 and currently has spread in around 75 countries around the world. And unlike most cafes or restaurants, Starbucks offers a concept that will provide an amazing experience. Some people may think that starbucks is just an ordinary cafe that offer coffee as a mainstay menu. They think that basically all restaurants will always have the same concept even though they have different menu.
"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.
As we know, Starbucks has made a name for itself making and selling coffee and specialty coffee drinks. It has made its biggest impression by becoming the espresso expert and public educator of how to make the perfect espresso; "Roasters" of the company are trained for one year.
The strategic vision that Howard Schultz had for Starbucks was "Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow". This s...