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Business-level strategy of Starbucks
Business-level strategy of Starbucks
The growth of starbucks
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When people think coffee shop, the first name that pops into their head is usually Starbucks. Pike Place Market, located in downtown Seattle, is home to the first Starbucks. The doors to this coffee house were opened in 1971 by three graduates of the University of San Francisco. The establishment was later bought by Howard Schultz in 1987. His vision was to bring an Italian like coffee house to the United States. There are now currently more than 18,000 Starbucks stores, in over 62 countries. The average price for a specialty coffee is five dollars a cup, most would say this is an outrageous price to pay, yet millions of people pay the price daily. There are many factors to why this business became so successful despite its high prices. Location being one of those factors. Starting from a small coffee shop in downtown Seattle, there are now currently numerous Starbucks locations in every major city. Airports, shopping malls, and Target stores often have Starbucks located within. The company has now expanded to Africa, South America, Asia, Europe, North America, Central America,Caribbean, and many more countries across the globe. The more locations they have, the more people see there iconic logo, and swarm in for the morning cup of joe. Starbucks is not just pouring up any regular cup of coffee. They purchase and roast only high quality coffee beans hand picked from Latin America, Africa, and Asia-Pacific. Starbucks just this year purchased its own coffee farm, thus allowing them to experiment and in the future produce new bold flavors of coffee. Over the years the company has found ways to become Eco-Friendly. They have recycling units in their stores. They also produce numerous styles of coffee tumblers for sale, in hopes ... ... middle of paper ... ... pantry at Jefferson Edison Elementary School, in Davenport, Iowa on November 23, 2013. Many people do not realize that Starbucks company is involved in their community. The once small coffee house in Seattle, Washington has now turned into the most prominent coffee company in the world. Some people would say a trip to Starbucks is a treat, others it has become a daily ritual. It was able to grow into such a successful company because of the experience they made for each customer that walked through their doors. Offering a variety of high quality coffees to people all over the world and giving them the home away from home atmosphere. By staying true to their company mission statement, “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”, they were able to stand out more then any other company, and ultimately reach success.
Before Starbucks became a prominent coffee company with 27,339 locations around the world, it was a tiny shop selling premium roasted coffee beans in Seattle, Washington. Three university professors from San Francisco began their journey at 1912 Pike Place, a miniature building located in the Pike Place Market. They derived the
Visit Starbucks.com and you enter a virtual world of delight. Consumers can “sample” over 30 blends of coffee; find Starbucks coffeehouse locations, or learn about Starbucks Hear Music®, where customers can “burn personalized CDs, use listening stations to explore musical recommendations, enjoy a handcrafted Starbucks® beverage, or surf the web at (a) T-Mobile Wi-Fi enabled coffee bar” (Starbucks, 2008). Starbucks uses their website to communicate with their consumers about their company’s mission, social responsibility, business ethnic and compliance, diversity relations and press releases. Consumers can even read about the latest “rumor responses” that Starbucks wants to clarify about misinformation regarding the company. From the “click” of a button you can shop for Starbucks merchandise or check the balance on your Starbucks Card, the Starbucks website has got their customers needs in mind.
Every customer that is served is treated with utmost respect, while an equal care is given to the coffee and other merchandise – providing the recipient with superior quality the first time or they will gladly remake it. When customers enter the establishment they are welcomed with comfy chairs and a cozy, “nestled-at-home” feel – keeping the barren walls and cold atmosphere for other businesses. This environment yearns to be a place of unity – bringing people together, a study room for the burned out college student, or even a place to read the paper before work. Whatsoever the necessities may be, Starbucks provides the answer. For instance, for every bottle of Ethos Water that is sold, five cents is donated to the Ethos Water Fund to provide clean water to children who are unable to access it themselves. This fund has helped more than 500,000 people across the globe obtain clean water, hygiene and sanitation (Ethos Water Fund). Clearly, Starbucks believes in the necessity of humanity.
Starbucks and Dunkin' Donuts offer coffee that is easy to reach. Both of the brands have a lot of stores world-wide. Some of their stores work 24/7, and have drive-through
A Starbucks experience starts as soon as a prospective customer walks in through the front glass door. Starbucks takes pride in posting a sign to the glass window, next to their doors, which reads “Starbucks is a smoke-free environment”. It automatically gives it a warm atmosphere to those who wish to bring children and elderly. Since, Starbucks is a huge fan of the winter holidays, on any given day in December, customers are bound to witness holiday spirited décor all over the locality. The glass doors, windows, and light blue dark green walls are decorated with white leaves and snow crystals all across. Generally speaking, Starbucks locations have a bulletin board on one wall filled with posters of community involvement. Starbucks’ Shared Planet motto is imprinted to the black chalk board. It entails a commitment to the coffee and community it serves. It reads the following: It’s our COMMITMENT to...
Schultz, Howard, and Joanne Gordon. Onward: How Starbucks Fought for Its Life Without Losing Its Soul. New York: Rodale, 2011. N. pag. Print.
With that store being there to help support new stores that would be entering the region. The goal was to have around 20 stores after two years of entering a market and have those stores expand even further into smaller cities and suburban locations. They also started to add drive-through because it made it more convenient for parents with small children. Some of the drawbacks of drive-through were that it took away from impulse buys and sometimes created bottlenecks in the line. Licensing the brand was also a great way that they expanded their business; by putting Starbucks in airports in malls they create a lot of foot traffic lead to successful stores. Starbucks carefully considered their image and the image they wanted to uphold when choosing licensees. The international market is now where Starbucks has the most potential to grow. As of right now Starbucks has plans to open 1,400 new stores in China. That’s more than half of the store it already has in China. The growth technique that I was most impressed with was that having two locations so close to each other would not saturate the market. The first store would see a drop in sales at first but would bounce back and the new store would grow. I notice we have that here, at Target in uptown you can actually see the Starbucks across the street while you are in line. Both seem pretty busy most of the time too.
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 mission statement states: “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” The corporation focus on the local communities and takes a proactive strategy to be a part of their lives. According to the Starbucks’ principles, every single store is a part of a community and it is a responsibility to live in a good relations with everyone. Instead of looking for an opportunities to expand in the most profitable places, it would rather be invited to do business in particular areas. Also, the company principle states that the business can take the lead in changing and helping in improving the society around. It is going to be a force pushing everyone ahead.
At this time Starbucks counts approx. 165 cafes. On March 7th, 2001 Starbucks eventually moved to Europe and opened their first cafe in the Old World: Zurich, Switzerland. Today, the company has more than 16,000 cafes in more than 35 countries. Wilson.
"Whatever your culture, your values, your guiding principles, you have to take steps to inculcate them in the organization early in its life so that they can guide every decision, every hire, every strategic objective you set” (Schultz & Yang, 2007). That’s exactly what Howard Schultz, CEO of Starbucks, did when he first started with the company in 1982 (“Our Heritage,” 2011). The company’s solid business model of providing more than just a cup of coffee allowed it to flourish for over two decades. Then in 2008, Starbucks’ stock had plummeted and the company’s aggressive growth strategy led to the commoditization of this popular coffeehouse and its products. When Schultz saw this company become a diluted version of what he dreamed it would be, he decided to step up again as CEO (Koehn et al., 2008). Starbucks successfully developed and implemented a strategic plan to recreate the intimate coffee shop feeling.
Starbucks is a worldwide coffee house series founded in the United States. Starbucks is one of the biggest coffee house company in the world with more than thirteen thousand stores situated in the US and more than twenty thousand stores in 62 countries.
Starbucks is an international coffee house and it was created in 1971 when they opened the first store in Seattle, Newcastle. Currently, they own 21,000 stores in 65 different countries of the world, and their passion for the great coffee, excellent service and community interaction exceeds cultures and languages (Starbucks, 2014). This company is the number 1 brand coffeehouse chain in the world due to the best roaster, marketer and seller of speciality coffee. Its main slogan: “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time” (Jurevicius, 2013).
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.
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.