Starbucks Financial Analysis

944 Words2 Pages
bulb-icon

Recommended: what are the key current issues starbucks is facing

Starbucks is known for their Frappuccino’s; unfortunately they are on a downward spiral in sales due to competitors such as McDonalds. In 2008 Starbucks admits to its losses due to their competitors. “Company executives now freely admit that such thinking is largely to blame for the woes that led to Tuesday’s announcement that Starbucks will close 600 U.S. stores and eliminate thousands of jobs. The coffee giant’s missteps have come at a spectacularly bad time, hitting as the economic slump deepens and consumers are seeing their discretionary spending eaten up by rising gas prices and grocery bills (Linn).”
Starbucks is going to continue losses unless they come up with a new marketing strategy to promote their products. There could be several reasons for why this is happening. However, the firm needs to take a step back and analyze the market. Starbucks must continue to research and produce new products to stay ahead in sales. Moreover, looking at today’s economy is should there should be a way to apply a different type and approach to their advertising.
Segmentation
When it comes to franchises such as Starbucks, one needs to evaluate the market. There are different brackets to which each is put in. For instance take McDonalds their marketing department is known to appeal to kids. Building play areas outside and inside with slides and play houses. Moreover, using a clown “Ronald McDonald” to attract youngsters is quite brilliant. This type of marketing is setting the bar for the next generation to keep customers for generations to come. Starbucks needs to take a step back and reevaluate their advertising market. There should be an analysis to see where the “Frappuccino” lost its appeal.
Target Marketing
Is the younger crowd th...

... middle of paper ...

...use. : Chapter 6: Consumer Decision Making. Retrieved April 30, 2014, from http://cacholajennifermar100.blogspot.com/2012/10/chapter-6-consumer-decision-making.html
Linn, A. (2008, July 2). Struggling Starbucks’ woes could get worse. msnbc.com. Retrieved May 1, 2014, from http://www.nbcnews.com/id/25498374/ns/business-us_business/t/struggling-starbucks-woes-could-get-worse/#.U2f-X1ehHlc
Farrell, R. O. (n.d.). Who Is Starbucks' Target Audience?. Small Business. Retrieved May 1, 2014, from http://smallbusiness.chron.com/starbucks-target-audience-10553.html
Starbucks. (n.d.). Forbes. Retrieved April 29, 2014, from http://www.forbes.com/companies/starbucks/
Wang, H. (2012, August 10). Five Things Starbucks Did to Get China Right. Forbes. Retrieved March 30, 2014, from http://www.forbes.com/sites/helenwang/2012/08/10/five-things-starbucks-did-to-get-china-right/

Show More
Related

  • Aunt Connie's Cookies Contribution Margin and Breakeven Analysis

    1489 Words  | 3 Pages

    Datamonitor. (January 2005). Starbucks Corporation. Retrieved September 22, 2006 from, http://www.investor.reuters.com from University of Phoenix Library.

    Read More

  • Case Study: Starbucks

    1774 Words  | 4 Pages

    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

    Read More

  • Starbucks Case Analysis

    1693 Words  | 4 Pages

    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.

    Read More

  • StarBucks Good Bad or Both

    630 Words  | 2 Pages

    In conclusion, Starbucks plans to be around for a long time. One would hope that the company does not enter into the gates of money over hell. This type of thinking and practice has never benefited any company or firm. Just ask WorldCom.

    Read More

  • Starbucks Coffee and Snack Industry Analysis

    1147 Words  | 3 Pages

    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

    Read More

  • Starbucks

    1328 Words  | 3 Pages

    The Starbucks case doesn’t mention many weaknesses. The main one, however, is their supply chain operations. This hasn’t caused any problems yet but they mention that handling four business units is becoming challenging. They have yet to come up with a long-term solution for such possible problems.

    Read More

  • Starbucks Case Study 2007

    1432 Words  | 3 Pages

    Business was good, but it was not without its problems. There was the political upheaval in the Middle East, followed by further tension after then CEO Howard Schultz commented on growing anti-Semitism in the region. Their integrity came under fire when certain Non-Governmental Organizations (NGO's) accused them of purchasing coffee beans under questionable social and economic conditions. These situations, together with difficult economic times globally, meant that Starbucks was likely going to take a hit somewhere. Eventually, they shut down their Israeli operations altogether.

    Read More

  • Starbucks: A business model for success now and in the future

    1470 Words  | 3 Pages

    Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.

    Read More

  • Starbucks Financial Analysis

    1484 Words  | 3 Pages

    Starbucks Financial Analysis Company Overview Starbucks is the world’s largest specialty coffee retailer, with more than 16,000 retail outlets in more than 35 countries. Starbucks owns more than 8,500 of its outlets, while licensees and franchisees operate more than 6,500 units worldwide, primarily in shopping centers and airports. The outlets offer coffee drinks and food items such as pastries and confections, as well as roasted beans, coffee accessories, teas and a line of compact discs. The company also owns the Seattle's Best Coffee and Torrefazione Italia coffee brands. In addition, Starbucks markets its coffee through grocery stores and licenses its brand for other food and beverage products.

    Read More

  • A Summary Of Starbucks: Cost Management Strategy

    1507 Words  | 4 Pages

    Starbucks has many business-level strategies, such as cost leadership strategy. Starbucks focused on increasing its profits and compete with other competitors (Starbucks,n.d). According to Starbucks (n.d), “a cost leadership business strategy focuses on gaining advantage by reducing its economic costs below all of its competitors. Although Starbucks targets product differentiation as their main business strategy, they have also implemented cost savings strategies in an effort to maximize profitability. An example of Starbucks cost saving strategy can be identified between 2007 and 2008 when their operational expenses increased by more than $125 million while sales for the same time period were beginning to dip. As outsourcing for distribution contributed to 70% of Starbucks operational expenses, they began targeting these outsourcing agreements for renegotiations in an effort to bring down costs.” Starbucks intended to reduce their

    Read More

  • Schultz's Case Study: A Brief Background Of Starbucks

    1431 Words  | 3 Pages

    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,

    Read More

  • Starbucks

    1009 Words  | 3 Pages

    The dilemma of Howard Schultz right now is what next?. Where does starbucks go from here? The available options in front of them are the following

    Read More

  • Starbucks Case Analysis

    1309 Words  | 3 Pages

    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.

    Read More

  • Starbucks Case Study

    1287 Words  | 3 Pages

    I will briefly summarize and examine issues facing Starbucks. Starting from there I will pick the most important issue and study it from different positions. In the end of my I will try to suggest what steps should be made to keep the company in continuing its quest to become one of the most recognized and respected brands in the world.

    Read More

  • Starbucks Quality Management Strategy

    1776 Words  | 4 Pages

    By remaining true to core competency and a laser like focus effort towards quality; Starbucks has managed to analyze, adapt and create brand loyalty to their particular market and remained the top competitor throughout the coffee industry. Americans in general enjoy a good, hot cup of coffee to start their day. In any given business, seeing a torrid cup of coffee in a cup from Starbucks is not uncommon. Starbucks is one of the most popular coffee franchises in the world with locations in 62 countries. Starbucks has been around since the year 1971where they started off as a coffee bean roaster and retailer. This research paper will briefly explores, examine, and assess Starbucks quality marketing and management strategy. Additionally, this research

    Read More

More about Starbucks Financial Analysis

Open Document