Starbucks Strategy and Environment
Introduction
With the development of economic globalization, “fast food” becomes a more and more substantial industry in the business world, which adapts to the pace of people’s life. Each organization spares every effort to stand forward the competition due to the fierce competition. In this article, we focus on the “Starbucks”, a prevailing coffee manufacturer in recent years.
In 1971, a coffee bean retailing store named Starbucks was opened by Jerry Baldwin, Zev Siegl and Gordon Bowker in order to sell specialty whole-bean coffee in Seattle. And the name "Starbucks" was from mate Starbuck in the novel Moby Dick. In the decade, Starbucks had five stores and a small roasting facility in Seattle till 1981. In 1982, Schultz joined Starbucks as marketing manager. In 2001, Interbrand (a brand management consultancy) had named Starbucks as one of the 75 global brands of the 21st century. In 2002, Starbucks had 5689 outlets in 28 countries. By early 2006, Starbucks had more 11,000 stores around the world. Starbucks had turned coffee from a commodity into an experience to savor. (Business Management Updates and Resources [online])
Starbucks has been struggling amidst a faltering economy, its own rapid growth (international expansion and growing presence in 43 countries) and increased competition from cheaper rivals. Starbucks wants to turnaround its business by providing customers with the distinctive Starbucks Experience and building on Starbucks legacy of innovation. (Business Management Updates and Resources [online])
Strategic Issues
To the drinking industry, the soul of keeping the brand forever is the “experience”, rather than the “flavor”, which means a lot to every corporation. “The...
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... strategies and environmental analysis, there always been a long distance for Starbucks to go.
Reference
Business Management Updates and Resources, 2008. Will restructuring help Starbucks Turnaround? Available at: http://industryweek.blogspot.com/ (Accessed:1st March 2008)
Ball, DA, McCulloch, WH, Frantz, PL, Geringer, JM & Minor, MS (2001) International business: The challenge of global competition, 8th Edition, McGraw-Hill/Irwin
De la Torre, J, Doz, Y & Devinney, T (2000) Managing the Global Corporation, 2nd Edition, New York: McGraw-Hill
Johnson, G & Scholes, K (2002) Exploring Corporate Strategy Text and Cases, 6th Edition
Starbucks Coffee Company, 2007. Starbucks Launches New Warm Food Offerings in New York Metro Area. Available at: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/10-02-2006/0004443111&EDATE=(Accessed:1st March 2008)
Starbucks Corporation is one of the world's largest coffee roaster, marketer, and retailer of coffee. In 1971, three entrepreneurs, Jordan Bowker, Zev Siegel, and Jerry Baldwin opened first Starbucks store in Seattle, WA. In 1982, Howard Schultz joined Starbucks as a marketing director. He came up with the idea to make Starbucks a coffee house chain but Starbucks founders rejected the idea and he left the company in 1985. Later, Schultz started his own coffee bar named “Il Giornale”. In a couple of years, he was able to buy Starbucks Corp. from its original owners. He renamed his coffee bars "Il Giornale" as Starbucks. In 1987, Starbucks opened its first store outside the Seattle in Vancouver and Chicago. In 1996, Starbucks opened its first international store in Tokyo, Japan. [1,2]
Starbucks was created in in 1971 when Jerry Baldwin, Zev Siegel, and Gordon Bowher decided to open the first store in Seattle. The trio opened the first store in Pikes Place, which was a popular market area in Seattle. In the beginning the customers were encouraged to learn how to grind beans and make their own freshly brewed coffee at home. At that time the store did not offer fresh-brewed coffee sold by the cup like today, they sold beans and coffee makers. Starbucks was actually named after the first mate
The book revealed why Starbucks is one of the fastest-growing companies in recent years. Starbucks ' story is endlessly fascinating because of the unusual way the company has built a global chain and a global brand, explains Joseph Michelli, a Colorado Springs, Colorado, consultant and author of The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary. Moe, CEO of ThinkEquity Partners in San Francisco and author of Finding the Next Starbucks: How to Identify and Invest in the Hot Stocks of Tomorrow, says Starbucks ' early leaders were also distinguished by their exceptionally highflying entrepreneurial visions. "What Starbucks does magnificently well is treat employees not as pawns, but as partners," says John Moore, an Austin, Texas, marketing consultant, former Starbucks marketer and author of Tribal Knowledge: Business Wisdom Brewed From the Grounds of
In order for Starbucks to come back from the problems which they obtained in 2008, the company needs to strategically place new locations, bring back to coffee house experience that customers expect, as well as limit the product offerings which they currently offer. If the company could implement these changes, then Starbucks could bring back the original vision of offering a quality experience to the people that matter most to them; their customers.
Starbucks would emphasize their core values rather than focusing growing their franchises. According to Harrington (2011), the transformation agenda allowed Starbucks to fight for its life without losing its soul”. The transformation agenda also allow Starbucks to reduce the global amount of franchises from over 2000 speculated locations to less than 900. The reduction in franchise provided Starbucks with adequate resources to focus on innovative approaches to increase productivity and employee satisfaction. This will further allow each location to have enough proper resources to really
Shah, A. J., Hawk, T. F., & A, T. A. (2011). Starbucks' Global Quest in 2006: Is the Best Yet to Come. In A. A. Marcus, Management Strategy: Achieving Sustained Competitive Advantage (pp. c468-c495). New York: McGraw-Hill.
Schultz, H. (2011). Onward: How Starbucks fought for its life without losing its soul. New York: Rodale.
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.
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
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).
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.
One of the main problems that Starbucks is facing at the present time is the ability to maintain national competitive advantage (Monash South Africa, 2014). Due to their local demand conditions, Starbucks tries to satisfy all customers by trying “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks Corporation, 2014). Local demand conditons consist of a company trying satisfy needs of their closest customers and expanding their competitive advantage by upgrading their strategic management policies (Monash South Africa, 2014).
Opportunities available to Starbucks include growth of its supplier range, expansion to emerging economies, increased diversification of its product offerings and the growth of its retail operations; which are aimed at growing Starbucks’ profitability and market presence.
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...
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,