Schultz's Case Study: A Brief Background Of Starbucks

argumentative Essay
1431 words
1431 words

Brief Background:
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, …show more content…

In this essay, the author

  • Explains that starbucks originated in the historic pike place market of seattle in 1971 by jerry baldwin, zev siegl, and gordon bowker.
  • Explains that starbucks' success is due to their ability to address internal and external factors. the certs framework helps indicate the most important influential factors and characteristics in the macro-environment.
  • Explains that starbucks has 26.48% of the total market share, making it the industry leader over mcdonalds, peets and other coffee beverage producers. there is a moderate threat of new entrants into the existing market place.
  • Explains that economic forces are extremely important in order to improve profitability, future business growth, and increase market place. starbucks has laid out the coffee-buying guidelines, while being social and environmentally responsible.
  • Explains that starbucks faced declining sales due to economic downturn and consumers shifted their tastes towards cheaper, more affordable products.
  • Analyzes how the increase in technology in today's generation has positively affected starbucks' customer satisfaction levels. the "starbucks app" allows customers to order specialized drinks, create new drinks or accumulate points towards a free drink.
  • Explains that starbucks uses the marketing mix to develop business growth and consumer engagement. they offer a variety of products to capture more of the market and customer needs while attracting new customer base.
  • Recommends that starbucks acknowledge the increase of home usage of coffee makers by creating more home brew products or lines such as roasting machines.
  • Cites zacks investment research's starbucks corporation (sbux) forecast earnings growth.

The CERTS framework helps indicate the most important influential factors and characteristics Starbucks encounters in the macro-environment. It is easier for Starbucks to gain insights on the environment and overcome negative impacts through CERTS.

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