Schultz's Case Study: A Brief Background Of Starbucks
argumentative Essay
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,
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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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- Mission & Strategy: Starbucks's Mission And Strategyexplanatory essayAbstract Starbucks started out in a “single store in Seattle’s historic Pike Place Market” (Starbucks, 2017, p. 2). Starbucks only offered fresh roasted whole bean coffees and dark roasted in small bags. In 1981, Howard Schultz stepped into his first Starbucks and had his first drink (Starbucks, 2017). Howard ended up becoming the chairman and CEO for Starbucks.
In this essay, the author
- Explains that starbucks started out as a single store in seattle's historic pike place market. howard schultz became the chairman and ceo of starbucks in 1981.
- Explains that starbucks' mission is to inspire and nurture the human spirit — one person, one cup, and one neighborhood at a time.
- Explains the importance of delivering our very best in all we do, holding ourselves accountable for results.
- Explains that corporate expects every one of their works to follow these 6 core principles and if they do, they think their customers will be happier.
- Explains the fixed-charge coverage ratio, debt/equity ratio and operating margin ratio.
- Explains that starbucks has many strengths, including a strong brand name and an extensive global supply chain.
- Explains that starbucks' products are sold at a higher price than other coffee chains. starbuck's major revenue comes from business in america.
- Opines that starbucks should expand its business into asia and africa to increase sales and increase the amount of consumer products available at local stores, such as coffee beans and keurig cups.
- Explains that one of the greatest threats to starbuck's business is the competition from other businesses that sell coffee for a more affordable price.
- Opines that starbucks needs to focus on expanding globally. africa has the most potential for growth and expansion.
- Opines that starbucks has a lot of success and is one of the world’s leading coffee makers and sellers, but there is room to grow with their industry and strive to be the best coffee maker.
- Cites baertlein, l., starbucks curbs 2017 revenue forecast after u.s. store visits drop.
1312 wordsRead More - Starbucks SWOT Analysisopinion essayInspired by the book and the movie about Moby Dick, Starbucks first opened as a storefront in Pike Place Market in 1971. It wasn’t until 1984 when Howard Schultz joined the operation as a chairman, president, and chief executive officer, and introduced to Starbucks the new Italian breed of coffee bean and Italian style of coffee drinking; a style that refreshed the idea of socializing and interacting among people of all walks in times that corporate life style was winning over the family and friendly style of living. Such goal was established by officially making it company’s mission statement; “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks, n.d). After 43 years of business, Starbucks currently operates in 18,000 locations in sixty-two countries (Starbucks, n.d). The annual report released by the company for the year 2013 indicates a total sales/revenue of 14.89 billion dollars, which was 1.5 billion dollars made in 2012 (MarketWatch, 2014).
In this essay, the author
- Explains how starbucks was inspired by the book and movie about moby dick. howard schultz introduced the new italian coffee bean and italian style of coffee drinking.
- Opines that starbucks is taking a route that is causing the brand to lose its well-known image of friendly coffee house.
- Explains that starbucks refocused its attention on coffee in 2009, and introduced via instant coffee to steal back the market that was once theirs from the competitors such as panera bread.
- Explains that branding a new product is not as easy as placing it on the shelves and hope for the consumers to buy it. a strong marketing team is required for affective branding, as they understand the issues while doing so.
- Opines that starbucks has done a good job for packaging their instant coffee.
- Opines that starbucks must increase its advertising budget and increase the use of the media to counter the said problems.
- Explains that the key issue starbucks via faces is the negative image already engraved in consumer’s mind by other brands of instant coffee.
- Explains that there are many solutions to brand via now that the key issues have been identified. the company must try to lower the price by cutting unnecessary overheads such as excessive advertisements.
- Explains that starbucks has done a great job with the current packaging, but it's flawed. the most effective packaging is the one that advertises the product until the end of its consumption.
- Recommends a few starbucks via cups with each package sold to keep the overhead cost moderately low. they also recommend giving customers the option to purchase additional cups for $0.10.
- Explains that via brand will be starbucks minus the baristas-and the brewing.
- Explains starbucks' mission statement, which can be found at http://www.starbucks.com/about-us/company-information/mission-statement.
1431 wordsRead More - Case Study: Target Market For Starbucksexplanatory essayStarbucks, a coffee bean sales company did not have much of a marketing plan in place at its inception. Based in Seattle Washington the company began to sell coffee beans to espresso bars and upscale restaurants back in 1982. It took 11 years to progress to that level of production, they originally were a local store vendor at Pike Place Market. The director of marketing brought back the espresso bar idea from his travels in Milan. (Company Profile, 2015) The Pacific Northwest was filled with working class men and women that were drawn to the coffeehouse tradition brought in from Italy.
In this essay, the author
- Describes a useful aid for organizing information utilizing its strengths, weaknesses, opportunities, and threats.
- Explains that product recalls have hurt the starbucks brand as recently as 2015. specialization is a strength, but diversification and marketing products are weakness.
- Explains that product diversification has allowed starbucks to repackage their products and distribute it as a home product. the opportunity for continued expansion is present.
- Explains miller, r. k., food and beverage market research handbook. coffee shops.
- Explains william d. perreault, j. j, essential of marketing, a marketing strategy planning approach.
- Explains that starbucks didn't have a marketing plan in place at its inception. the company began selling coffee beans to espresso bars and upscale restaurants in 1982.
- Explains that starbucks' primary business is that of selling high-premium coffee. specialization allows them to deliver great quality and maintain their customer base. involving technology with their market structure.
- Opines that a marketing team along with data and analytics is essential to comprising the new product.
903 wordsRead More - Analysis Of The Starbucks Experience By Joseph Michelliexplanatory essayIn “ The Starbucks Experience” author discusses essential business strategies that allowed Starbucks from its establishment in Seattle in 1971 as a single-location coffee shop to go worldwide. Nowadays, Starbucks has more than 11,500 non-franchised locations worldwide with annual sales more than $600 million and has been recognized as one of the best Fortune 500 companies to work for. The Starbucks former CEO and the current chairman, Howard Schultz, implemented the five core Starbucks principles for turning “ordinary into extraordinary”. By following these principles, Starbucks became extremely successful and since 1992 the Starbucks stock has grown a staggering 5,000 percent. The author discusses the five core principles that lead to Starbucks’ success such as: make it your own, everything matters, surprise and delight,
In this essay, the author
- Explains that starbucks embraces how every business should treat its customers, employees, and community in order to be successful.
- Explains that even when starbucks is close to failing on the new international market, the management always finds a new way to succeed.
- Summarizes the book "the starbucks experience" written by joseph michelli in an effort to explain the company's runway success.
- Explains that globalization of markets refers to the convergence in buyer preferences in markets around the world. starbucks understands the importance of incorporating the unique historic charm into its parisian starbucks experience.
875 wordsRead More - Starbucksopinion essayStarbucks 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.
In this essay, the author
- Explains that shultz and starbucks have to decide how to react to the opportunities that are being made available because of their rapid growth. a strategic growth plan has to be made in the near future.
- Explains that starbucks is the industry leader in specialty coffee and has a closed loop system that protects the beans from oxygen immediately after roasting to the time of packaging.
- Analyzes how starbucks' supply chain operations haven't caused any problems yet, but they have yet to come up with a long-term solution for such possible problems.
- Explains that starbucks has many opportunities of which it can take advantage, including a joint venture with mcdonald's, and the bottled frappuccino product that pepsi and starbucks have created.
- Explains that starbucks must be aware of the threats of competing in a particular industry, such as political unrest or currency changes in the counties from which it acquires its beans.
- Opines that starbucks could create a special brand of coffee just for mcdonalds that doesn't use the starbucks name.
- Opines that the second alternative is to push the frappuccino product that both pepsi and starbucks created into national distribution.
- Opines that franchising coffee carts would spark lots of interest and provide a fast move into many markets.
- Proposes a vertical and horizontal integration for starbucks to gain more control over their coffee production.
- Recommends that starbucks implement their strategy correctly, such as getting a deal with mcdonalds without using the starbucks name, and selling franchise right for coffee carts.
1328 wordsRead More - The Starbucks Corporationanalytical essay1. Starbucks Corporation's rise seems to be out of a storybook for Howard Schultz. Starbucks began selling whole bean coffee in 1971 under Jerry Baldwin, Zev Siegl, and Gordon Bowker. Business grew at a slow and steady pace until Schulz joined the company as manager of retail sales and marketing. After a visit to Milan, Italy, Schultz was inspired by a vision. He saw how important coffee was to the romantic culture of Italy. He believed that if Americans had such places to socialize over a cup of coffee, espresso, cappuccino, etc., that they would pay good money for his quality product. The owners of the Starbucks Corporation were not as excited and did not want to operate in the restaurant business. Schultz filmed these coffee bars and began to pitch his ideas to investors. By April of 1985, his first coffee bar had opened and by 1987 he had bought the Starbucks name. Although the first few years of the company were less than profitable, Schultz looked at the long-term opportunities and never let his idea die. Within a few years sales shot up 84%. This left room for expansion. By 1995 there were almost 200 stores opened across the U.S. and Starbucks was already looking international at this point and began operations to look to Asia. Starbucks now has opened bars all over the world and is one of the most successful businesses in the world.
In this essay, the author
- Describes howard schultz's rise as a manager of retail sales and marketing at starbucks. he saw how important coffee was to the romantic culture of italy.
- Explains how starbucks wants to turn their company loose on the international coffee bar scene. japan is the third largest coffee consumer in the world and the other regions were more of a risk for schultz.
- Explains that a low debt-to-equity ratio means less risk of losing profit. over 3 years, this percentage has decreased and increased most likely due to the international expansion.
- Opines that with the past trends, a lesser ratio is inevitable after the new bars are up and running.
- Analyzes how howard schultz's enthusiasm for starbucks shows he is the type of leader to take advantage of the growth opportunities in hong kong.
944 wordsRead More - Starbucks Business Communication Practicesanalytical essayFounded 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.
In this essay, the author
- Opines that starbucks and h2o africa join forces to help alleviate the world water crisis.
- Explains that starbucks coffee, tea and spices, founded in 1971 at seattle's pike place market, has been "brewing up" its famous blends in over 43 countries, including the united states.
- Explains that starbucks' first national tv spots are heavy on kindness, a little light on product message.
- Analyzes how starbucks communicates its layoffs. howard schultz transformation agenda communication #1.
1843 wordsRead More - Starbucks Leadership Analysisanalytical essaySchultz has had a lot of success with Starbucks, not only in revenue but he has continued to expand the brands in their portfolio, increase store locations and reach all new highs. Starbucks is now an international company with more than 21,000 stores in over 65 countries (Starbucks Coffee International, n.d.). Starbucks believes their global success has a lot to do with their international partners. Schultz explained it nicely when he said, “We remain highly respectful of the culture and traditions of the countries in which we do business. We recognize that our success is not an entitlement, and we must continue to earn the trust and respect of customers every day” (Starbucks Coffee International, n.d.). Schultz continually sees opportunity and the ability for growth, with an increase in locations across the globe every year and the ability to keep up with the latest in technology (websites, online shopping, a Starbucks application with the ability to pay and reload loyalty cards on your smart phone), etc.
In this essay, the author
- Explains that schultz has had a lot of success with starbucks, not only in revenue but he has continued to expand the brands in their portfolio, increase store locations, and reach all new highs.
- Explains that schultz exhibits numerous leadership traits and skills that gary yukl, professor of management and psychology at the university at albany, believes are associated with effective leaders.
- Explains that starbucks provides training for new partners in retail locations, including on-the-job experience, feedback and mentoring from peers, learning coach, and store managers. starbucks' voluntary turnover rate in 2013 was a mere 9 percent.
- Analyzes how starbucks has engaged with their partners by asking for their input on how making their experience better and more valuable through the starbucks partners facebook page.
- Analyzes how starbucks takes their partners' well-being seriously and offers a variety of benefits. schultz follows the behavioral school of management and recognizes employees as individuals with human needs.
1307 wordsRead More - Target Market Analysis of Starbucksexplanatory essayStarbucks 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...
In this essay, the author
- Explains that starbucks was established in 1971 with their first store in western avenue from that same year to 1976. they believe in serving the best coffee by growing the coffee under quality standards.
- Explains that starbucks works with over 18000 stores worldwide to ensure supplies are always available to their customers. starbucks started "grounds for your garden" in 1999 to make their business more environmentally friendly.
- Explains that starbucks target market is mainly adults between the ages of 25-40, these customers account for almost half (49%) of starbucks total business.
- Explains that starbucks target market ranges from the ages of 18-40, both male and female. the income of these people depends on the life-stage individuals are at right now.
- Explains the starbucks distribution channel, which consists of getting the best coffee beans from the farm and then brewing it in factories. starbucks also works hand in hand with the company that produces their mugs and cups.
- Explains that market positioning is a way to put in perception which you want to the mind of the customers.
- Explains the products offered at star bucks include coffee, tea, cold drinks, buns, sand witches and plenty of other items.
- Describes the things that need to be considered before the prices of products are generated.
- Explains that each individual has his/her own wants, so they decided to price each cup of coffee according to the ingredients chosen by the customer and the total is then given out.
- Explains that promotion of products is a must for it to sell. proper advertising, proper marketing, and creating buying incentives are needed for proper promotion.
- Explains that a coffee shop needs to be located in an area that attracts large numbers of customers, such as shopping malls, schools, offices, and drive-through services.
- Explains that before starbuck?s existed, a consumer would buy canned supermarket coffee as the standard means of getting coffee.
- Explains that starbucks is one of the most recognized brands in the market and their market share seems to grow every year.
- Explains that starbucks' products are pricy, which may be a weakness for the company because customers may choose cheaper alternatives. starbucks has to maintain their expected brand image.
- Opines that expanding into emerging markets would be a better advantage for starbucks. starbucks recently introduced an app called mobile pour, which would attract more customers.
- Opines that competition may be a threat to starbucks because other companies may come up with something that they lack and/or customers may prefer going to other coffee shops because of the price.
- Explains that the bcg matrix shows different products of starbucks, and according to the matrix one will be able to tell which product is highly demanded in the market and what isn't.
- Analyzes how starbucks has applied positioning to its market. target segmentation is the process used by organisations to target a précised category of customers with various needs, wants, and characteristics.
- Explains that starbucks gave themselves the position as a premium product in the coffee industry by producing and incorporating high standard, initiating innovative products and offering exceptional service. schultz was aware of the fact that coffee is extremely perishable item and practised high level of quality.
- Explains that starbucks catered really expensive products and it was in accordance with theory that the price which the customer gives to the seller for a particular quality, this price was evaluated as the quality of the product.
- Opines that starbucks should slow down the expansion process internationally and pay more attention to marketing new products and its brand name.
- Explains market segmentation, target market selection, and positioning. 2005. subudhi, r., 2014.
- Explains ken boyer's behind the scenes at starbucks supply chain operations itâ€tms plan, source, make & deliver. nithin geereddy.
2718 wordsRead More - Starbucks Reflection Paperexplanatory essayWhen I saw this discussion, I couldn’t help but think of Starbucks and the impact they’ve made throughout their 45 years of establishment. I worked with them for about 7 years and saw how unique they were from your everyday coffee and latte spots. A retail company with thousands of coffee shops in the US as well as in other countries, this particular retailer has been able to catch the eyes of all ages as well as locations throughout the world. For example, today college students utilize Starbucks locations to study rather than go to a nearby library. Starbucks is also known for its best coffee and espresso drinks (Latte or Frappuccino) and with one of its delicious espresso 's any student or just a person stopping in to enjoy its lounge area where there is free Wi-Fi is awesome! Starbucks lifecycle has made a 360 turn around and been revamped twice to accommodated the growing market. Customizing their brand to fit more in with everything and not just one thing. By doing this they’ve created multiple product lifecycles within their own lifecycle as a corporate company.
In this essay, the author
- Explains that starbucks is a retail company with thousands of coffee shops in the us as well as in other countries. starbucks lifecycle has been revamped twice to accommodate the growing market.
- Explains that starbucks' growth stage is one of the most important stages as it can drive the business.
- Opines that mature companies tend to engage in inorganic growth to fuel innovation, such as acquiring start-ups or middle-sized companies. not all products have been a home run for starbucks.
- Explains that starbucks uses risk management policies to hedge risk and pursue different financial aspects, such as interest rates, foreign currency, and commodities.
786 wordsRead More