Starbucks: A Detailed Situational Analysis

Situation Analysis Assignment: Starbucks
Starbucks Corporation is the world’s leading retailer of specialty coffee beverages and accompanying confectionery items. Starbucks was established in 1971 in Seattle by Jerry Baldwin, Zev Siegal and Gordon Bowker. Currently, Starbucks has over 21,000 stores and operates in more than 63 countries. The company’s mission is to offer an opportunity for people to enjoy a good cup of coffee and engage in a good conversation. The following situational analysis provides a detailed look at the current business situation of Starbucks by providing an in-depth analysis of the company’s current product, market, opportunities, and challenges.
Current products
The product portfolio of Starbucks falls into four key
Starbucks has an established brand and standard that allows its products to fetch premium market prices. However, this has come at a price for the company. Starbucks has various competitors that include: McDonald, Caribou Coffee, Dunkin Donuts, Costa, Coffee Nero, among other companies. There are also smaller countless coffee retailers that Starbucks competes with.
Although these companies sell a similar product which is coffee, there is a lot of product differentiation in the market. Each company is different in terms of what they offer their customers. Starbucks specializes in specialty coffee and sells its products at high market prices compared to other retailers in the market. The competition can be stiff and Starbucks has been a casualty of the existing industry rivalry. For instance, while Harrison & Hoole successfully entered the market with the support of Tesco, Starbucks exited the Australian market for failing to gain much market share (Latif et al., 2014).
Current
The customers fit into three categories including: children and teens, young adults and adults. Starbucks outlets are located in the most visible places possible and centralized in urban cities that serve as regional centers. The adult customer group, which is made up of men and women aged between 25 and 40 years, is Starbuck’s primary market segment accounting for 50 % of total sales. This group of customers has professional careers, relatively high income and prefers the urban lifestyle. Starbucks offers specialty products and spaces where this group of customers can socialize and spend time with their friends and families. Adult customers mostly prefer coffee and other caffeine beverages while the younger customers prefer non-caffeine beverages and confectionaries.
The young adults group, which is made up of customers aged 18 and 24 years, accounts for 40 % of the Starbucks’ total sales. Starbucks offers attractive retail stores and cafes where the young adults can meet people, spend time with friends and do assignments. Besides, the retail stores have Wi-Fi access and good music to attract and keep the loyalty of the young adults. These groups of customers are also attracted by the customer service and highly knowledgeable employees who educate customers about Starbucks’ products (Latif et al.,