Starbucks 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 provide an opportunity for people to enjoy a good cup of copy and engage in a good conversation. The following situational analysis provides a detailed look at the current business situation of Starbucks Corporation by providing an in-depth qualitative analysis of the company’s current product, market, opportunities, and challenges. Current products Starbucks offers specialty and high quality coffee at premium market prices. Starbucks’ …show more content…
Beverages include non-coffee blended drinks like Tazo tea, Viviano Smoothies and Ethos water. Starbucks coffee products come in different forms that include; fresh brewed coffee, hot and iced espresso beverages. Starbucks coffee comes in the form of dark roast, blonde roast, medium roast and flavored roast. The company’s confectionary portfolio consists of baked pastries, sandwiches, premium ice cream, oatmeal yoghurt, fruit cups and salads. Coffee making equipment include: coffee grinders, coffee brewers and espresso machines. The newest product portfolio of Starbucks includes music, books, packaged goods and gift items. The best performing product category is the beverage group while the single-serve category has recorded the highest growth in the past few years. The single-serve packaged category has helped to offset the decreasing coffee sales and rising costs of coffee beans experienced in the beverage industry in recent years. The recent trends in the coffee industry have made coffee making machines rather obsolete and …show more content…
Starbucks has an established brand and standard that allows its products to fetch premium market prices which customers are willing to pay. However, this has come at a price for the company. Starbucks has various competitors that include: McDonalds, 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. 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 to 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 a considerable market share. Current
The key to its success lies not only in the quality of its products but also the ability to differentiate itself from the competition. With Starbucks, it has always been about quality. The company manages stringent quality control measures for sourcing the finest coffee beans, roasting processes as well as customer service and ancillary products. Furthermore, differentiation is key to market control and Starbucks is unquestioningly the most differentiated specialized coffee brands in the world. From the design of its coffee shops to the music played to the types of products offered, everything has a touch of uniqueness.
Starbucks Corporation engages in the purchase, roasting, and sale of whole bean coffees worldwide. It offers brewed coffees, Italian-style espresso beverages, cold blended beverages, various complementary food items, coffee-related accessories and equipment, a selection of premium teas, and a line of compact discs, through its retail stores.
Since 1971, Starbucks Corporation has grown from a small coffee-roasting shop in Seattle to one of the largest chains of coffeehouses internationally, with nearly 21,00 stores worldwide. Starbucks originated as a coffee store selling coffee beans and coffee makers, and hoping to inspire people to brew their own fresh coffee. Today, Starbucks is one of the premier specialty coffee roasters in the world and carries beverages, snacks and consumer products. Starbucks Corporation owns a variety of coffee brands, tea brands, Ethos bottle water, pre-made drinks and Tazo Tea Company.
Starbucks portray a number of issues that may affect the company’s’ growth in the near future. To clearly understand these issues, they will be analysed in order to understand and create recommendations to assist in the growth of a successfully company.
Starbucks coffee is a well-known around100 years ago. in the 1970s , three Americans to turn it into a coffee shop signs to promote the spirit of America`s coffee, and since then, Starbucks coffee growing to recently the worldwide fascinating companries. Starbucks coffee using a unique way to make coffee, refresh resources, high quality coffee beans,environmental products and the different foods provided. As it able to keep a long-lasting, high value-added brands, strong culture backgroud, those all the facors to keep the companries enhance marketing position.
Starbucks is the United States number one specialty coffee retailer and a presence known around the world. It has over 2,600 coffee shops from Asia, Canada, the United Kingdom and the United States. Starbucks not only sells coffee but: pastries, food and drinks, mugs, and coffee making accessories. Starbucks sells their beans to restaurants, airlines, hotels, and by mail order.
The firm has the first mover advantage on ready to drink coffee beverages. Starbucks was the innovator and was the only offering until recently. Other competitors are beginning to enter the market and will have to provide a reason for the consumer to switch from what they know and enjoy already. This may be the biggest advantage for Starbucks as humans are creatures of habit and tend to stick to what they know and enjoy. Customer loyalty induces the purchaser to stick with the Starbucks brand. Many loyal consumers pick up the RTD coffee at the grocery store in the multi-pack offering. They then keep this purchase in their fridge for when they are running late to work and don’t have time to stop by a store. They can still have their coffee fix without stopping on the way or waiting for the coffee to brew at their home. Lastly, Starbucks has variety of ready to drink options compared to its competitors. The Starbucks website lists fifty five options to choose from. This wide selection has something for all consumers. While all options may not be available at grocery stores there is likely to be a more numerous selection than other brands which will draw in the consumer to find a beverage
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.
Since 1971, when the coffee industry had started to grow and the range of products and rivalry from other businesses were small; Starbucks was only then competing with brands that hadn’t really made much money over a few years, and Starbucks was topping them all with the amount of profit and revenue the business was gaining however due to the industry growing as days go on, Starbucks now has significant competitors that have stores all over the world that is affecting their exposure and how they sell their products indefinitely. One of these significant competitors is McDonald's, with over 36,899 restaurants, employing 375,000 people and serving 68 million customers a day.(En.wikipedia.org, 2016) They once originated
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).
If I was the CEO of Starbucks I would look at different things. One thing I noticed on Starbucks page was that they implemented a Starbucks Rewards system that is free and offers certain things after so many purchases spent at Starbucks. Free refills, free drinks after so many visits and some other perks were part of their newest rewards programs. Starbucks has great growth potential and should expand their tea and fresh juice products.In addition consumer tastes and lifestyles shift towards more snacks and beverages options, Starbucks should tailor its menu’s and expand to give more healthy product offerings. Starbucks should make significant investments in advertising and marketing initiatives in the face of increased competition in their market. I do not recall ever seeing a commercial or hearing a radio ad for Starbucks or their products. I have heard of Tim Hortons, a coffee chain and a Starbucks competitor, in the Northern areas of the United States. Another factor would be costs of products. With competitors like McDonalds and other coffee shops offering similar products cheaper customers may switch to the lower priced products due to the current economy. (Geereddy, N. (n.d.).
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.
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.
As we know, Starbucks has made a name for itself making and selling coffee and specialty coffee drinks. It has made its biggest impression by becoming the espresso expert and public educator of how to make the perfect espresso; "Roasters" of the company are trained for one year.