1. Recognize the need for change. What problems do you see now or foresee in the future, that will lead to a down turn for Starbucks. One critical obstacle for the Starbucks franchise is the over saturation of the market, they continued to build new businesses in local markets with out giving each the opportunity to solidify their customer base, some building as close as 2 blocks in large metropolitan areas. The economy could also have a direct impact on the Starbucks franchise. During times of prosperity and job security it is more comfortable to spend $2.10 on a 16 oz. cup of coffee than a $5.15 for a medium sized specialty coffee drink such as a Café Mocha or Carmel Macchiato. When the economy is down, the average consumer will cut …show more content…
Microstars - this concept allows for growth in an untapped market. Microbrews are a solid bet for the future. With the quality control used by Starbucks in all their endeavors, I see them having the capability of hiring master brewers that would create a truly wonderful microbrew experience, in a global market using select Starbucks signature blends to diversify their market reach and the brand logo. If customer spending is down during morning periods while people are starting their work day, some of its revenue can be salvaged by catering to a market that spends their disposable income in the evening while winding down from a hard days …show more content…
Loyalty Program - Being a tech junkie myself I find this to be one of my favorites. With the advent of Near Field Communications (NFC) such as Bluetooth, ApplePay, Paypal etc, instead of using the normal punch cards as a customer rewards system, an app can automatically track rewards and apply them at the time of purchase. Most people don’t leave their home without a smart device, and utilizing a medium that is almost always carried by the vast majority of customers, that can remove the hassle of keeping track of punch cards or delaying the customer purchasing experience by holding up lines, etc, can be a powerful tool, as well as a surprise to the customer when they pay for a cup of coffee, and all of the sudden it is “free”, because their rewards were automatically applied at
Strong customer loyalty needs to be acknowledged, Tim Hortons is the most trusted brand in Canada. Consumers love their Fresh cup of coffee as they get great value. To reward repetitive consumers Tim Hortons needs to team up with their Tim cards and
The organization can team with other organizations in order to create new products or grow revenues to the next level. Another option is to refocus on the home front and continue to growth domestically. With the competition that they currently face, Starbucks can push to gain bigger market segmentation. The company can also explore the expansion of their menu beyond just the “muffin mentality”. With that being said, they can also incorporate a full service breakfast & lunch and customers would be to get their coffee and a breakfast sandwich. Starbucks can focus on innovation by creating new items such as juice, gum, energy drinks, snacks,
Challenges they are facing is that younger consumers do not agree with Starbucks prices and yuppie persona. Starbucks attracts a more affluent customer base, who feel
e number one concern in all business is profit. When someone wonders why Starbucks’ business is so successful they can find their answer in the statistics. In Q3 2015, the total net revenues rose about 18% amassing a new record at $4.9B. The company cited this substantial increase in revenue to obtaining Starbucks Japan and the opening of 1,592 new stores in the last year.1 The company also witnessed a 22% rise in profitability credited to sales leverage.2 Starbucks saw continued growth globally, in the Americas, and the China/Asian Pacific at 7%, 8%, and 11%, respectively, accounting for an increase in customer transactions climbing towards 18M in the U.S. and 23M globally.3 These increases across the board could be accredited for the 21%
Starbucks likewise has the chance to grow its item offerings to tackle the full range sustenance and refreshment retailers like McDonald 's and Burger King as the customer fragment which these retailers target is extending prompting more business open doors for Starbucks to exploit.
Thirdly, taking into account reasons helps develop a customer oriented mission (what are we doing now? and visions (what do we want to achieve in the future?). The company tested four Café Starbucks in Seattle area, where they were serving meals. However, Cafés were soon closed as customers come to Starbucks to gaze rather than eat. Therefore, understanding the reasons behind this trend helped to identify the vision of the organization to stay a "coffee bar" rather than Café Starbucks.
There is speculation that the company was pouring too much capital into its complex system of joint ventures and licensing agreements, and could not get a hold of its operational costs. They decided to source some of their merchandise and disposables to less expensive suppliers as an immediate cost-cutting measure. They also decided to cut back on the number of new stores and shut down unprofitable ones. Starbucks has had to learn the hard way that external forces go far beyond a society's taste in coffee, and that too much growth can have negative effects.
Finally, this report will identify recomendations for Starbucks to minimze future loss and to compete with major competitors like McCafe and Gloria Jeans Coffee.
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.).
The smell that wakes most people up combined with friendly service is guaranteed to be a game changer. Around most corners in big cities worldwide, there is a Starbucks waiting to welcome in a customer. It has become one of the brands most cherished not only in America but across the globe. Why is that? Globalization, not happy with simply spreading across the United States Starbucks decided to branch out into the unknown. Let’s take a look at how this all happened and what is occurring right now with popular brand.
The rapid growth of Starbucks has become a testament to the success of the expansion strategy that was developed back in 1992 and 1993 when Starbucks developed a three year expansion strategy (Shah, Hawk, & Thompson, 2010). This strategy focused on areas that had the demographic targets that they wanted as well as the infrastructure to support and service their locations. For each region of expansion, a large city is selected to act as a central hub which was staffed with teams that would branch out expansion stores from that hub within the first two years (Shah, Hawk, & Thompson, 2010). This strategy of blanketing a metropolitan area with a “Starbucks everywhere” approach helps to streamline the logistics and management of supporting these stores as well as reducing lines in each of the stores and increasing traffic in all locations.
Starbucks greatest development is in its International fragment. The developing markets of Brazil, India, China, South Africa and Mexico with a developing white collar class populace keep on offering huge chances to include new stores and serve more clients. Starbucks has effectively made huge advances into the Chinese market however there still is a considerable measure of undiscovered potential development in these business sectors. Starbucks ought to develop in these developing markets by winning locally Starbucks must stay applicable to the client keeping in mind the end goal to develop in these business sectors, and its administration groups ought to have the flexibility to work inside their general system to tailor store position, present nearby item blend and value focuses to the requirements, ways of life and tastes of every individual business sector/group.
Starbucks Coffee is showing product leadership by introducing novel merchandise in its coffee shops and now retail stores around the globe. The Company has partnered with the PepsiCo brand for Frappuccino drinks and selling...
Starbucks and Dunkin’ Donuts both have competitive advantage in the coffee industry. Dunkin’ Donuts have focused on a strategy of becoming a cost leader in the U.S. coffee and snack shop industry. Their strategy involves offering the same or better quality service at a price that is less than its competition (Dunkin’ Donuts, 2016). They also have been able to establish relationship with their suppliers, which have been able to keep costs low. Overall, by keeping their stores and franchises consistent across the company, they have been able to achieve growth and profitability (Huffington Post, 2016). While they have a strong presence is the Northeastern part of the U.S., their popularity is low in amongst the rest of the country. Plans for expansion
As mention earlier Starbucks has many opportunities of which it can take advantage. These include a joint venture with McDonald’s, where the restaurant giant would supply its customers with Starbucks coffee. Another is the bottled Frappuccino product that Pepsi and Starbucks have created. This has had a very positive response in the test markets and posses to be a lucrative option. Starbucks could also look at the vertical integration possibility of producing its own beans. This could prove to be very successful if they can capture a significant amount of the production they could become a price setter in the coffee commodities. Also because small coffee retail outlets are so trendy it is possible for them to set ...