In 1971, the first Starbucks store opened in Seattle’s renowned Pike Place Market. In the beginning they made only one guarantee to their customers: Expect More Than Coffee (Starbucks, 2017). It is on that guarantee that they have built a connection with their customers that has solidified their success in a saturated market. Now they have more than 24,000 retail stores in 70 countries (Starbucks, 2017). Their extensive brand portfolio now includes the following: Starbucks Coffee, Seattle’s Best Coffee, Teavana, Tazo, Evolution Fresh, La Boulange, Ethos Water and Torrefazione Italia Coffee. In this report, I have made the choice to delimit this brand audit to only include the Starbucks flagship brand. The brand has positioned itself as a …show more content…
This category is defined by the trend of “purchasing coffee is based on its origin and artisan methods of production.(Fast Company, 2014)” Within the UK, the brand faces competition from Costa Coffee, Caffe Nero, McDonald's (McCafe Range), Pret a Manger, Greggs and not to mention independent hipster artisan coffee houses. In addition to this existing competition, the Canadian based coffee chain Tim Hortons are rumoured to be preparing to make an entry into the UK market. (Business Insider UK, 2017) Points-of Parity Starbucks pride themselves on providing great-tasting coffee, reliability in service, speed and convenience. Whilst other competitors have entered the market and offered the same attributes, the brand has always capitalised on the ‘authenticity’ factor. However as the brand expands it becomes more commercialised, causing an erosion in its competitive advantage in this arena. This has left a gap for independent artisan coffee shops to offer a unique experience to rival the one Starbucks promises. …show more content…
Starbucks has made the decision to implement a category brand extension: Reserve and Roasteries which will have a more exclusive and upscale Starbucks experience. This extension will include 20-30 Roasteries targeted a tourist friendly locations serving slightly more expensive products. In addition, they will open 1,000 Reserve stores offering small-batch coffee and and food and Reserve Bars at 20% of all locations (Bloomberg Markets, 2016). There is one Starbucks Reserve located in Covent
The local cafes are indirect competitors as they do not offer as wide range of beverages, as high quality of products as Second Cup. Considering these differences, the local cafes are not considered to be a threat to Second Cup. The specialty coffee retailer, Starbucks, on the other hand, is a direct competitor because it offers a similar selection of products. The strength of Starbucks is that it is acknowledged all over the world. But the weakness is that Starbucks is always overcrowded. Consequently, Starbucks is a close substitute to Second Cup and pose a significant threat of rivalry. However, Second Cup has a better quality of products, wide range of beverages and offers a friendly and pleasant atmosphere, that may work to the advantage of Second Cup in attracting and retaining consumers. Moreover, the prices of Second Cup products are cheaper. Although Second Cup has a number of competitors including Starbucks and local coffee houses, Second Cup has a competitive advantage in terms of differentiations and brand
Because Starbucks set up a brand personality, the operation cares more about selling a kind of “coffee service” rather than partners cannot make delicious coffee.
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.
Starbucks offers more than 30 blends of coffee. The prices for the product are high - it keeps the brand desirable. In this way, the main target market of Starbucks are adults from the age of 25 to 40. The coffee houses are designed to satisfy the basic needs of such customers – classic design, minimalism, comfortable furniture and newspapers. This audience has a
The importance of economic indicators to the strategic planning process in any organization is the ability to benchmark economic conditions that contribute to improve profitability, business growth and market size. Leadership sets up the mission “to establish Starbucks as the most recognized and respected brand in the world.” In doing so, they have created a set of industry-leading, comprehensive coffee-buying guidelines addressing coffee quality, financial transparency, social and environmental responsibility. Starbucks strategy is also expanding market in globally to provide high quality coffee in convenient and visibility locations. They are continuing to innovate and extend the business with imaginative new ready-to-drink beverages and expanded packaged coffee offerings (Starbucks Corporation, 2007).
Starbucks Corporation is a coffeehouse chain that began in Seattle in 1971. Since that time, Starbucks operations have grown and there are now over 22,000 retail stores throughout 67 countries. Starbucks strives to offer customers a comfortable, “home-like” environment while remaining conscious of ethical behaviors and social responsibility. It can be argued that Starbucks dominates the coffeehouse market, and much of this may be due to a grand strategy with a focus on growth. Using a growth strategy, Starbucks attempts to increase its market share and revenues by increasing the number of its stores and the number of locations it serves. So far, Starbucks has enjoyed much success with this strategy.
In today’s retail business market, Starbucks is one of the largest coffee companies in the world. In the early 70s, Starbucks opened their first store in Seattle. Over 30 years later, their company has massively expanded opening over 7,000 stores in the United States and internationally. Starbucks is definitely a favorite in today’s coffee market due to their popularity and success. They view themselves as a business that has premium coffee in the world while striving to maintain consistent success as they grow into the future. Starbucks has also expanded their business by expanding their products through Breyer’s ice cream and having their very own card, which customers can purchase and pre-load.
When Starbucks started their target market were people who enjoyed coffee not just for the energy boost that they got from the caffeine, but people who enjoyed sitting down and drinking a well-prepared cup of coffee. Upon visiting Italy and falling in love with the coffee bars and the experience that they offered, Schultz envisioned a place between home and work where you could just sit and enjoy your coffee. Starbucks wanted to control their coffee from “raw green bean to the steaming cup” this meant that they had to talk with their farmers to make sure the quality was up to their standards. They
In the United States, coffee is the second largest import (Roosevelt, 2004). Furthermore, the United States, consumes one-fifth of all the worlds¡¦ coffee (Global Exchange, 2004). The present industry is expanding. It is estimated that North America¡¦s sector will reach saturation levels within 5 year (Datamonitor. n.d.). According to National Coffee Association (NCA), 8 out of 10 Americans consume coffee. In addition, it is estimated that half of the American population drinks coffee daily. The international market remains highly competitive. It is estimated that 3,300 cups of coffee are consumed every second of the day worldwide (Ecomall, n.d.). The latest trends included dual drinkers, an increase in senior citizens...
The popularity of Starbucks has been tremendous, and thanks to the operational planning abilities of the management team behind Starbucks, this little coffee house has become an overwhelming sensation. With careful planning, and dedication to its products Starbucks now leads the pack, and remains #1 to coffee consumer?s nation wide. By staying in touch with the public, and their changing tastes, the Management team at Starbucks was able to capitalize on trends. Pair this with the ability to recognize possible weaknesses, and work around them, Starbucks was able to avoid failure. Now caffeine-
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
Caf? Expresso, as the first mover in the coffeehouse marketplace, which has expanded quickly and become one of the ?big three? players in the global coffee shops chain. However, recently this company is continuously facing a lot of problems in terms of its staff, easy-copied business model and product range, resulting this company lost its leading position to the number three. Therefore, its adjusted visionary goal is ?return Caf? Expresso to the number one position in the marketplace? (Beardwell, 2010). To achieve this goal, Caf? Expresso identifies ?the coffee drinking experience? is significant to achieve competitive advantage and customer value-added, which was delivered through three key elements (graph 1),
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,
Shanghai has 256 Starbucks stores, which is the most of any Chinese city, but the city with the most Starbucks stores in the world is Seoul. The South Korean capital has 284 locations, seven more locations than New York City’s 277 stores. Canada currently has the most Starbucks stores after the United States, with 1,396 locations, but China is quickly catching up. According to company filings, sales in China and the Asia-Pacific region grew faster than any other, and their sales accounted for 6.2% of Starbucks Corporation’s sales in 2013. In 2013, 588 Starbucks locations also opened in China and the Asia-Pacific region. In its 2013 annual report, the company says it looks forward to establishing China as its largest market outside of the United States. With a goal to open 500 new stores in China in 2016 and entering the China ecommerce market, Starbucks Corporation seems to have a strategy in place to expand its international operations. Since its takeoff in China, Starbucks has made sure that it adjusts itself to the local environment and this strategy has been influential to its growth in the region. The company continues to do so as part of its largescale
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.