STARBUCKS COFFEE

Introduction
In 1971 Starbucks is founded by Jerry Baldwin, Gordon Bowker and Zev Siegel
in Seattle. It sold only whole-bean coffee and coffee brewing machines. It is established
as a coffee and coffeehouse chain. In 1980s Howard Schultz joined Starbucks in 1982,
then Schultz became CEO and changed the vision of Starbucks. He expanded the
scope and exposed the brand wider. Now Starbucks is the largest coffeehouse
company in the world with 17,009 stores in 50 countries, including over 11,000 in the
United States, over 1,000 in Canada, and over 700 in the United Kingdom.
The Main Success Keys
1. Quality Policy
Starbucks has always preferred to offer extreme quality in every aspect. Worked
directly with the best growers to purchase high quality coffee beans. Applied the highest
standards of excellence to roasting and brewing these beans. Provided the service
experience consistently for all customers by well-educated employees who called
Baristas The taste of your favorite coffee never changes due to the standardized
processes and quality control focus of management.
2. Vision of Third Place
Starbucks aimed to be a third place for its customers as well as their workplace
and home. Each Starbucks store is carefully designed to enhance the quality of
everything about the customers sensory feelings such as see, smell, hear or taste.
Starbucks symbolize not just a coffee house, but a pleasurable coffee-centered
experience.
3. Strong Commitments by Mission Statement and Brand Values
To inspire and nurture the human spirit one person, one cup and one
neighborhood at a time. Based on this mission statement, Starbucks identified its brand
values as; Coffee: Always with high quality. Partners: Starbucks employees are
passionate in what they are doing. Customers: Uplifting the lives of the customers,
creating a special bond. Neighborhood: Social responsibility and leading the way for
progress.
The Growth Strategy Evaluation
Starbucks planned its expansion of specialty coffee stores into new markets
carefully worldwide. The most important feature of Starbucks is its expertising in coffee

roasting and brewing processes. Also all Starbucks employees deep feel has constantly
increased the success of the brand in core business. By the way, Starbucks is
extremely careful to avoid losing the brand identity and core values while diversificating
the product. So, Starbucks focused on maintaining the leader position in coffee
business. Partnership is the main and also successful part. It is no coincidence that
14% of Starbucks customers had their first Starbucks coffee in United Airlines flights.
This is a good example for decisions of cooperation. On the other hand, its a clever
venture to expand the distribution network with a strong business partner such as Kraft
and Apple.
With creating new products such as Frappuccino with Pepsi, Starbucks
increased its brand awareness and recognition. It provided Starbucks and Pepsi $152
million in sales and 83%marketshare in ready to drink market in 2005.Howard Schults
decisions from the beginning was that Starbucks would only enter into partnerships with
companies who maintain the same commitments to quality and people that Starbucks
had as the foundation of its business worldwide.
Starbucks:
A Global Brand? YES! YES! YES! Starbucks is in over 55 countries around the
world and has 17.009 stores now. Over 11,000 in the United States over 1,000 in
Canada over 700 in England. Its easy to understand the growth of the brand by looking
at Starbucks revenue that comes from the open stores. Also, Starbucks plans to open
900 new stores on the world in next year.
Moving Into Non-Coffee Area
Starbucks has positioned itself not just a coffeehouse, also a pleasurable coffee
centered experience place. Third Place vision is an indicator of this approach. As a
result, Starbucks moved into some non-coffee areas such as;
1. Credit Cards - Made it easier for customers to purchase. Combined Starbucks
reloaded card and credit card
2. Starbucks Entertainment - Investment in film industry, Custom-made CDs in stores
3. Ethos Water
4. Tazo Tea
Although moving into new areas is succeeded, there are some disadvantages for
Starbucks.
Advantages

Increased Brand Awareness

Improved Brand Image
Enhanced Parent Brand

Disadvatages

Lost Brand Identity

Lost Core Value
Frustrated Customers

In the next step, Starbucks may improve new products which will be related with
core business of coffee and its store chain more qualified and enhanced.
Starbucks International Expansion
Starbucks expansion strategy is very successful. Now, Starbucks has 17,009
retail outlets in more than 55 countries worldwide. It has already taken place in many
countries with an aggressive strategy with brand awareness and recognition. After then,
Starbucks should increase its market share in these countries with local approaches
and improve its product category.
Starbucks: Turkey
Starbucks is brought into Turkey by Shaya A. which also serves different
international brands to consumer market, such as Top shop, Evans, Dorothy Perkins,
The Body Shop, Peacocks, Claires, Debenhams, Top man, Miss Selfridge, Le Pain
Quotidien.
Starbucks Coffee franchise system in Turkey does not work like that all over the
world. By the central management of Shaya all stores are being opened, operated and
controlled. Starbucks is in 12 cities in Turkey and has 161 stores. Over 100 in Istanbul
and over 20 in Ankara. Starbucks also has an enlargement strategy in other 2 cities in
Turkey.
Competition Threats: Global
The biggest threat for Starbucks in global market is the strong competitor,
Dunkin Donuts. Dunkin Donuts is one of the most famous food and beverage company
that headquartered in New York, in international markets. In Feb.2011, Dunkin Donuts
earned the No. 1 ranking for customer, have loyalty in the coffee category by Brand
Keys for the fifth year. Dunkin Donuts has more than 1,000 donut varieties along with
other products, especially with a wide variety of coffee beverages. In 2010, Dunkin
Donuts global system-wide revenue was $6 billion. Brand Keys is active in predictive
brand equity, loyalty, and engagement metrics since 1984.

Competition Threats: Turkey

The biggest threat for Starbucks in Turkish market is the strong competitors,
Kahve Dunyasi. Kahve Dunyasi opened its first store in Eminonu in 2004, selling retail
and wholesale coffee, now one of the major brand names in the sector thanks to its fast
growth. Kahve Dunyasi offers more than 50 kinds of coffee from traditional Turkish
coffee to espresso-based gourmet coffee varieties, from flavored filter coffee to chilled
coffee, and from packaged coffee products to regional coffees. Along with coffee,
chocolate production is also another area in which Kahve Dunyasi is an expert.
Human Resource Management
Starbucks realized early on that motivated and committed human resources were
the key to the success of a business. Company takes great care in selecting the right
kind of people and makes an effort to retain them. The companys human resource
policies reflect its commitment to its employees. Starbucks hires people for qualities like
adaptability, dependability and the ability to work in a team. Starbucks also is one of few
companies who invest in employee training and provide comprehensive training to all
classes of employees, including part-timers. Employees are trained and educated by
Coffee Master in coffee tasting, growing regions, roasting and purchasing with 25hours of coursework.

I.

Statement of the Problem:

1. How do Starbucks maintain their position as the leading brand
coffee business?
2. What will Starbucks do to handle existences of competitors?
3. How do Starbucks continue to ensure goals accomplishment of
their business?

II.

Alternative Courses of Action (ACA)

1. Having a strong and consistent marketing strategy to sustain the
business.
2. Developing enthusiastically satisfied customers all of the time.
3. Attaining good quality and good services of the product.
4. Having unique capabilities to serve needs of customers or target
buyer segment.
5. Continuing team work and communicating properly between
managers and employees.
6. Maintaining excellent relationship with both customers and
employees.

III. SWOT Analysis

ACA 1
Strengths

Weaknesses

1. Internationally
known
2. Strong,
valuable
brands

1. Lack of
agreement or
focus on key
initiatives
2. Poor strategic
alliances

Opportunities

Threats

1. Expand
product
lines
2. Viral
marketing
programs

1. Large
number of
competitor
s in
specialty
coffee
beverage
business
can lead to
low
profitability
2. Market and
sale
system not
synergized

Opportunities

Threats

ACA 2
Strengths

Weaknesses

1. Good
reputation
among
customers
2. Consumer
retention

1. Product
differentiation vs.
Competition.
2. Less Marketing
Activities.

1. Customer
loyalty
2. Growing
market

1. Steep
competition
in the
market
Changing
buyer
demands
2. Increased
of inflation
rates

ACA 3
Strengths
1.Strong
brand
recognition
3. Substantial
goods and
services

Weaknesses
1. High price
compare to other
competitors
2.Cant reach
customer
satisfaction

Opportunities

Threats

1. Solidified its
place in the
market
2. Increase
market
demand

1. Changes in
consumers
taste
2. Economic
slowdown

ACA 4
Strengths

Weaknesses

Opportunities

Threats

1. Brand
awareness
2. Highly
targeted
by the
consumers

1. Cant reach
the
expectation of
the customers
2. Limited
product
categories
and varieties

1. Expand your
target market.

1. Inconsistency
in keeping up
sales
2. Intensifying
competition

2. Complacency
among rival
firms

ACA 5
Strengths

Weaknesses

Opportunities

Threats

1. Strong
organization
2. Skill
workforce

1. Lack of
management
depth
2. May arise
misunderstandin
g

1. Improve
employees
commitment
2. More
training
facilities /
activities

1. Arise chaos
2. Emerge
trouble in
the
company

Weaknesses

Opportunities

Threats

1. Need to invest
big capital.
2. Lack of strong
relationships
with customer

1. Purposive
addressing
of potential
buyers
2. Provides
solution for
customer'

1. Elevated
customer
satisfaction
and loyalty
2. Slower
market
growth

ACA 6
Strengths
1. Growing
reputation
in global
market
2. Strong
company
name.

IV. Recommendation
Based on the external factors, the critical factors that Starbucks is
facing now are the steep competition in the market and the changes in
customers taste so it recommends to use the winning ACA which ACA 1,3
and 6. They must have a very strong and consistent marketing strategy to
sustain business and for developing enthusiastic yet satisfied customers
for maintaining excellent relationship with both customers and employees.

V.

Conclusion

Starbucks has been a very successful company, though innovative ideas

and persistent growth has gained a competitive advantage. The challenge
now is continue to grow and sustain its market share. They have to
maintain giving good quality product and services in order to expand its
market and to achieve the goals of the company. Starbucks coffee must
also maintain the good relationship between customer and employees to
continue get the customer loyalty, increased market demand and to sustain
good reputation.

CASE STUDY
IN
MARKETING
MANAGEMENT
(STARBUCKS COFFEE)

Submitted By:
Velasco, Jessica

Rivera, Gennelyn B.