In the midst of the Covid-19 pandemic, the biggest critical issue facing Starbucks is an

issue that many other coffee places are all facing. From the fact that Covid-19 has instilled both
a fear and mandates to keep people safe and encourage them to stay home, overall reducing
the physical connection of people face-to-face and expanding the need for the online world. Are
all business related to the Covid-19 pandemic negative? No! Starbucks is actually on the up and
up in producing and selling to more customers as the future of the pandemic has been
continuing in our day to day lives. Starbucks generates so many of its customers on the
pathway to driving to work or dropping their kids off from school and they are a huge segment of
Starbuck’s market, and the increased use of virtual meeting platforms, such as Zoom, has
reduced office time and increased both students and parents working from home. This issue is
the most critical issue facing this coffee industry because even as Covid-19 becomes more
obsolete and vaccinations become more accessible, many companies have taken actions to
keep people working remote from home and having a fresh pot of coffee made right in their
kitchens.

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Starbucks is one of America’s largest coffee giants that offers an assortment of drinks

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and food items for the everyday people.Starbucks attracts customers on the daily for not only

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their wide choice variety of speciality drinks, but also for their premium, low-costing baked goods
to reach customers of all economic classes. Starbucks having the ability to appeal to a large

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age range in their audience is substantial in their success as well, having a brand reputation that
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keeps their sales on the constant rise. The value Starbucks offers that particularly interests the
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common people could make it difficult to keep their sales at a consistent level during the
pandemic, as significantly less workers are traveling on a regular basis. This in turn reduces
Starbuck’s ability to profit off of an everyday commonality for some. With Covid-19 shutting
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down a lot of the Starbucks and other restaurant industries, a resurgence of Starbucks has
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sprung back open with plans of keeping both drive thru accessibility and online orders. Until
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businesses are continuously opened to the extent they were prior to the pandemic (which may
never happen), Starbucks faces the issue of rising competition in both the restaurant industry
and specialty coffee offerings from competitors at a cheaper value, even with accessibility in the
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coffee industry being so similar.

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As discussed in the article “How Starbucks is using COVID-19 crisis to differentiate the
brand'', found on WARC:
(https://www.warc.com/newsandopinion/news/how-starbucks-is-using-covid-19-crisis-to-different
is

iate-the-brand/43929)
Kevin Johnson, the CEO of Starbucks, speaks on how the pandemic has affected Starbucks in
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a way of promoting differentiation from their competitors, which is one of their key issues that
was spoken on related to the restaurant industry. Mr. Johnson speaks on the increased
importance and change of digital touchpoints for Starbucks in the upcoming years. This could
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prove to be problematic or impactful for the regrowth of Starbucks as many other coffee shops,
such as Dunkin Donuts and Caribou Coffee, have perks in these areas regarding mobile orders
and an online app. Although, this has proven to show success for Starbucks in some areas such
as the delivery scene that no other coffee company has put into place. “Almost 90% of sales
volumes in Q3 flowed through the combination of drive-through and mobile order-and-pay,
Johnson said. Delivery has also been a boon for the company during the pandemic.” Prior to the

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 pandemic, most of their sales came from in person orders and if the pandemic settles back
down to normal, Starbucks could waste a timely cost of time and funds into an investment this
large.
A solution that I would recommend to Strabucks and a first step in solving the issue to a
problem of fighting other specialty coffee restaurants is almost impossible as competition
creates innovation. We learned this in the first few weeks of class. In hopes of providing extra
insight to help Starbucks overcome this competition and create a larger gap, they need to attract
their competition customers via new methods of providing coffee to people whilst Covid-19 is
pertinent in our world. Starbucks needs to advertise itself in an a manner that is both attractive
and beneficial to those customers who are purchasing coffee at other restaurants, and then
really impress them with their service, their poise, and their speciality drinks and baked goods.
To attract these customers who are more loyal to a cheaper or more local coffee shops such as
Dunkin Donuts or Caribou Coffee, Starbucks must spearhead the issues that these current other
coffee shops are facing: The digital marketing points that Kevin Johnson was talking about.
Offering these customers the ability to deliver their drinks to the luxury of their home or

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workplace makes it that much easier to get a gourmet cup of coffee.The key to this would be to

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create a perception to these customers that the quality and experience Starbucks can offer them

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is substantially greater than these other coffee shops because of their ability to receive a cup of

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coffee at any location. This could then increase the other digital marketing points such as online

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orders and a mobile application to increase retention by offering perks or discounts to new
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customers.This strategy could be something that other coffee shops want to do because it may
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be a little costly, adding delivery drivers and extra services to their customers, but it may be the
differentiating factor that Starbucks needs to pull away from its competitors, atleast for the time
being to rebuild from Covid-19 impacts. For a solution like this to work, a few pieces of the
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puzzle have to fall in place. These customers that are loyal to their desired coffee shop must be
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open to trying new things and testing new waters in other coffee shops. They must not be as
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loyal to have a willingness to have Starbucks in their lineups of good places to grab coffee.
Starbucks too will have to work with these customers, even if it is at the price of free delivery for
the first few cups of coffee or offering advanced rewards to brand new customers to incentivize
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choosing them. Pricing is the last thing as well that Starbucks may have to address in a different
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manner. These competitors offer a good cup of coffee but at a lower price. How can Starbucks
compete with that? By adding value elsewhere. Starbucks needs to understand that their high
valued items come with high valued service and high premium coffee and goods. Customers
need to understand why they should pay for your value.
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Overall, this solution that I am proposing isn’t picture perfect, but it is something that
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could prove to be successful. I think with a proper focus and the right steps moving forward in
marketing and making sure a message is heard, Starbucks could convince some coffee drinkers
to become loyal to Starbucks through their loyalty programs and shelf products, but also to the
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fact that coffee is something that is an everyday necessity for most people and that Starbucks
should keep the advantage for the frequent hardworking customers, whether they work from
home or are going to the office.

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