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The revenues are generated in United States mainly through the licensed stores and company
operated stores run by the company all over the country. The aim of this assignment is to analyze the
competition within the instant coffee market and select a best fit strategy to successfully launch and
sustain the growth of Starbucks. Report this Document Download now Save Save Starbucks
Research Report For Later 100% (5) 100% found this document useful (5 votes) 6K views 58 pages
Starbucks Research Report Uploaded by Aliya James AI-enhanced description The document
provides background information on Starbucks, the largest coffeehouse company in the world. The
expansions of the stores were due to the high demand of the coffee that the company provided to the
consumers of Seattle. During the recession, Starbucks did not slow down the expansion which
resulted in 300 store closures and 6700 job losses in 2009. To analyse the factors that affect
consumer buying behaviour. In the future, we would love to see the blog expand beyond just Tumblr
— we would be ecstatic to see it turn into a coffee table book. This approach emphasized a strong
commitment to product quality. Below are two exclusive Literary Starbucks entries that the authors
wrote specially for Bustle. A business plan should depict the short term and long-term goals and
how they can be achieved. Also in 2004 the company entered into an agreement with Jim Beam
Brands Co. Additionally, NGOs have been pressurizing Starbucks to purchase certified coffee beans,
which must be grown in certain economic and social conditions (Khattab, Aziz and Naguib 15).
Management capabilities in the form of distinctive skills, valuable human and physical assets, etc. In
case of Starbucks, its tangible assets include warehouse property and retail location, machineries and
facilities related to coffee roasting, inventory, transportation equipments and brewing machines. The
company is financially strong and has a large cash balance in its balance sheet. This book by
Treverton (2009) is argued here to be a vitally important area of work that looks specifically at the
way in which the use of intelligence has naturally. To demonstrate the effects of external factors on
Starbucks an analysis of the environmental analysis is important. This could make employees keep
having relatively high motivation. To be able to serve individuals from different countries and
cultural diversity, Starbucks has employed personnel from different diversity. Wilson is captain of the
varsity swim team, and he also writes, plays intramural softball, and is a member of the one person
Roland Barthes fan club. In 1988 Starbucks introduced a mail-order catalog, and by the end of that
year, the company was serving mail-order customers in every state and operating a total of 33 stores.
Moreover, Starbucks is committed to SCORES, a non-governmental organization within United
States. Describe the ideal Starbucks customer from a profitability standpoint. This strategy shows
that Starbucks place their attention on the scale and leading position of the company, and
underestimate the importance of branding and differentiation. This will enable the company remain a
successful competitor (Starbucks.com Web). Since Starbucks has gained wide popularity across the
globe, it should focus on further expansion to regions such as Asia where coffee beverages gaining
wider acceptance. These types of assets help in achieving the financial and operational objectives of
an organisation. Starbucks Coffee Company is a leading coffee retailer that deals with roasting and
retailing of coffee beans, selling brewed coffee, coffee related equipment’s, Italian-style espresso
beverages, other cold beverages and some food items. The company was opened in 1971 as a small
coffee shop at Seattle. Consumers go through these steps while making taking any decision almost
nearly every day. The company became heavily capitalized and it became a popular chain of shops
throughout the United States in the 1980s and 1990s. Moreover, the company processes I coffee
ensuring that it is of excellent quality (Khattab, Aziz and Naguib 1-5).
For the fiscal year ended October 2011, the US segment accounted for around 69% of the total
revenues generated by the company (Starbucks Corporation, 2012). Starbucks Corporation. (2008).
Fiscal 2008 Annual Report. The aim of this assignment is to analyze the competition within the
instant coffee market and select a best fit strategy to successfully launch and sustain the growth of
Starbucks. What’s your process behind the scenes — do you all work together on each post, do you
divvy them up according to interests, etc.? We file all of the requests onto a communal Google Doc,
and we each write individual posts that speak to us or that we think we can write well. No doubt the
Janitorial program was proved very consistent and efficient but still Starbucks was spending a lot for
the cleaning purpose. Bargaining power of buyers—low Individual customers who consist of the
majority of the target market usually do not have bargaining power, compared with a large
corporation. Mugs for sale, this has created their signature product worldwide by offering a variety
of Starbucks mugs to the people. Starbucks must make changes on their performance to satisfy the
investors. Customer survey data from 2002 demonstrated that highly satisfied customers visited more
often, spent more money and had a longer average customer life than unsatisfied or satisfied
customers. To identify the factors that affect the positioning of the brand in the market. What are
your interests and hobbies outside of Literary Starbucks. Their focus was to sell coffee beans and
equipment. The emotional connection is established through a personalized experience of how coffee
makers interact with the customers and how the overall process of order-taking works. As he takes
his drink from the barista, their hands brush. Therefore, the organisation must take necessary steps to
motivate the employees, which might create further job satisfaction. They purchased green coffee
beans from Pet's, a specialty coffee roaster and retailer, during their first year of operation. It is
critical for Starbuck to react for this conflict before it becomes an enormous issue. This can be done
with the help of consumer decision making process, as it is extremely valuable for all businesses. In
2008 Starbucks held their annual meeting in New Orleans and used this as an opportunity to raise
10,000 volunteers to take part in various community projects to help rebuild this area. Starbuck can
also sign licensing agreements with more companies to enhance its product distribution at a reduced
cost. Hence customer service forms an integral part of any strategic initiatives taken up by the
company. 2. Secondary Activities: a. By decreasing customers’ waiting time and increasing their
choices, Starbucks wishes to raise its loyalty among existing customers and attracts new customers.
When they expanded in 1997 into Florida, Michigan and Wisconsin the total number of branches
were 1,412 by the end of year. But as the company and its client base grew, it failed to identify the
evolving needs of its consumers. Do you think it’s a good idea to have a president for the US
division and for the international divisions. It has a simple price strategy based on the
psychographics of consumers who prefer ambience and quality over other factors. The careers
become so appealing at Starbucks because of the overall training programs and the grooming offered
to the employees. The Starbucks’ company was founded in 1971 in Seattle, Washington at the Pike
Place Market and was founded as a single coffee shop. All these factors have resulted in creation of
core competencies and gain competitive advantage by Starbucks in the US speciality coffee industry.
Orin Smith promoted to president and chief executive officer.
However, Susan Spring, director of facilities, mentioned at a conference in 2002 in Orlando, “Each
year we overspend. It would be interesting to see the results of a survey of coffee consumers that
weren’t Starbucks customers. Once the coffee is made individually from freshly ground beans, the
customers would notice the “hand-made” feature, which results in a different perception from other
competitors. Market Segment and Consumer Behavior Case Study - Starbucks: Just Who is thei.
Mugs for sale, this has created their signature product worldwide by offering a variety of Starbucks
mugs to the people. The continuous demand and the quality level of coffee and service of starbucks
have made the corporation global leader in offering speciality coffee in the coffee industry.
Competition is mainly driven by the ease of opening retail business, which has led to flocking of
retailers into the business. Brichall, D., and Tovstiga, G., 2005. Capabilities for Strategic Advantage:
Leading Through Technological Innovation. All these factors have resulted in creation of core
competencies and gain competitive advantage by Starbucks in the US speciality coffee industry.
Source: Here, we bring you up-close and personal with the design, history and evolution of
Starbucks logo which is nothing less than magnificent. In order to increase the confidence of
shareholders, the CEO of Starbucks pronounced that company would keep forces on create long-
term shareholder value. Most of starbucks revenues come from retail locations that the company has
established in many countries. Starbucks is headquartered at Seattle, Washington and was founded in
the year 1971 (Yahoo Finance, 2012a). The organisation structure of Starbucks is hierarchy structure.
The revenues are generated in United States mainly through the licensed stores and company
operated stores run by the company all over the country. With this drive-thru service, customers
would not have to hardly look for parking in the hassle parking place. Wall Street analysts began
questioning the wisdom of moving so far afield from the company's core coffee business. Starbucks
Corporation is a US based company and is engaged in the business of purchasing and roasting whole
coffee beans. The newest logo design features an enlarged Siren with no stars and wordmark. So
communication problem can be a main factor to cause the conflict within the organisation. If coffee
turns out to be a trend, they must diversify their business where other competitors have invested in.
Huge brand value, immense resources, talented employees, smart top management team etc are some
of the strengths whereas heavy pricing is the major weakness of starbucks. In this report, I would like
to analyse an American giant, Starbucks Coffee Co., and demonstrate a critical problem within the
organisation, organisational change procedure and some possible recommendations. Assets in the
form of brand image, patents, copyrights, goodwill, intellectual property rights, etc. The first step of
the process is: the financial and planning department is going to identify the cost issue in order to
gain the cost advantage to competitive with their competitors and report this to the top manager. The
second step of the process is: the top manager will identify the needs of reducing cost and ask the
HR department to introduce the new program to the subordinator. In 1992, Starbucks decided to
change the black outer strip of their logo to a green one, which began the change to a purely green
color scheme. Motivation is very important because of its significance as a determinant of
performance and because of its intangible character. Chad Ogle MGMT 620 HBS Case 9 Starbucks:
Delivering Customer Service History In 1971, Starbucks started as a small coffee shop which
targeted a specialized market of coffee purists. The very fact in-store ambiance of the stores is quite
impressive and it is also an important factor that most customers like me enjoy besides sipping great
coffee.
She further explained that about one-third of the stores got 70% of their cleaning spend. It also
prioritizes treating employees and the environment responsibly. Weaknesses Starbucks tends to lack
focus on the internal matters. They offer particular products and services or serving to the local
markets needs. From the reading, it appeared the company previously relied heavily on Customer
Snapshot scores rather than customer surveys to determine customer satisfaction and store
performance. By continuing we’ll assume you’re on board with our. Howard Schultz rejoined
Starbucks as the CEO in 2008 when the company was failing to achieve its targets. As
aforementioned, the first coffee shop was located in Seattle. A mega-brand can deliver customer
intimacy, but only for clients that want it. The company's image and reputation made the corporation
to lead the market. Thinking out of the box to design and restructure the interior of the coffeehouse
has never been easy for Starbucks but making it possible is the specialty of starbucks. It is not that
she doesn’t try to discuss strategy. Also, statistics could be provided historically and organized into
other categories (e. g.: age groups). Otherwise the story the data tells is very limited. By focusing on
the consumer behaviour for Starbucks, it suggests the outlet will be designed to reflect the rich
historical architecture of the city and the interiors of the store which will embrace and celebrate the
local culture with the use of display antiques. An additional opportunity for Starbucks is brand
extension to include additional coffee products and include more food varieties. The emotional
connection is established through a personalized experience of how coffee makers interact with the
customers and how the overall process of order-taking works. Large companies operating in other
industries are also expanding their product offerings relative to the coffee industry. The scope of this
report is limited to the United States business segment of Starbucks which is one of the three
reportable operating segments of the company apart from the International segment and Global
Consumer Products Group segment (Starbucks Corporation, 2012). Moreover, Starbuck prides itself
in selling a wide variety of coffee products, which are of good quality. Although their loyal, long-
term client base (e. g.: affluent, highly educated) was still present, a large amount of customers now
were younger, less educated, from a lower income bracket and visited less frequently. Bargaining
power of buyers—low Individual customers who consist of the majority of the target market usually
do not have bargaining power, compared with a large corporation. Coffee Bean had found a niches
in Starbucks free-markets such as Israel, a place where Starbucks was unable to overtake because its’
drinks are certified as kosher drinks. They were concerned with the convenience of picking up a
good cup of coffee made to their liking as quickly as possible. Josephson, Katz, and Poskanzer
talked with Bustle about how they came up with this incredible idea in the first place, their favorite
contributions to the Tumblr, and where they see Literary Starbucks going in the future. It would be
interesting to see the results of a survey of coffee consumers that weren’t Starbucks customers. In
1985, Schultz decided to leave the company and start his own Italian espresso inspired company
called Il Giornale. To be able to serve individuals from different countries and cultural diversity,
Starbucks has employed personnel from different diversity. This has improved my overall individual
experience at Starbucks. (LEVY). So the management took a decision that the staff members
themselves will clean the store which is completely left in the hand of individual store manager. (See
Diagram-5.2 The motivation framework) But this decision was completely taken independently
without having the staff members’ willingness to do so.
First of all, managers must make sure that “the hygiene factors” are not lacking. Instead of opening
more retails in the city, the company has increased the drive-thru stores in the suburban locations in
the U. A business plan should depict the short term and long-term goals and how they can be
achieved. The company has over 14, 000 outlets across the globe. The Starbucks company uses IBM
4600 series point-of-sale terminals with some wireless networking at these points. Its stocks are
traded on NASDAQ Global Select Market with the ticker symbol “SBUX”. As of October 2, 2011
Starbucks had 6,705 company owned stores and 4,082 licensed stores in US (Starbucks, 2012). c.
Outbound Logistics: Starbucks primarily sells its products through its stores and does not have any
intermediaries. There is an increasing trend of health consciousness amongst the customers as well. c.
Bargaining Power of Suppliers: The growers of coffee beans are the major suppliers in the speciality
coffee industry. Customers can bring along their laptops for internet-surfing, gathering with friends,
and also doing their business while enjoying their favorite Starbucks coffee in a designed air-
conditional and friendly environment. For the fiscal year ended October 2011, the US segment
accounted for around 69% of the total revenues generated by the company (Starbucks Corporation,
2012). Hence customer service forms an integral part of any strategic initiatives taken up by the
company. 2. Secondary Activities: a. Starbucks’ stocks are in long-term risk when a slowdown in
market growth and this will cause a lower valuation. Wall Street analysts began questioning the
wisdom of moving so far afield from the company's core coffee business. This strategy shows that
Starbucks place their attention on the scale and leading position of the company, and underestimate
the importance of branding and differentiation. We use cookies to create the best experience for you.
New ventures that have plan to enter the market and become big corporations or national chains.
They understood that human nature draws people to each other, so the company provided a casual
environment for customers to meet up. Starbucks Coffee Company is a leading coffee retailer that
deals with roasting and retailing of coffee beans, selling brewed coffee, coffee related equipment’s,
Italian-style espresso beverages, other cold beverages and some food items. The company was
opened in 1971 as a small coffee shop at Seattle. But you’d be better off searching for a Starbucks in
Afghanistan than for strategy insights in this book. Their focus was to sell coffee beans and
equipment. They seemed taken aback that their high Customer Snapshot scores were not in line with
the results of the customer survey. Customer intimacy: the company aimed for employees, or
“partners”, to provide a high level of personal service. The document also discusses Starbucks' entry
into India in 2011 through a joint venture with Tata Global Beverages. Works Cited Khattab,
Taghred, Ehab Aziz and Bassem Naguib. Starbuck can also sign licensing agreements with more
companies to enhance its product distribution at a reduced cost. Follow on; the organisation culture is
being changed as well. Unsurprisingly, we can always be found with our noses in books — usually
separate ones. It is rated that Caffe Nero Group Ltd is position three in UK this is after Whitbread
Group's Costa coffee and Starbucks. This has result to the poor management of internal matters. The
aim of this assignment is to analyze the competition within the instant coffee market and select a best
fit strategy to successfully launch and sustain the growth of Starbucks.
He is an inspirational CEO because the overall corporate social responsibility, employee development
as well as contribution of the company toward society are relatively large. Moreover, the consumers
also have the option to buy coffee beans and prepare coffee at their home. The holy nectar that helps
many across the world get through the monday blues. The factors such as weather and economic
conditions may expose the quality standard of coffee and affect Starbucks’ business. Josephson,
Katz, and Poskanzer talked with Bustle about how they came up with this incredible idea in the first
place, their favorite contributions to the Tumblr, and where they see Literary Starbucks going in the
future. It remains committed to its mission of being the premier purveyor of high-quality coffee.
They were concerned with the convenience of picking up a good cup of coffee made to their liking
as quickly as possible. If coffee turns out to be a trend, they must diversify their business where
other competitors have invested in. Customer intimacy: the company aimed for employees, or
“partners”, to provide a high level of personal service. If you feel, respectfully, that you can get a
higher return than the 38 percent you got last year, it's a free country. Right now we’re really focused
on building our blog through a diverse repertoire. It discusses the founding of Starbucks in 1971 in
Seattle by three partners inspired by Alfred Peet. The employees differ in ethnicity, age, as well as
social class. It is mainly achieved through word-of-mouth communications because of its high brand
image the high quality of services and products rendered to its customers. e. Service: One of the
primary objectives of Starbucks is to provide high level of satisfaction to its consumers and it is an
important part of strategic marketing (Proctor, 2000). Starbucks should make an investment in order
to increase client satisfaction, but not by throwing money at the problem. A book about its strategies,
innovations and leaders, about how it is coping with the downturn and planning for the future, is
simply irresistible. External analysis include industry analysis and environmental analysis (social,
legal, political, elements) that affect Starbucks Environmental Analysis Multinational companies
such as Starbucks are greatly affected by environmental factors, which can be categorized into
social, legal, political, and economic elements. She thinks it tastes great, and the other people in the
shop seem to agree, so she never orders another drink again. Also, statistics could be provided
historically and organized into other categories (e. g.: age groups). Otherwise the story the data tells
is very limited. Aside from brewing the best specialty coffee in the world, starbucks has also
diversified in the sales of coffee beans, brewing equipments, and music ( starbucks 2008). In order
to increase the confidence of shareholders, the CEO of Starbucks pronounced that company would
keep forces on create long-term shareholder value. They have also created what they call Starbucks
Shared Planet; which focuses on ethical sourcing, environmental stewardship and community
involvement. In 1971, the original Cataracts opened in Pike Place Market in Seattle, Washington y
three partners named Jerry Baldwin, Cave Siegel, and Gordon Booker. Our objective is to foster a
harmonious connection with our esteemed customers, dedicated employees, and valued
shareholders.Starbucks Coffee Company is the dominant force in the specialty coffee market,
excelling as a retailer, roaster, and brand worldwide. Starbucks’ stocks are in long-term risk when a
slowdown in market growth and this will cause a lower valuation. Consumers go through these steps
while making taking any decision almost nearly every day. Moreover, enhanced management will
ensure that the internal matters affecting the company are addressed. Pandemic influenza is an
epidemic of infectious disease that can spread among human population across the world. Howard
Schultz rejoined Starbucks as the CEO in 2008 when the company was failing to achieve its targets.
Maintaining a clear brand image and position and holding the principles and concepts that have long
been implemented are effective approaches to survive Starbucks within the fierce competition.
They offer particular products and services or serving to the local markets needs. This strategy shows
that Starbucks place their attention on the scale and leading position of the company, and
underestimate the importance of branding and differentiation. The growth rate of Starbucks store
sales decreased 8% in 2008 (Starbucks Corporation, 2008). 60. 00% 50. 00% 40. 00% 30. 00% 20.
00% 10. 00% 0. 00% 2005 2006 2007 2008 ROA ROE The chart above shows the ROA (return on
assets) and ROE (return on equity) ratio of Starbucks has generally gone down between 2005 and
2008. Consumer Reports magazine rated McDonald’s regular coffee as better tasting than Starbucks
as well as other STARBUCKS IN 2009 14 national competitors 6 years later. The document also
discusses Starbucks' entry into India in 2011 through a joint venture with Tata Global Beverages.
Starbucks is one of the fortune 500 companies of the world and has been ranked 229th in the fortune
500 list for the year 2012 (CNN Money, 2012). Starbucks also hold their edge over the new entrants
in terms of supply costs incurred by them. b. Threat of Substitutes: The threat of substitutes in this
industry can be adjudged as high, mainly because of the low switching costs for the buyers who can
easily move to other alternatives of having beverages that have lower price range. It notes that while
coffee consumption is growing in India, tea remains the more established beverage. There are many
reasons for The Success of Starbucks (Baertlein, 2012). Jill and Nora both sing in a co-ed a cappella
group, Intertwining Melodies. Upload Read for free FAQ and support Language (EN) Sign in Skip
carousel Carousel Previous Carousel Next What is Scribd. Under this circumstance, the suppliers are
at a disadvantage in the bargaining. This is 100% legal. You may not submit downloaded papers as
your own, that is cheating. Also you. Like will be demonstrated in this paper, the quality of services
is crucial and affects the sale of products in retail business. Since the quality of its product has
enabled Starbucks, retain its client the company should ensure that future expansions do not lead to
reduced quality. Starbucks competitors include McDonalds and Dunkin Donuts. The personalization
of the training as well as the relative freedom allowed to employees made Starbucks one of the top
places to work locally and globally. Where did the idea for Literary Starbucks come from. Since the
similarity among these groups is relatively low, especially for coffee-lovers, and the distinct flavor
and functions, coffee is a special category. Competition is mainly driven by the ease of opening retail
business, which has led to flocking of retailers into the business. The questionnaire consists of 16
questions, was made on the basis of secondary research, includes demographic and psychographic
questions. No doubt, Cleaning for such chain is really important to earn the trust of the customers
and to provide them better services. To identify the factors that affect the positioning of the brand in
the market. Starbucks primarily gathered customer feedback in two ways. It helps you to identify the
significant changes which are useful for the business in a particular city or country to work
efficiently. This is 100% legal. You may not submit downloaded papers as your own, that is cheating.
Also you. Upload Read for free FAQ and support Language (EN) Sign in Skip carousel Carousel
Previous Carousel Next What is Scribd. This is because Starbucks buys its coffee directly from the
growing country. This way, the company is able to track its clientele's needs and meet them
accordingly. A book about its strategies, innovations and leaders, about how it is coping with the
downturn and planning for the future, is simply irresistible.