Starbucks’ is a premium valued brand; costly to imitate. Its human capital deploys it operations and provide supreme customer support (Geereddy, n.d.), while organizational direction and culture is impacted by leadership (Kokemuller,
Starbucks is an American company that was established in 1971 in Seattle, WA. Starbucks is the leading roaster, maker and retailer of special coffee around world. Starbucks employed more than 182,000 employees across 19,767 branches operated & licensed stores in 62 countries. They do the purchasing and roasting of high-quality coffees that they sell, along with handcrafted coffee, tea and other beverages and a variety of fresh food items, through company-operated stores. The company also sells different types of coffee and tea products and licenses their trademarks through other channels such as licensed stores, grocery and national foodservice accounts.
• In 1987 the original owners of Starbucks sold the company to Howard Schultz who rebranded his own coffee stores to Starbucks and as a result Starbucks began to expand. • In 1987 Starbucks opened stores in Vancouver, British Colombia and Chicago. By 1989 there were 46 outlets and nearly 1 million kilograms of coffee were being brewed per year. • By 1992, they were listed on the stock market and had grown to 140 outlets with an income of $74 million. • Today Starbucks sells Coffee, Smoothies, Tea, Baked goods and Sandwiches.
Starbucks Coffee Company, founded in 1971, has grown to an international brand. As the world’s biggest coffeehouse company, Starbucks continues to lead the industry in sustainable business and innovation. Such success is attributed to the firm’s ability to address the external PESTEL/PESTLE factors. The PESTEL/PESTLE analysis framework indicates the most significant influences on Starbucks based on characteristics of the remote or macro-environment. Despite its current industry leadership, Starbucks must continue monitoring its remote or macro-environment.
Product: Starbucks mainly specialized in coffees and but also sells other beverages such as premium quality teas, ice-blended beverages, pastries and some of their merchandise like for instant tumbler and mugs. They still continued to innovate more of their products to cater to attract more people to buy their product. For example, in 1994, Starbucks starting selling Frappuccino at their store. Price: Starbucks announced in 22nd September 2010 that there will be an increase of prices for their beverages due to the increasing prices of raw materials such as coffee beans. They tried to maintain the prices to make it affordable to everyone.
Unlike before, not all baristas were hand-picked who had mastered ‘both’ the hard-skill and soft-skill required for the job. Moreover, the diversification of customer base and increased product portfolio meant that they had to deliver ‘customer-made’ beverages as quickly as possible and maintain the ‘customer intimacy’ quotient at the same time. The above table clearly states that the most profitable / valuable customer for Starbucks is a ‘Highly Satisfied Customer’ with an average lifetime revenue of
L and Porter’s 5 Forces analyses on Starbucks Background In the year 1971 the now known as Starbucks is opened for the very first time. It is a coffee company that was originally found in the US located in the heart of Seattle. Herman Melville’s Moby dick inspired the name and logo for Starbucks. Starbucks company grows in a very fast paced, the first Starbucks opened in The United Kingdom and then it opened in other countries like America, Asia, Europe, making them have about 24,000 outlets all over the world. Until now it has become the most booming coffee company worldwide because of its signature coffee taste.
The threats in the operating environment can also be overcome by differentiating products offered at Starbucks from those of the competition in terms of better quality, impeccable service delivery, and augmenting customer service and quick response to queries. Developing a huge social media presence and offering product information and pricing through social media is the other strategic recommendation for Starbucks aimed at accessing a large audience and meeting the needs of technology-savvy generation that forms a huge bulk of Starbucks clientele (Hajli, p. 112). This will allow Starbucks to increase its physical and online market reach and expand the information on the company overcoming challenges on physical
1. Introduction Background Starbucks is the largest coffeehouse firm in the world, founded in 1971 as a Seattle coffee bean roaster and retailer. It expanded with more than 21,000 stores in 65 countries and territories between 1987 and 2007, which is equivalent to open an average of two stores per day. It is an American coffee firm and coffeehouse chain, with its first store established in Seattle, Washington. Starbucks offers beverages, whole bean coffee, micro-ground instant coffee, full-leaf teas, pastries and snacks, pre-packaged food like salads, and utensils such as reusable water bottle.
“Starbucks Global Take-Over of China” Starbucks changed the concept of drinking coffee; no longer is coffee just a product it is a lifestyle. Through making coffee drinking an experience Starbucks was able to move a domestic product from a simple coffee shop in Seattle Washington to a renowned product globally. Starbucks has come a long way since its first beginnings in 1971. Today, it’s the world’s largest coffee retailer, with over 19,000 locations in more than 60 countries. What sets Starbucks a part within in the company is that the staff, which are known as partners, are responsible for the sale of over 2 billion cups of coffee every year and create what is known as, “the Starbucks Experience”(Krikorian).