Case: Starbucks
Starbucks was founded on a vision of a coffee community or “third place” where friends could meet to talk, work, or just hang out. The company quickly became a worldwide phenomenon characterized by rapid store expansion, add-on services (drive thru, music, sandwiches, etc.) and the best place to find gourmet coffee. Just as quickly, however, Starbucks’ success began to slip with declining customer visits, a falling stock price, and the actual closing of some locations. This case looks at how non-brand decisions (financials, contracts, locations, add-on services) eroded Starbucks’ brand positioning and brand equity over time. It serves as a reminder that even great brands can sometimes lose their way.
1. How was Starbucks
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Originally, Starbucks was a trendsetter with its unique brand positioning and differential values. It offers not only food and services, but most importantly, experiences. Starbucks can gain high customer motivation to pay with relatively low cost and earn reasonable profits. Its "non-brand" decisions, such as licensing arrangements, store locations and drive-through service, may financially make sense over a short period of time (Ferrell and Hartline, 2014, p. 527- 528). However, such short-term financial growth is in sacrifice of brand positioning and equity in the long term. When confronting the financial crisis and intense competition, Starbucks becomes inevitably vulnerable. As a result, it needs both internal and external brand revitalization to regain its competitive …show more content…
This could be achieved by adopting a balance approach such as ensuring that seeds would not create any health issues and making the consumers and the society aware of the fact. Improved labeling or requirements of labeling food items produced from the crops planted with these seeds would be good initiative as well. The shareholders interest of achieving higher returns can be achieved by not increasing the prices, but by reducing the operating cost. This will satisfy the needs of the farmers of lower price seeds and provide the investors with their
Genetically modified crops also aim to lower the failure of crops, which can maximize the benefits of farmer through the increase of income from selling crops. Nevertheless, this technology created chances for biotech companies to exploit farmers, even causing farmers to commit suicide. Big companies developed the genetically modified seed, and sell it to farmers. But farmers have little bargaining power only, they can only rely on the biotech companies. These companies do not aim to help farmers to increase their income, but aim to maximize their own profit.
In the article entitled Monsanto's Harvest of Fear, Donald L. Barley and James B. Steele demonstrate that Monsanto already dominates the United States food chain with their genetically modified seeds. They are currently targeting milk production which is just as scary as the corporation's legal battles against the small farmers. This situation leads to a history of toxic infections or diseases. There were many disagreements between Gary Rinehart and a stranger about the innovative seeds. They were under surveillance and an investigator came in the picture.
Are genetically modified foods creating or solving problems? “Genetically modified food” is a term rapidly becoming more frequently debated in conversation today. Discussion with regards to its use or even place in our society is on going, with conflicting arguments always prevalent. Many people believe that genetically modified foods are creating problems within society, while others argue the opposite and believe genetically modified foods are in fact solving problems. Both sides offer sound argument, however by analysing research and genetically modified food history, one can ascertain that genetically modified foods are proffering more solutions to issues in our world rather than creating them.
Victoria Secret was profitable enough in their first year, for the company to open four more physical locations, as well as a mail order catalogue. Although Roy Raymond’s policy was initially profitable, but as we will discuss in the later parts of this paper, it also had its downsides that almost led to the bankruptcy of Victoria Secret. Today, Victoria Secret is a multi billion dollar conglomerate with more than a thousand stores in more than 180 countries generating an annual income of over five billion. 2. PESTEL ANALYSIS The external environment of a company can affect everything from company policies, finances, sales, targeted customers and can be a deciding factor in whether the company remains for another season.
The Industry demand has changed due to a shift in consumers’ attitudes towards healthier products. This placed Starbucks’ coffee culture at risk and threatened the company’s future. Starbucks has tailored their menu to include more organic and healthy product mixes, venturing into tea, bread and fresh juice products (Geereddy, n.d). Starbucks’ cornerstone product differentiation strategies and Human Resource Management are the main impacts to strategy formulation.
This firm tries to launch many campaigns based on the three factors of the Triple Bottom Line. As a result, when it comes to Triple Bottom Line framework, Starbucks was given the opportunity to appraise and monitor its operations. Interestingly enough, Starbucks is globally well known by people around the world. In a month, Starbucks’s customers roughly call
Starbucks sells high quality food and brands for affordable prices. Recently, the company launched a wine collection in addition to the coffee. Now, customers can enjoy a coffee in the morning and a wine after work. This strategy will bring more revenue to the company and will put the Starbucks on the map with other great small shops. The brand has also positioned itself best coffee brand in the market by providing attractive store design, unique environment, elegant taste and high quality coffee beans (Kotler & Keller, 2009).
Part A. The primary externals influences to Starbucks PESTEL describes a framework of macro-environmental factors used in the environmental factors component of strategic management. PESTEL analysis includes some several factors: political, economic, social, technological, legal and environmental factors. This report analyzes the factors which have main impact on Starbucks. 1.
As Monsanto is a multinational company whose products are consumed by the food industry, it has to strictly emphasize on its moral obligations concerning the society where their products are being sold. Such moral obligation includes providing best quality of seeds to the consumers and betterment of farmer’s life (Stern, 2011). For this purpose Monsanto ensures high yielding properties of their seeds and it would prevent against insects eating their precious crops. This would ease the farmers in keeping their crops safe and reduce their hassle to sprinkle pesticides for crop safety. On the contrary these genetically modified seeds reported in causing health related issues on consuming the food grown from them.
1.2. Product Differentiation This refers to differentiation that aspires to make a product more attractive by contrasting its unique qualities with other competing products (Investopedia, 2015:1), as in the case of Coca-Cola, other soft drink brands. Successfully adopting this strategy would have a company gaining a competitive advantage, as the customer would then view the product as unique or superior. This is what coca cola has managed to do, and has managed to do it on a scale that is globally unique, and globally recognized.
Kraft Heinz Company the 5th largest food and beverage company with revenues over $26.5 billion and 26 popular brands under its umbrella has recently seen sales disintegrate from competitors that are associated with natural and organic brands (Kraft Heinz Company, 2017). This analysis studies Kraft Heinz Company’s strategy, competitive position in the market, problems being faced, and the company’s financials. KHC, an established company in the packaged-food industry, has dominated the market share with a 3.7% dividend yield, but can soon face destruction to their profitability and impose losses among competitors (KHC: Dividend Date & History for the Kraft Heinz Company, 2018). In order for KHC to remain an industry leader, they must first have a deep understanding of the pertinent factors surrounding the company’s situation (Thompson,
In order to formulate an effective ad, the target audience must always be defined and understood. Starbucks Coffee’s target audience is families with young children. There are several factors involved in determining the target audience, and that is demographic, geographic, psychographic, and consumer insights. Firstly, there are several demographic variables that are taken into account.
Starbucks was founded in 1971. They have 18.850 stores in more than 40 countries which makes them the first coffee specialty retailer in the world. They operate most of their stores having only 50 franchises (as of 2017) as to keep strict control over quality. The success of Starbucks is based on their unique value proposition. They offer customer the finest coffee produced by themselves, with strong commitment on creating a global social impact, served in stores that promote a welcoming and warmth sphere where everyone can feel “like home”.
It is the long-term self-interest of Starbucks. Conclusion In conclusion, Starbucks only concern and goal is to generate profit. Thus, to achieve their goal, Starbucks is selfishly putting the small coffee retailers out of business to gain more profit and disregarding the effect that it could cause to the various stakeholders.
The initial Starbucks established in 1971, it set out to be a different kind of company. One that not only just passionately committed to world-class coffee and the rich tradition, but also the way they engage with customers and communities to do business responsibly. Today, Starbucks has become a great example of an iconic brand and operates worldwide. The brand has strengthened their consumer engagement with the use of digital marketing strategies. In this essay, the author… Technology has developed throughout the last decade at a great rate to make human’s lives more convenient.